I wanted to follow up a little more on my
handle on BLM after our interaction yesterday and why I take issue with BLM and
communicating at the same time I support racial equality but not by bully means
of BLM.
With
regard to Black Lives Matter, one thing that I will say for them is that they
were brilliant in naming their group, because this means that, if you disagree
with them, they can say that you do not believe that black lives matter, simply
because that is the name of their group. It would be like if I created a group
and called it “The Sky Is Blue.” It could stand for all sorts of
nonsense, but, simply because of its name, if you disagree with it, I could
then say that you do not believe that the sky is blue. While this sounds crazy,
I have seen it over and over again; whenever people denounce the Black Lives
Matter group, those people are then condemned as racist for supposedly
believing that black lives do not, in fact, matter (again, just because that
happens to be the name of the group).
Furthermore,
the Black Lives Matter group has little to do with the protection of black
lives (even putting aside all other lives, which deserve just as much
protection, one would think). The Black Lives Matter group certainly has
not been protecting black business owners from violent rioters. They do not
seem to care about black victims of gangs and violent crime, since defunding
the police will mean more such victims. (Maybe they would be more honest if
they called themselves CERTAIN Black Lives Matter, but I suppose that it does
not have the same ring to it.)
Instead,
the Black Lives Matter group seems to stand for anarchy, violence, and the
total destruction of the freest society in history. In addition, they have even
taken several stances against Israel, the only free country in the Middle East,
one where minority rights are enshrined in the law and protected by the police
— in fact, the Israel Police just swore in its newest cops, which included both
an Orthodox Jewish man and a religiously observant Muslim woman; there is no
other country in the Middle East where that has happened. I suppose that this
is consistent with the Black Lives Matter group’s goal of destroying free
societies.
In the video below (beginning at 31 minutes) Mike address
‘head on’ his concerns with the
Black Lives Matter
Movement.
He does not hold back
with his support of
“All Lives Matter”
and articulates the
short comings of the BLM movement – with no clear message or
leadership
When Mike said to
people prior to the meeting that one of his topics would be “All Lives
Matter” people said
“are you crazy
Mike?”.
Mike has stated – he
will not be bullied by the BML movement and goes on to convey his position
that so many politicians, business leaders and celebrities are cowards –
unwilling or unable to stand up and be counted. It is sickening that people can be called racists for saying
“All Lives
Matter”.
Mike goes on to state
that he believes we are being bullied by the BLM Moment and when he asked
if the BLM movement uses bully tactics and if people were concerned with
this approach every hand in the room was raised..
It is the silent
majority that is afraid to speak up – but Mike did not hold back.
In addition, Mike gives guidance on how to best “play” the
current investing environment.
In
approximately a dozen articles (that I have written since January) I have
guided members to increase their position in gold and silver to at least 10% of
your net worth. For those who listened
gold hit a 9 year high last week and silver is showing strength and is in a
break out pattern to go higher.
I want to
remind members that during the January club meeting ‘Economic Outlook for 2020’
I discussed (for 90 minutes – which is on video) that, although not likely, a
Recession was possible and one of the 3 major reasons I discussed was a
possible pandemic – long before it was being reported in the news.
In addition,
in April I told members when the oil futures market went ‘negative’ to load up
on oil ETFs and then sell when it hit $40 a barrel.
For those who listened and followed (and some of you did it) – is very likely you saw a doubling in value of your investments.
For
more than a decade it has been falsely reported in the media that — in a
ruling by the British Columbia Securities Commission (BCSC) against
Mike Lathigee — he had amassed personal gains as a result of the
collapse of his company.
‘That
is not the case, I owned more shares and options than any other
investor and when my company collapsed, I lost more than anyone else, I
was quite simply — wiped out’, said Lathigee.
It’s
been a long time since I’ve seen you. I hope this note finds you
well. I have not been able to attend your meetings of late.
However, I have enjoyed them in the past and always learned something very
cool!
I
received your email this past Wednesday & I viewed your video from sometime
in the fall. I cannot even begin to tell you how heart-wrenching it was
for me to hear you explain what has happened throughout your ordeal with the
BCSC. It is so sad for me to hear and when you spoke of your son and your
mom I just lost it. My heart just went out to you. I really am so
proud of you in standing up and being so willing to give full disclosure about
it all – including the personal things. I know the members who have stuck
by you all this time really must have appreciated and further admired you for
it. I was there with you in spirit, as I had seen or heard things along
the way, but knew from my past interaction with you that there was more to the
story than we knew
I
know how hard you have strived to make this club the greatest thing ever and
I’m honoured to know you even within the context of such a miserable
situation. I DO know that you are tough and I do agree with your belief
in NEVER NEVER NEVER Give Up so I know that one day you will recover in all
ways. No matter what the judge says, regarding these financial ‘affairs’,
you have many friends and family who will always stand by you and in the end –
that is what is most important.
God
will bring you through this and the members will hold your post for you while
you have to take a step back. I’m sure Steve Hawks will help you in all
ways, as well. Just take deep breaths and know – this is all for some
purpose. You show people what honour and integrity look like – no matter
what.
I
do hope I will see you again one day and that I will have the ability to
participate in one of your great investments. I’ve always been a good
judge of character and I absolutely would trust you with my money. Now I
just need enough to let you try! I’m actually getting pretty
close. Things are definitely improving.
Until
then my thoughts are with you, Celeste and the family.
Members,
Over the last several weeks we have seen a total disconnect between
“Main Street” and “Wall Street”. With the huge surge of bankruptcies,
we will see in the coming months a massive GDP nosedive and it made no
sense why stocks continued to move up with some “bonehead” analysts even
calling for the stock market to hit new highs.
The last few days we are starting to see a sell off and other than
specific stocks that would prosper during the covid crisis it remains
most prudent to retain a huge position in cash and 5% to 10% of your
portfolio in gold.
As members are very aware, I have advocated increasing your position in
gold especially since this crisis has begun. In fact, gold has been
the best performing asset class and even on a day like today where the
Dow is down over 500 points, gold is up. In fact, all sectors are down
and the only “green” on the screen is gold and some gold stocks. For
those of you who increased your position in gold, congratulations – you
have done well and for those members who have not, it is still a prudent
investment as a hedge to protect your portfolio.
I remain more convinced than ever in gold as an investment due to the
fact the government and Fed will provide more stimulus to support an
economy battered by the virus. The Fed, in fact, announced it is
buying bond exchange traded funds for the first time ever and so – with
more stimulus members should own more gold. Today the US central bank
started purchasing shares of ETFs that invest in bonds. The Fed is doing
this to improve market functioning due to the pandemic.
Again, as a reminder – gold benefits from all these stimuli because it
is considered a hedge against inflation and currency debasement. As we
talk more about a 2ndwave of global infections this will show
strong support for gold. Gold is up from approx. $1500 an ounce to
over $1700 an ounce since the beginning of the year. If we see a
market catastrophe, I see the price moving much higher which is exactly
why all members must own it.
There is a large selection of ETFs with a focus on gold and large gold
companies to select from. Stay away from exploration companies as there
are many gold producing companies that, in my opinion, are undervalued
and exploration companies are not a risk you have to take.
Here are the key indicators that I am watching closely to see what happens in the coming months:
A vaccine for Covid 19: Lots of players
are spending billions chasing the cure. Likely not to see success
until late 2021. Even when a vaccine is found it will take a few years
to vaccinate a global community.
Fed stimulus: This is always the most
difficult market condition as it is artificially created and prevents me
from knowing what will happen. If the Fed throws unlimited stimulus at
the stock market and the economy then “yes’ we will likely see stocks
continue to sustain value but please realize this is artificial demand
and why, again, I believe gold is the safe haven. However, when stocks
move up investors tend to show less interest in gold, and this is always
a major problem that gold has – with skyrocketing upwards. I believe
the Central Bankers hate to see gold prices rise quickly as it means
less confidence in the overall economy.
Oil Prices: I believe oil remains a good
bet because the major companies cannot make money at these prices – even
after the large percentage move up in oil prices over the last few
weeks. If we see success in reopening the economy then oil prices will
move much higher; however, you know my new favorite word is “boneheads”
and I hear these idiots saying, with confidence, that in the next year
oil to be back above $100 a barrel. The odds of this happening are
remote, and the possibility of a 2ndresurgence of the virus
will continue to keep downward pressure on oil. (Billionaire Naguib
Sawiris from Egypt, is calling for oil to hit $100 in 18 months or less)
US China Tensions: Phase 1 trade
negotiations between China and America have had to adjust due to the
virus. This has caused concern that US-China bilateral relations would
deteriorate. Another trade war will see huge downward pressure on stock
prices. Trump in his typically unpredictable manner (and possibly
after a bad night of sleep) could decide to wage trade war with more
tariffs on China – which would see stock markets fall quickly.
Many retailers will go bankrupt. A
further wave of bankruptcies in airlines, oil, hotels, travel and
tourism will result in significant job losses and debt defaults. This
will impact consumer spending – which is the largest part of the US
economy.
A (likely) 2ndWave of Covid: As we listen to Covid experts every day almost all are saying there is a (almost) certainty – of a 2ndwave
in the Fall after the hot summer months. I believe if this occurs
that, this time, we will have to keep the economy open – but people will
continue to change their personal behavior and buying habits which will
gravely impact the economy with the major impact being on lower income
people in retail, hospitality etc.
Given all these “headwind” forces at play, I stick by my guidance over the last few months:
Own Gold. Up to 10% of your total portfolio.
Maintain a very large position in cash. Over 50% of your portfolio and consider higher.
A small position in oil that will likely
continue to rise to higher levels. This is a trading position in which
to take profits on gains.
At the club we will be looking at Real
Estate opportunities in the coming months; however, the big caveat will
be – if the Fed stimulus is able to prevent deflation and an asset blow
up. If so then the Real Estate opportunity may not be what we hope for –
but current owners of properties will be happy. I see commercial
real estate property values collapsing and this might be an area we look
at.
Finally, I just don’t understand where
some so-called experts get their information from. I have never been a
fan of Goldman Sachs for many reasons, but they are expecting US gross
domestic product growth of 4% in 2021 – and are very bullish on a market
recovery. Whenever, Goldman says this to the masses I am suspect
behind the scenes they doing the opposite. Remember – they were telling
people, in the last financial crisis, to buy subprime debt while they
were selling it out the back door. Goldman Sachs is probably the best
politically connected company in the United States with countless
Washington insiders. I would love to be a fly on the wall during some
of their high level executive meetings.
P.S. There is one good thing about COVID-19 and that is the fact that
“ambulance chasers’ (personal injury lawyers) have cut down on their
advertising due to the fact the majority of Americans are driving much
less. However, I don’t see Ed Burnstein, Adam Kutner or Glenn Lerner
in a food bank lineup…….yet.
Please forward this message on through your social media channels.
From the desk of Mike Lathigee
Sunday, April 19, 2020
Members,
We are seeing economic devastation not witnessed, to this degree, in our
lifetime. GDP has fallen off the cliff. Although the Fed has flooded
the market with liquidity to avoid deflation, I am very concerned that
we will not see a vaccine any time soon. The American stock market
keeps moving up and is behaving like it is in a bubble separated from
reality and not part of a global economic system (of economic
pain). Idiots on CNBC continue to say, “buy on dips” and “great buying
opportunities”. How can these money managers make so much money and
be so completely clueless?
It is insane that the S&P 500 is now
trading at 18.5x next year’s earnings. That’s right – the market is not
even considering 2020 earnings but trading on expectations of
2021. SORRY I HAVE TO WRITE THESE WORDS, “I CANNOT BELIEVE THIS IS
HAPPENING”. Even if we were to recover, and that is a big “if”, there
will still be massive bankruptcies and unemployment will not likely
return to low levels for at least a few years. The stock market is
fully priced in a ‘recovery’ and there is no upside at all to invest at
these levels unless you are a great stock picker – which few are (most
investors cannot even read the complicated financial statements). RUN
FOR THE HILLS AND TAKE ALL YOUR MONEY OUT OF THE STOCK MARKET!!! THE
RISK/REWARD IS TOO HEAVY ON THE SIDE OF RISK!!!
The only consideration for staying in the
stock market is that the Fed keeps printing money and they may soon
start to buy stock. If this is the case then we could see higher stock
prices but I would not want to take that gamble and I think Small
Business America stimulus should take priority over the “Wall Street
Crowd”.
The Fed might be successful due to the
fact it has an unlimited budget to print money. Last week it was buying
ETF’S with exposure to the Junk Bond Market. That is right, the Fed was
buying JUNK BONDS and once again bailing out the superrich while Small
Business America (SBA) loans run out of money with only a fraction of
the businesses getting funding.
Remember members I have been SCREAMING
FOR 5 YEARS ABOUT THE SHARE BUY BACK SCAM! I now only hear commentary,
on a regular basis, about this self-dealing form of
racketeering. Very few people were talking about this situation for
the last several years – but this was a common theme of the Investment
Club of America.
Then in January I did the Annual Outlook
Presentation at our monthly club meeting and I said GET OUT OF THE STOCK
MARKET COMPLETELY. It was a 90-minute presentation and I talked about 3
reasons why we could see a Recession. I said a Recession was unlikely –
but more likely than anyone else around the world is talking
about. Further, I have been also SHOUTING BUY GOLD, BUY GOLD, BUY GOLD,
and that has been the number one performing asset class over the same
time frame since the club meeting in January.
Money managers are still making tens of
millions, or more, even with poor results! Bloody ridiculous
system! At the same time these bastards enriched themselves with share
buybacks and used all the free cashflow of the companies they were
running. Now they have their hands out for government bailouts. Just
look at the top 6 airlines using more than 98% of their free cash flow
on share buybacks and then, when the pandemic hit, they have no money in
their coffers and ask the American Tax Payer for $60 billion (to start
and more later). I say “let them fail” and the American Tax Payer
should receive equity at today’s valuation for any money given to these
companies. You will be sickened if you look at the massive bonuses (in
the hundreds of millions) these executives, at the major airlines, took
over the last 10 years and of course none of that will be liquidated
for their irresponsible management decisions.
The probability of a stock market
collapse is higher than it has ever been. As I said in a blog sent
last week – you can “trade” this market but being “long” you will have a
high probability of being wiped out – with the exception of gold.
If the virus is not contained and the
economy is reopened – only to be shut down again – the Fed will have no
tools left in its arsenal AND WE WILL SEE A DEPRESSION that will be the
GREATEST DEPRESSION EVER! Again, own 10% precious metals in your
portfolio and hope that it does not move up too quickly as that will
likely mean a collapse of almost every other asset class.
Yes, let me write it again, I am saying –
buy gold – but hope it does not go up too quickly as that means all
other assets have collapsed. Remember it is an insurance hedge for your
portfolio and now you need that more than ever!!
A few weeks ago, I suggested an oil trade
that did very well and then in a subsequent blog I guided members to
take profits and move on. I am watching oil closely as no energy
companies can exist with oil prices this low. There will be many
bankruptcies and in 2 or 3 years I believe those who invested in the
best oil stocks will see triple digit gains.
Investments in oil at these prices are
attractive – but individual stocks are still too risky. Eventually oil
prices will rise, and the best capitalized, best run companies will
reward investors.
My most important guidance however,
besides OWNING GOLD is to “hoard cash”. There is going to be
tremendous opportunities in many asset classes especially Real Estate as
the Asset Bubble has blown up. So, Hoard Cash!!!
I am also closely watching Insider Buying
and Insider Selling Reports. This is not the only tool that should be
used when trading, but it is very important. When I see a CEO “buy” or
“sell” a massive stock position it gets my attention to do some
research.
I am writing more than ever in the history of the club because we cannot
have club meetings. This is the way I am staying connected to “MY
TRIBE”. I care about the membership and know I am doing all I can with
all we are involved in to ensure we get through this. I believe we are
much better positioned than the vast majority of small businesses.
P.S. Members if you find this info useful
please post it to all your social media platforms. We think our
message is important and the proper guidance that investors need.
Finally, I just do not see how we are
able to completely get out of this catastrophic situation – with so many
other countries around the world unable to control the virus. Brazil,
Indonesia, Thailand, Nicaragua, and many countries in Africa to name
just a few. Will the United States have to close its borders until
there is a vaccine because visitors from these countries will not have
proper safeguards in place? We shall see – but in our hometown of Vegas
we are unlikely to see many international visitors for at least a year
and I believe Nevada may see a set back that hits us harder than the
‘Great Recession’ of 10 years ago.
Members I start this update with sad news. Freedom fighter, Marcus Mumford, who spoke at a club meeting, a little more than a year ago, has died suddenly (yesterday) at the age of 48. Marcus fought successfully against the unlimited resources of the Federal Government. He defended clients in three cases in a row against the Federal Government – and won. The Federal Government wins 98.6% of all its cases and it was statistically less than 1 in one million that Marcus could accomplish such a feat. Marcus had an uncontrollable stutter which made such an accomplishment even more impressive. After Marcus’s success, the Federal Government worked hard to have Marcus disbarred from practicing law, on unfounded accusations, and were successful against him in a few States. He died an American hero standing up to the tyranny of the injustice that exists in our judicial system. REST IN PEACE MY FRIEND – YOU WERE A GREAT AMERICAN!!!
Today,
I spoke to a club member who, like many of you, is also a friend. He
said, “During this pandemic, in the real world – people are dying, in
the real world – there are unprecedented bankruptcies. It makes no sense
that the stock market continues to move up – disconnected from reality”
He is right! The stock market continues
its almost daily rally as if the coronavirus will quickly pass and the
economy will recover in short order.
There are too many unknowns that
investors are not factoring into stock investing at this time. The
market has retraced approximately 50% from its lows. Earnings season
is fast approaching and the results will be catastrophic. Today Apple
led the stock rally – yet there seems to be no consideration for a
consumer that has been gravely hurt or is unlikely to pull out his
wallet to buy the latest version iphone. Do you think Apple will sell
many iphones to India – which has been completely on lockdown for a few
weeks? Yet I hear “money managers” say that now is a good time to buy
Apple. Complete Idiots!!
Day trading and swing trading make sense to me and I believe there is a lot of money to be made. Most people are not trained in these skill sets so this is not a strategy I recommend to members unless you have experience. Investing for the long term at this point could work but only because the Fed has moved its 2009 philosophy from “Too Big to Fail” to its 2020 philosophy of “Nothing will Fail”. In other words, the Fed has decided to flood the economy and force feed as many dollars into the market as is necessary.
Today I watched on CNBC (sorry to admit that sometimes I watch this station …. long explanation and members have often heard me voice concerns). The CEO of Cheesecake Junior Restaurant in NYC received $5.5m in PPP Government Loans. The CEO was asked if he was going to pay his staff as per guidelines of the loan and he said “no”. He said he would use the money for necessary steps to reopen the restaurants and would only start using it for payroll purposes once the restaurant was not only opened, but guests were returning at previous levels. In other words, “ I will do what I want with the money and not what the government tells me to do” This was a tell tale sign that the government is handing out money with guidelines that a large number of businesses will ignore and I am sure the comments of this CEO unintentionally convened fraud.
At
this time anyone buying a “long position” in the stock market is
gambling. There is a good chance, due to the Feds nonstop running of
the printing press, that it will “fool” investors into thinking that we
are returning to the glory days of another secular bull market with low
interest rates and companies using most of their free cash flow for
share buybacks – but there is one consideration every investor must heed
and that is – if we “reopen the economy” and the pandemic reoccurs with
another shut down – the Fed will no longer have any tools left and all
asset classes except gold will collapse.
For the last few years, I have been urging members to hold a position in gold. The last few weeks I have been “pleading” with members to take a position in gold. Those who listened have now invested in the top performing asset class during this same time period. I recommended members buy physical gold and silver in the past – unfortunately that is no longer possible as any dealer I have contacted is “sold out”. So that means the best way to own gold now is through an ETF – as most investors are not equipped with the skill sets to analyze individual companies. GDX and GLD are two options for ETFs. For Canadian members the best option is CEF where you can actually take your position in physical gold and Sprott Assets Management is a company I respect in this industry. I know I just said for members not to buy individual companies but Barrick (symbol GOLD) is the world’s largest gold producer and PanAmerican Silver (symbol PAAS) is one of the largest silver companies and I have confidence in both these companies. I mentioned these companies only because I know members will ask me. So members the guidance I have given to guide you through the last several weeks has been accurate. I know that all that matters is results and my guidance has shown to provide the best results. At the January meeting when no economist, financial analyst, media etc was discussing a possible Recession, I discussed for 90 minutes on stage at that meeting three ways a Recession could happen in 2020. I told members to take gains and lessen stock market positions to a small position or completely liquidate. Those who followed reached out and have said “thank you”. Some did not and all I can do is deliver the message. AGAIN, THERE WAS NOT A SINGLE ECONOMIST TALKING ABOUT THE PROBABILTY OF A RECESSION IN 2020 BUT AT THE INVESTMENT CLUB WE DISCUSSED THIS IN DETAIL AND TOLD MEMBERS TO PREPARE. A few weeks ago I wrote in several articles to OWN GOLD, OWN GOLD, OWN GOLD. Some listened and some did not. Gold has been the top performing asset class and again I am saying OWN GOLD as insurance for your portfolio and bring the position to 10% of your net worth – up from my previous guidance of 5%.
Here is the outcome I see in the economy:
The Fed will take all steps to ensure we
don’t see deflation. The Fed has bought tens of billions in Municipal
Bonds, Assets Backed Securities Etc. If the Fed is successful, which
has a high probability, then we will see a recovery in the stock and
bond market but not based on true fundaments but rather massive
liquidity injection. God help every owner of assets if the economy
reopens and then the coronavirus reoccurs without proper testing in
place. We will see a DEPRESSION and the Fed will have no tools left.
So it is likely the Fed will be successful and all assets classes will
rise but if the Fed is not successful then all asset classes will fall
and the lone survivors will be those who held gold. As I have told
members many times – if gold were to increase to $5000 plus per ounce
that only means all your other assets have collapsed. Real Estate,
stocks, bonds etc. Do you now understand why you must own Gold and to a
lesser degree silver?
Members – What strategy am I am looking at for the club members to
prosper in this environment? For those who recall 3 years ago I
debated with the CEO of Boyd Gaming, Keith Smith (who spoke at our club
meeting) – stating that the economy in Las Vegas was not diversified
enough and would again lead the collapse of all States as the economy in
Nevada is based on consumer discretionary spending. He went on and on
about how the economy was diversified and Nevada was now in a strong
position and I held steady and respectfully said he was wrong. Now
all reports coming out are saying Las Vegas will be the hardest hit city
in America with the highest percentage of unemployment claims etc.
So here is the opportunity as long as the
economy does not shut down again. EVERYONE HOARD YOUR CASH! CASH IS
KING! Unless commercial and residential landlords are bailed out – by
the Federal Government we are going to see very attractive cap rates
again – similar to 2010. There will be a glut of properties hitting
the market. We will consider a Real Estate Fund when the timing makes
sense and see how things unfold but for right now HOARD CASH, HOARD
CASH, HOARD CASH and get ready to mobilize funds for the coming
opportunity.
Yes you can “trade” in the stock market but don’t take any “long
positions” Don’t listen to money managers as they are always motivated
by “money under management” and 99% of them have caused you massive
damage by their “buy and hold strategy” in the last several weeks. I
have said too many times, “these people are the most overpaid,
undertalented so called professionals in the World.” I don’t know who
I despise more – money managers who can make tens of millions while you
lose money or lobbyists on Capitol Hill who act like sociopaths – with
no consideration for the American people!
Members – there is no “sugar coating” I call it the way I see it!!
Caveat: Members, The current economic
retraction will be the worst since the 1930s but the Fed is fighting
hard. Even with the force feeding of money by the Fed it is likely
inflation will remain close to zero. This is a fact that works against
gold, but I remain bullish. The main catalyst that will propel gold to
much higher levels will be a much lower US dollar and again, because
the majority of members hold all their assets in US dollars, gold has to
be used as an insurance hedge for your portfolio.
Conclusion: Members, if you
buy gold and it declines that is fine because it likely means the rest
of your assets have maintained their value. However, if gold increases
by several hundred percentage points then it is likely all your assets
have collapsed in value and this is exactly why you need to own it as
insurance for your portfolio.
I have come back from a long day of
meetings having been updated on what is happening in the economy. I want
to encourage members to increase their position in gold and silver to
10% from my previous guidance of 5%.
For those who followed this guidance – gold futures are at a multiyear
high today and I am glad you followed this guidance. For those who
followed my guidance (from my writing of 2 weeks ago) by buying an oil
ETF – you have outperformed the markets by a wide margin. At this stage
it would be good to take the profits on this trade, which are
significant, and move on – as the risk/reward is no longer worth holding
the position.
Given the fact that it is hard to purchase physical gold and silver at
this time, as all the mints are closed around the world and dealers have
little physical coinage on hand, investors are left to buy “paper” in
the markets.
As members are aware, I have always advocated possession of physical
gold and silver but that is not possible at this time. Physical gold and
silver are now trading at a large premium to the actual spot price –
which is very bullish for gold and silver. For example, an American 50
cent piece spot price is approximately $5.5; however, right now –
dealers are selling it for $7 plus.
I believe the Fed, with its mammoth stimulus package, will “print all the dollars necessary” to save the stock market.
(I am sure Trump and Powell are best buddies now!)
The Fed Head, Powell, actually said in an interview today that
“inflation is not a concern” and the Fed will buy all assets backed
securities that require support. As a result, the Fed has indirectly
opened the flood gates to much higher gold and silver prices.
I believe with the unlimited printing of
paper money that the stock market will now be “saved” but it will come
at a price of less confidence in “fiat” currencies.
Every Federal Reserve Bank is following a similar path and it is
inevitable that gold and silver move up. Those who were buying prior
to the Fed Head interview today and ‘gambling’ – frankly you gambled
right – but you were speculating and it was not based on any economic
data and it was at best a 50/50 crap shoot.
All I can say is if you were buying (the last 3 days) you were lucky
that Fed Head “saved your ass” because there was no economic data to
support going into the market, and taking a ‘long’ position, until FED
HEAD, Powell’s update.
Today the Fed announced another 2.3
trillion dollars stimulus/lending program to support US states and
cities ravaged by the coronavirus. I just cannot see how this
gargantuan force feeding of money into the market cannot cause inflation
and in turn – higher precious metal prices.
Disclosure: I have no personal benefit by
giving guidance to members. I could be wrong! I am writing this
because I know to date a minority of members do not even have any
position in gold and silver and I am following up to encourage members
to use the catalyst of today’s FED announcement to take at least a
position in gold and silver. Talk to your financial advisor or you can
buy an Exchange Traded Fund like SLV or GDX. Individual stocks have
more inherit risk but Barrick is the worlds largest gold producer and
trades at only 8x earnings. For silver stocks, Pan American Silver,
is one of the largest silver producers in the world and has lots of cash
in the bank, proven reserves and a world class management team.
Again, I have no personal benefit for any guidance given other than – this is the way I see it ….
In the past I have always told members
that precious metals are simply a hedge in your portfolio in the event
every other class falls due to a catastrophe – such as a collapse in the
derivatives market.
However, it is very possible, with the
Fed prepared to buy almost every type of security, and there is even
talk of the Fed buying stocks, we could be in a very rare situation that
all assets classes move up. But gold and silver will out perform
because gold and silver are priced in US dollars.
Don’t overdo it with silver and gold and
again 10% is certainly overweighting which makes sense, at this time for
your portfolio. I know the vast majority of members, over the last 2
years, have bought gold and silver (through the many interactions I have
had with them) but if you don’t have any gold and silver – this is
definitely time to take a position to protect your portfolio.
Finally, members, the information I am sharing – is about trying to help “my tribe”. I ask that you share this narrative on your social media in hopes of helping others. Below is the link.
Members, The club guidance has proven to be accurate.
For example, the oil guidance has already proven to be a strong “win” for those who executed the trade. But remember – this is a trading market and taking quick profits and getting back into cash is a prudent strategy.
For the most part it does not yet make sense to sit “long term” in any position until we have more economic indicators. Beyond comprehension is listening to money managers (the last few weeks) as they discuss buying stock positions on dips like Apple – when a huge part of the world economy is shut down!
As I have said many times before “Money Managers are the most overpaid, undertalented, “professionals” in the workforce and the vast majority of their guidance over the last several months would have left you reeling with heavy losses.
Remember at the club meeting in January the discussion was: The market is overvalued. No one was talking about a Recession then – but we discussed 3 ways a Recession could occur and the guidance that night (and the last 18 months) has been to have little (to no) exposure in the stock market. We are not trying to “toot” our own horn but we are saying that the club presents guidance that, more often than not, is not available in the popular media .
One of our objectives is to grow the club and we ask that members consider forwarding a few posts (below) – on social media & help the club get more exposure.
