Trade Alert: Nibbling some names as we analyze the cycles
To put it bluntly, most analysts and pundits and economists are puppies chasing their own tails. There are three main types of these puppies.
First, there’s the Permabear camp. These are the people who spend all their lives focusing on how inefficient and corrupt our financial as well as our stock markets are in general. How many permabears and economic doomsday analysts have missed the huge upsides in the markets over the last twenty years. Even when the markets crash, they never want to turn bullish.
Next, there are the Permabulls. Some might call these hypesters. These permabulls look like geniuses and make a lot of money when the markets and corporate economy are in an upswing. But they help people lose fortunes by ignoring the fact that most of their followers will lose faith and sell at the bottom.
I’ve long explained to my viewers and readers that permabulls and permabears are idiots who should be ignored. Ignore them. Seriously, just quit reading them and hit mute when they’re on the tube. They are not helpful.
Finally, there are the momentum analysts who try to ride the general rule of “the trend is your friend.” Most of the folks you read in the mainstream media and who you see pontificating on TV fit this category of folks who can explain to you right now all that Bubble-Blowing Bull Market analysis I gave you five years ago. These are the folks who were explaining to you back then how the real estate market bubble popped and took down the stock markets in 2008. Don’t just ignore these guys, but take their talking points as contrarian indicators. When the guys who were bearish at the bottom in 2009 have all gone bullish, you’ll know this ongoing bubble-blowing bull market stock market is finally about to top.
To maximize your gains, you’ve got to be flexible with your money, but that doesn’t mean panicking yourself out of the stock market when you’ve lost a lot of money and it certainly doesn’t mean you should just go plow your savings into the markets the next time they hit all-time highs and the momentum analysts are back on TV explaining why they’re markets are back at all-time highs.
Since late 2009, I’ve been adamant in my predictions that we are headed into The Largest Stock Market Bubble of All-Time. I’ve highlighted how the Fed’s 0% interest rates, QE, would enable corporations to borrow trillions of dollars on the cheap while forcing savers into ever-riskier assets. That straightforward analysis that I was explaining to you and Ron Paul and Peter Schiff and everybody else who would listen to me over the last five years along with how the government at every level is focused on maximizing corporate profits has likewise kept me buying every time the market has dipped during that time frame.
Going back even further, I launched a tech hedge fund back in October 2002, hoping to catch a bottom in the tech crash that took place from 2000-2002. And I closed that hedge fund, explaining that I thought a giant real estate bubble was about to crash that would take down the entire stock market with it, to become a TV anchor.
So where are we right now in the cycle? I still expect we’ve got more bubble-blowing bull market dynamics ahead of us, taking the Nasdaq on up above its year 2000 highs of 5048. At that point, I’d expect that last “This stock market is a bubble already” momentum analyst and even a bunch of the highest profile permabears to finally “embrace” this bull run. And I’d expect we’ll probably see some cracks in the broader economic cycle that will start to reveal who’s swimming naked in the market waters and that we’ll probably want to have stepped up trimming our longs and buying some puts at that point.
Is it time to for this current market pullback to end? Is it time to load up on stocks again for the next swing higher? Let me answer those questions this way – if you’ve been following our playbook, trimming at highs, managing your overall net long vs net short exposure, and handling your business properly, then you know that it’s time to scale into some of our favorite long-term Revolution Investments while leaving yourself plenty of money and time to scale into more over time. I’m doing exactly that today with scaling into some $FB, $SNDK, $GOOG and $AMBA. I am nibbling on a tranche of common stock in each that is about a 1/10th of a full position. Just scaling in following our playbook, see?
We might get a chance to do some more aggressive trading in coming days, but I’m just starting with this for now. Discipline.