Sunday, June 25, 2017

We could print enough money that the Dow goes to 100,000

Either people with money will be taxed heavily or we'll have a massive deflation in asset prices — I repeat: massive. Eventually the system will break.

[Watch the full interview above]

Monday, June 12, 2017

Faber's Market Predictions You Wont Hear This From The Mainstream Economists

Click here it the above video does not play

Excerpts from the interview
-We are dealing with manipulated markets by Central Banks so it is very hard to predict.
-Markets can go much much higher before it all blows up

-Diversifying assets - own some Equities, Real Estate, Cash & Bonds, Precious Metals, 

-European markets will outperform US this year and their valuations are much lower than US.

-Prices of Real Estate in good areas of Toronto are very high but two hours out are not very high.

-Real Estate in the country side are more attractive and does not have the downside risks of where the speculation is occurring such as the Condo flippers. 
-Real Estate safer to invest than Financial Assets. Real Estate will Not go to Zero where as financial assets could go to Zero.

-Consumers in USA and Canada are tapped out - too much debt.

Monday, June 5, 2017

Marc Faber recommends US Treasury bonds, European corporate bonds and Emerging markets

Marc Faber speaks to CNBC 
- Bubble in popular stocks and they are highly priced.
- Liquidity bubble
- I would invest Europe or Asia rather than US
- Car Sales and retail sales weakening show US economy is weaker than thought
- Millenials are earning less than their parents, and paying 50% of their income for rents in places like New York and San Francisco.
- The Fed has been successful in boosting asset prices but wages has not kept up.

Thursday, June 1, 2017

This bull market depends on FAANG stocks

I recently attended the annual Mauldin conference. What surprised me most is how bearish the attendees were. I can only explain this bearishness after an 8-year bull market as a result of most individual investors having lost so much money in the 2000 to 2003 and 2007 to 2009 bear markets. Consequently, they failed to capitalize on the subsequent huge bull market, which followed the March 2009 low.

Apple is one of the biggest companies in the world

In early May, Wolf Richter commented that, “Over the past 10 weeks – so since March 1, 2017 – five stocks in the S&P 500 index have gained a total of $260 billion in market value, the infamous FAANG stocks: Facebook, Apple, Amazon, Netflix, and Google (now Alphabet). 

By any measure, $260 billion is a massive surge in valuation for just five stocks, or 1% of the S&P 500, in just 10 weeks. And the rest of the S&P 500? On March 1, the index closed at 2,394. Today it closed at 2,397. In those 10 weeks, it went absolutely nowhere. Which means this: the remaining 495 stocks in the index lost as much in total market capitalization as the FAANG stocks gained.” 
I should add that this dichotomy has continued to this very day with the FAANG stocks having been joined by stocks such as Tesla and NVIDIA.

I need to emphasize that this kind of narrow leadership is symptomatic of an extremely mature bull market (after all the bull market is more than 8 years’ old by now), but as was the case of the NASDAQ bubble in 1999/2000, the investment mania in FAANG type of stocks (and Bitcoins) could last somewhat longer. We should not forget that between October 1999 and March 30, 2000, the NASDAQ 100 rose by more than 120%!

There is one issue investors should carefully consider. After the NASDAQ began to collapse post March 2000 a major shift in the stock market’s leadership occurred. NASDAQ stocks which had been the leaders during the bubble did not make new highs for years (most of them never) and it took the NASDAQ 100 until the end of 2016 to exceed the 2000 peak. However, the transition from the old leadership to the new leadership was not smooth and painless. Take as an example Newmont Mining (NEM). Along with the stock market, Newmont Mining rose until early 2000. Then, along with the NASDAQ slump the stock was also dragged down into October 2000 when it had declined from peak to through by 53%.

What I want to say is that once the FAANG stocks and their peers will break down it is likely that they will – at least initially - drag down the entire market and also the emerging new leadership.

Stress is caused by adversity and extreme stress by extreme adversity. Extreme adversity can be caused by a total loss of money (including divorce), the loss of a beloved one, the loss of one’s job, and a severe illness or accident. The extreme stress arising from loss of money can usually be avoided by disciplined diversification of one’s assets (stocks, bonds/cash, real estate, and precious metals). A geographical diversification is equally important.

via gloomboomdoom