The world has almost always been pretty crazy. I think there is a bias, which isn’t necessarily a bad thing, to believe that now is a special time, it’s different. Now is “the best of times” or “the worst of times.” In a very real sense the current time IS the most important because the present is the only time we can directly impact. Also as humans we seem to enjoy superlatives. But it’s important to realize that things have almost always been fairly crazy. The world has almost always been mad.
Supply Chain Breakdown
So what is the crazy du jure? Well, the US and probably other countries are realizing what was obvious to anyone who cared to think about it: if you shut down industries, print money, pay people to stay home and otherwise disrupt and destroy supply chains you get price increases, delays and shortages. As if labor wasn’t tight enough, vaccine mandates are driving more people out of the work force.
One of the scariest phrases is “I’m from the government and I’m here to help.” When I heard Biden was going to get involved in the supply chain issues, particularly the ports on the United States left coast I knew it was only going to get worse.
Their brilliant solution? Fine Shipping Companies if their shipping containers remain in the marine terminals for too long. How that will actually enable the shipping containers to get unloaded and moved faster is anyone’s guess. Perhaps the shipping companies weren’t sufficiently motivated before and that was the problem? It makes no sense to me.
But I don’t have the experience in supply chain management that Biden and Harris do. Wait, scratch that, as a kid I worked in a warehouse shipping packages for four summers. Not stellar credentials in supply chain but four more summers experience than these public “servants” have.
Government Dysfunction
Forgive me for repeating myself when I use the phrase government dysfunction. When it became apparent Biden was going to occupy the White House and the blue team was going to have both chambers of congress I thought it was going to be bad. Really bad. I thought it would be bad because I don’t think that taxing, regulating and spending work and that is pretty much all Biden can or would do.
If you do think that taxing, spending and regulating work then we’ve been deprived from the socialist paradise by two moderate Democrats (or if you’re from New York or California, right wing extremists).
I am waiting for the other shoe to drop because Senator Joe Manchin a blue team member from West Virginia and Kyrsten Sinema, another blue teamer from Arizona are actually doing things I don’t wholly disapprove of. Or to be more precise they are not doing things.
That is the standard I have for politicians: did they do one or two things I don’t wholly disapprove of? If so they’re doing pretty good relative to their peers.
When his wife was appointed to a federal position that pays some $163,000 per year for public “service” I thought for sure Manchin was bought and paid for and would march to whatever beat Biden (who whomever is actually in charge of the executive branch) drummed.
But so far he hasn’t.
Manchin has put the Kibosh down on ending the filibuster (which is a racist Jim Crowe relic when anyone but the Democrats use it), he’s stopped the IRS from violating the fourth amendment by being able to snoop on anyone’s bank account with more than $600 $10,000 in transactions in a year, which is basically everyone not on welfare. He’s stopped the carbon tax and done some other good stuff. I didn’t realize there were still moderate Democrats but there is Joe Manchin.
Kyrsten Sinema gets some credit too. See? I can say something nice about Democrats.
Politicians always fail us, usually miserably, so I’m sure it is only a matter of time before Manchin and Sinema are brought in line and they click their heels like a good party members and do as they are told. But not so far.
Biden the Lame Duck
President’s who don’t accomplish anything are great. Gridlock in Washington is great for ordinary Americans. If Biden turns out to be a lame duck that would be fantastic. If you’re on the government dole it is a bummer, if you’re connected with the right folks in government you might not make another few million which is a bummer, but I’m convinced that for everyone else government inaction is a real plus.
Biden’s approval rating is pretty bad. I’m glad the US isn’t officially in Afghanistan anymore and I give Biden credit for having actually withdrawn. Obama didn’t make it happen, Trump didn’t make it happen. Biden (or whomever is actually in charge of the executive branch) made it happen. Full credit for that.
But even still it was a disaster. Incompetent leadership is not without its costs, some of which are deadly serious.
I’m not a military man (and neither is Biden) but why wouldn’t you make sure the US civilians (and Afghan allies) were evacuated PRIOR to withdrawing most of the military? I don’t think you need to have gone to West Point or the Naval Academy to have that instinct. What happened over there makes no sense to me.
Seeing desperate Afghanis clinging to airplane landing gear so they would not be left behind to be killed by the Taliban was disturbing and horrifying. But perhaps the worst was when the United States government killed an innocent family of 10 including 7 children.
That combined with how he is “handling” COVID-19 and the economy I think Biden’s prospects at a second term, should he decide to run, are not great. Disclaimer: “In my opinion the President has more power than he should have but less than people realize. The President gets blamed when the economy is doing poor and gets credit when it is doing well. But it’s all unwarranted.” But while not impossible (as we’ve seen with Jimmy Carter, George H.W. Bush, and Trump in recent decades) it is tough to beat the President in an election.
Regardless I expect the blue teamers to do poorly in the mid-term elections. My political predictions haven’t been stellar, but if history is any guide the party occupying the White House tends to lose ground in the next election cycle, and with Biden being less popular than most things (ok that link is to a satirical news site), I don’t expect 2022 to be any different. At this point in my life, I would be content if no new laws were passed and the government was in deadlock. When either party gets control particularly bad things happen.
Gold Has Failed as an Inflation Hedge
This has been a real bummer because I’ve written about gold a lot. I’ve written about how I think it is an important part of a diversified portfolio. Well inflation is here and gold hasn’t done much of anything. Stocks are up, real estate is up, Bitcoin and Ethereum are up, plywood is up, Costco has reinstated paper towel quotas, even $163,000 a year isn’t enough to buy a US Senator anymore, the CPI for goodness sake, a metric seemingly designed to not measure inflation is up. It seems like the price of everything is up, except gold. Gold is not up. Maybe it is a “barbarous relic”. If you own any I wouldn’t sell it, but it has been a disappointment.
Sure, it had that tease-of-a-run-up in 2020 where it broke over $2,000, but since then it has dwindled and is stuck around $1,800. While it is better than a sharp stick in the eye gold going form $1,500 at the start of 2020 up $300 as of writing this isn’t going to save anyone from inflation. That is about a 20% increase. Meanwhile, the dollar has depreciated some 15% during that time. Not fantastic.
I still think gold is important. It doesn’t have counter-party risk, it’s been subjectively valued for thousands of years. It’s not liable to get replaced by Bettercoin 2.0 like Bitcoin is, but I would have expected it to go up more during COVID times.
The World Has Gone Mad
The world has gone mad, but it didn’t happen in 2020, it happened much, much earlier. Twenty-twenty was certainly crazier than other years but it could have been worse.
I don’t mean to downplay these past few years for those who have lost loved one or who have had their life dramatically impacted by COVID-19 and the ensuing government response. Almost 5 million people worldwide have passed as a result of COVID-19. If you’ve lost a friend, family member, co-worker, teammate or anyone else due to COVID-19 it is not a statistic it is a very real tragedy. If you’ve lost someone because they couldn’t get preventive care or screening because of the lockdowns, if they committed suicide as a result of the social isolation resultant from social distancing policies and lockdowns, if they’ve lost hope because of job losses these are all real tragedies. Perhaps you yourself are suffering. These are all real and tragic realities that we’ve all been coping with to one extent or another.
Having said that I want to end on a (relatively? kind of?) upbeat note. The last couple years have not as bad as the Bubonic Plague outbreak of the 14th century where perhaps 25 million people (about 2/3 of Europe at that time) perished. It’s not been as bad as the 1918 pandemic where perhaps 50 million people died. It wasn’t as bad as the mid 1940s in Europe during World War II when an estimated 50-70 million people died. Or the 1950s in China under Mao where some 30-40 million people died or were killed. Thankfully, nearly 223 million people worldwide have recovered from COVID-19. It’s not like we’ve had World War 3. And while that is a low standard perhaps that is good enough for now. And God willing, perhaps 2022 will be a little better.
Peter Schiff is Chief Economist & Global Strategist at EuroPacific Capital. He is also chairman of a gold reselling company. He appears on RT and has authored several books about the collapse of the dollar. Peter is a vocal critic of the US Federal Reserve and warned loudly about the housing bubble prior to the 2008-2009 financial crisis.
I owe much of what I know about the Federal Reserve to Peter Schiff. I’ve read some of his books and used to listen to his podcast.
But I’ve come to realize that Peter Schiff is not someone you want to listen to for financial or investment advise. The following are some key areas where I think he goes wrong.
His EuroPacific Funds are Expensive and Underperform
I invested some money with his firm, EuroPacific Capital between December 2014 and December 2020.
During that 6 year timeframe, my investments with EuroPacific Capital went up 20.5% (about a 3.8% annualized return) which doesn’t sound too bad until you consider the S&P 500 doubled in price during that same timeframe and provided an annualized return of nearly 15%.
Peter’s firm EuroPacific Capital, charges what I consider to be high load fees and they underperform. For someone who preached about inflation, you’d think he’d make sure his funds at least beat inflation. They don’t. Looking up his funds on MorningStar, you can see the poor 5 and 10 year returns.
The EuroPac gold fund has a 5-year annualized total return of 2.29%. Inflation has been well over that for the past five years.
His Bias for Gold and Silver Blinds Him
Some might consider me a gold bug. I believe gold and silver are an important part of a diversified portfolio. But with Peter being a gold salesman, he is overly biased towards gold, this has caused Peter to miss out on an emerging asset class (cryptocurrencies) that while more volatile, has far outperformed gold. He has unsuccessfully predicted many tops to this asset class.
Not only that, but he’s failed to predict where all the Fed money printing would go. It’s gone into real estate, stocks, cryptocurrencies. It hasn’t gone into gold, silver and foreign stocks the way he has been predicting.
He Can’t Time the Dollar Crash
Peter Schiff is the boy who cried wolf.
Sometimes there is a “wolf” and when there is, it’s is important to let other people know there is a wolf so we don’t all get eaten.
Peter did correctly cry “wolf” before the 2008-2009 “wolf” reared its head. But he’s been wrong ever since.
Peter is a big fan of extended metaphors. So here is one for him. Peter is the boy who cried wolf, no one believed him and it turned out there was a wolf and he was right. Then he cried wolf again over and over again for the next 12 years as if the wolf was just behind the bushes, even though the wolf was 500 miles away.
His rhetoric that the dollar crash is imminent might be an effective sales tactic in the short term, but he has been wrong since the 2008-2009 financial crisis. It weakens his message and erodes his credibility to the point that I don’t listen to him anymore.
He has not been able to time when the dollar will crash. I agree the US Federal Reserve is reckless, is a prime cause of market crashes and price inflation. There is no question the dollar will continue to lose value. But will it happen all at once in a huge crash, or will it continue to decline 2-6% per year like it has for over the past 100 years? I don’t know and Peter Schiff certainly doesn’t know.
He has had no ability to predict how long the powers that be (the big banks, the military industrial complex, the Federal Reserve, the US government) can keep the dollar charade going. He will talk and write about how “The Dollar Will Implode When The Markets Figure X Out” but the market consists of a lot of people who stand to benefit from the charade continuing.
If you listen to Peter you will probably be correct eventually, after all, reserve currencies don’t last forever, but you might not benefit from it in your lifetime. Or you might.
What Can you Learn from Peter Schiff?
I certainly wouldn’t bet the farm on the US maintaining its reserve currency status for the next thirty years. I will remain thankful to Peter for opening eyes to some very real risks the US and the dollar face. But I will never be happy that I missed out on a 100% return if I hadn’t been invested with his firm from 2014-2020. He is not the person I will be going to to figure out how to grow and protect my wealth.
The answer is to take a more diversified approach and to keep your costs down. You can own foreign stocks through a low cost Vanguard mutual fund. Most large non-US companies are listed on US exchanges anyway. Most US companies have large foreign components for their business. When you invest in large US stocks, you are also investing in their non-US sales.
I think owning 5-10% of your liquid net worth in gold and silver is important. I think if you have some extra money to speculate on with cryptocurrencies that could also result in some outsized returns. I think owning hard assets like real estate and yes even some gold and silver is important.
But thinking there is some impending dollar collapse looming on the corner doesn’t do any good. It certainly hasn’t for the past 12 years.
I’ve punched a lot of keys on the ‘ole qwerty debating the merits of cryptocurrency versus gold and precious metals. But when all is said and done, gold has gone up very little while cryptocurrencies have gone to the moon. I was reminiscing on some old articles and I came across “No, Even with ETH at $2 Gazzillion, Ethereum Cloud Mining Isn’t Profitable” and I’m reminded that at one point I could have bought 62 Ether (ETH) for $561. ETH was trading at $9 per coin back then. As of writing ETH is trading at $2,455.48, so those 62 ETH would be up 27,183.1% to over $152,000 in about 4 years or so. Not bad.
I remember reading about the Ethereum network before it even launched. Based on my philosophical musings of money I thought it would important for a cryptocurrency to have non-monetary use in order to be valued over the long term and not just be a speculative fad. The ability for Ethereum to support DApps in addition to “just” being a currency checked boxes and so I chose to buy some ETH. At one point I probably owned 50-60 ETH.
EOS Is Superior to Ethereum based on Several Metrics
Of course the Ethereum network was at that time, like it is now, relatively slow as highlighted by “Cryptokitties” one of the distributed apps built on Ethereum that caused the network to grind to a proverbial halt. To date the most transactions per second processed by the Ethereum network is 19. I decided to sell ETH and instead placed my cap at EOS. EOS was labeled an Ethereum killer at one point and some people said that EOS stands for “Ethereum on Steroids.” Of course this was all before Ethereum went to “the moon.”
EOS uses proof of stake (instead of Ethereum and Bitcoin’s energy intensive and slow proof of work) and has handled up 9,565 transactions per second. In my view, assessing the EOS network and Ethereum network, EOS is superior.
However the market disagrees.
The market capitalization of EOS is $5.9 billion, the market cap of ETH is $285 billion. So clearly the market favors Ethereum.
For a long time I didn’t think this market cap was in any way justified. However, because of Ethereum 2.0 and with Ethereum down 36% from the highs, I’ve decided to buy some ETH.
The “Best” Technology Doesn’t Always Win
It is hard for me not to think that the better technology won’t win out in the medium term. However, this often isn’t the case. Good technology is important, but there is name recognition, brand, leadership and the network effect, which I’ve realized I tend to discount too much.
Apple in the 90s is a great example. Macs at that time were considered to be higher quality, more innovative and easy to use. However, a lot of people used Windows based PCs at work and wanted to use what they were familiar with at home, PCs were less expensive, and more people used Windows in general. So people chose Windows and Microsoft had a larger market share as a result. There were certainly rational reasons for choosing Microsoft Windows/PCs over Apple/Macs even though a strong case could be made for superior Apple technology.
Apple was able to overcome this in the early 2000s and onward but that is a topic for another article.
EOS Has a Likability Problem
A lot of developers are interested in and devote time to Ethereum, a lot of the cryptocurrency community was and is pro Bitcoin and pro Ethereum. Ethereum was sometimes thought of as “Silver to Bitcoin being Gold.” Ethereum entered the scene in a much more diplomatic way.
The technological founder of EOS, Dan Larimer, referred to proof of work as a technological dead end, was more abrasive and alienated more people. There were also issues, perceived and otherwise, that EOS is not in fact very decentralized. EOS had a market cap in excess of $16 billion in April of 2018 but has never recovered these highs.
That is was makes the excitement about Ethereum 2.0 so interesting. EOS can already do a lot of what Ethereum 2.0 is promising to be able to do in the future. But Ethereum has people like Mark Cuban talking about it, it has more name recognition and more development interest. The cryptocurrency community, and people outside the space know about and accept Ethereum in a way other cryptocurrencies can’t match.
Ethereum Has More DAapps
According to State of the DApps, there are 2,782DApps on Ethereum and only 328 on EOS. However, EOS has handled 353.18k in the last 24 hours (as of writing this article) compared to 201.92k for Ethereum. So despite the technological limitations in transaction count and less energy efficient consensus model, developers choose Ethereum on which to build their DApps.
Ethereum Has More Name Recognition
Most people have heard of Bitcoin by now. I doubt many people on the street will have heard of EOS or associate it with the cryptocurrency. Ethereum is much closer to Bitcoin in terms of name recognition. I decided to test my theory using google search trends as a proxy and found that searches for “ETH price” far outstrip searches for “EOS price”. This is an admittedly flawed approach as EOS could also refer to the Canon Cameras, the “Entrepreneurial Operating System” and there is even an EOS fitness. I don’t think Ethereum shares it’s name the way EOS does. But if anything this inflates the number of searches for EOS price beyond those searching for the cryptocurrency.
Ethereum 2.0 Should Address Many of the Performance Issues
Ethereum 2.0 should address many of the performance issues that caused me to favor EOS over ETH in the first place. Add that to the tailwinds it already has and it could be a great speculation. I’ve decided to buy some ETH and plan to continue to average in on pullbacks. You probably shouldn’t listen to me, this isn’t investment advice and I’ve had a bad trading track record when it comes to crypto, particularly on the sell side.
I wrote a little bit about the mechanics of shorting stock and naked shorting of stock. Some version of what I described in Scenario C happened to a hedge fund called Melvin Capital. Melvin Capital was heavily short GameStop (GME). The price rose rapidly and it sounds like they didn’t have enough money to close their position. According to the New York Post, “Hedge funds Point72 Asset Management and Citadel gave a $2.75 billion capital infusion to Melvin Capital earlier in the week, enabling it to close out that position with a large loss.”
Remember that name: Citadel. Citadel is a huge client of the trading platform Robinhood. Robinhood sells trading information to Citadel.
The retail traders on Robinhood trade for free. On platforms like Google, Facebook and Twitter where you get something for free you are the product.
Citadel is Robinhood’s customer. Without clients like Citadel Robinhood doesn’t make any money. So there is motive for Robinhood to want to keep Citadel happy.
Was there any hanky-panky between Citadel and Robinhood? Did Citadel tell Robinhood to halt trading so a hedge fund they sank billions into could close their positions? I don’t know. I don’t have evidence that this happened. But the motive is definitely there. Motive by itself isn’t sufficient though.
Should someone look into what happened? Don’t worry: Treasury Secretary Janet Yellen is on it! She is the first female Treasury Secretary and she is on the case.
Treasury Secretary Janet Yellen
Former Fed Chair and now Treasury Secretary Janet Yellen did very well for herself while between jobs. She has made at least $7.2 million in speaking fees. This number includes some $800,000 paid to her by Citadel. The same Citadel who is a huge client of Robinhood and bailed out Melvin Capital.
But guess what, despite what I think is a clear conflict of interest. Treasury Secretary Janet Yellen will be presiding over a regulatory hearing regarding the GameStop saga. So what are the chances that the Hedge Funds come out the loser in all this? I don’t think they are very good.
I don’t think regulations help that much anyway. Many do more harm than good. But let’s say you believe we need strong financial regulation. How is that supposed to happen when the regulators are getting millions from the people they are supposed to be regulating?
If anything happens, I suspect some of the more prominent “redditors” will be accused of something and trotted out as the scapegoats and the hedge funds will get away free. Even though the hedge funds were the ones who lost money due to them having poor risk management and being incredibly short a stock.
I’m not an attorney but from an ethical perspective I don’t see how the redditors buying the stock did anything wrong in seeing hedge funds were over-short a stock and taking advantage of what Melvin Capital were doing.
So what is the Lesson Here?
This is just one example of how the foxes are guarding the hen house.
Going back to the GameStop drama: some people probably made money buying GME but as of writing this it is back under $55. I suspect most redditors lost money on GME. GME peaked at around $483. I’d like to know how many people knew to buy GME at say $20 or less and then decided to sell at $400 or even $300.
Maybe some of the folks who lost money on the GME trade believe it was worth it just for the chance to stick it to a hedge fund. As for myself I’m not in favor of cutting off my nose to spite my face.
It is really hard to bet against the house at their own game and win. The hedge funds are too powerful and they pay the regulators’ speaking fees. Even the folks in the “big short” of 2008-2009 were gutsy insiders.
That is one of the reasons why I like a 10-20% allocation to physical gold and silver. Despite manipulation in the futures markets for these commodities, you are still opting out of the tradition financial system.
I was wrong in my prediction regarding the 2020 election season. I thought it was most likely the red team would retain the senate with Biden in the oval office or what I called “Scenario 3”. I wrote “Scenario 4” was second most likely and that is what happened: Biden in the White House with the blue folks in control of the Senate.
My understanding of the Senate also lacked nuance. While the blue team does have a simple majority in the Senate thanks to 50 members plus Vice President Harris breaking ties, only certain legislation can be passed without a 60 Senator majority. With a simple 51 vote majority the Senate is (somewhat) limited in what legislation it can pass to what is authorized in the budget reconciliation process.
My very superficial understanding of the reconciliation process is that it must pertain to spending and revenue and can only be used once per year. It could be used to raise or lower taxes (for the blues it would be raise) and who knows what other tomfoolery.
Taxing and Spending
But even with the blue group being somewhat limited by the reconciliation process, I can guarantee new taxes and more spending. Perhaps Wall street either likes the tax and spend approach, or the market had already priced in a Biden-Harris Administration, or perhaps it is simply the removal of the election uncertainty for the next two years, combined with vaccine optimism, regardless of how the election turned out.
In any case the S&P 500 is up nearly 9% since November 5th.
Wall Street does seem to love spending, and doesn’t seem to care about the national debt. So while I wouldn’t expect the stock market to crash because of Biden’s tax and spend approach, I do think the economy would fare better under low taxes and fiscal discipline.
Perhaps Trump will say the stock market is magically back in a big, fat, ugly bubble again now that he isn’t in power. I think the stock market has been in a bubble for a while. However, the ability of the powers that be to keep the bubble inflated has far surpassed what I believed possible.
Debt
Even though the blue team is known for spending, their tax hikes don’t cover the bill. To be fair red team doesn’t have many fiscal conservatives either. The national debt goes up regardless of who is in power.
I predicted back in January of 2017 that the US nation debt would go to $40 trillion under Trump. However, under the Trump administration, the debt only went from about $19.9 trillion to about $27.7 trillion. Granted I thought Trump would win reelection at the time I made that prediction and he would have 8 years to run up the debt by over $20 trillion.
Unless Trump runs for office again and wins, my $40 trillion prediction was wrong. However, I think the national debt will go to $40 trillion by the end of 2024.
I think over the next four years it will go from $27.7 trillion to over $40 trillion. It would mean about $3 trillion per year. In 2020 the national debt increased by $4.2 trillion. I’m sure Biden will be looking for a big spending package in 2021 to get his administration started off with a bang.
Government spending financed by debt reduces the value of dollars, so more dollars are required for later stimulus in order to have the same effect. For example in 2008, when the banks were being bailed out the debt went up by about $1 trillion. Then the next year the debt went up by $1.8 trillion.
Granted 2020 had COVID-19 and lockdown crisis, but that hasn’t gone away. In 2018 and 2019, with the economy supposedly humming along and no large-scale military engagements, the debt still increased by over $1.2 trillion each year.
My $40 trillion prediction is based on the national debt going up by $4-5 trillion in 2021, followed by $2.5 trillion per year after that.
This is one reason why interest rates can’t rise. The treasury issues debt at a variety of maturity rates. But as interest rates rise, that means the government has to pay out more money on the debt. The treasury is already paying about $393 billion per year in interest at current rates.
In June of 2007 the yield on a 10 year treasury was 5%. In the wake of the 2008 financial crisis it has steadily fallen. While still stupidly low, the 10 year treasury yield has been rising. In July of 2020 it was as low as about 0.5%. Since then the yield has risen to about 1%. As I said before it is still stupid low, in contrast the 10 year treasury yield was 15% in the early 1980s.
However, the market is addicted to low interest rates. If the 10 year yield continues to rise and gets to 3 or 4% I think that would be devastating for stocks. As mentioned above it would also dramatically increase amount the treasury would need to pay in interest. For example at 0.5%, $2 trillion would cost $10 billion, but at 3% it jumps up to $60 billion. But it isn’t just the new debt, as older debt expires and the borrower gets paid back, the treasury issues new debt to pay for it, which must be issued at the new rates.
I’m sure the Federal Reserve will step in and drive the yield back down before that happens. The Washington elite definitely don’t want a stock market crash to happen when the blue team is in control of the government.
Warfare
I think the Biden-Harris administration is much more likely to increase hostilities in the world. Despite all his faults, and alienating allies of the United States, Trump didn’t start any major military engagements in the world. I believe Biden-Harris will follow the Bush II and Obama approaches to foreign policy.
More war is good news for “defense” contractors, but less positive for everyone else. The loss of human life in war is the most tragic element and the most important reason to avoid military action except as a last resort. A distant second reason for avoiding war is that bombs, drones and aircraft carriers are expensive and contribute to the national debt. Surely the military action, as it always is, will be dressed up flowery rhetoric to make it seems necessary, noble and courageous.
Wealth Management
I think a 10-20% allocation to precious metals is as important now as it ever was. Gold has been down and sideways since the new high was made in August of 2020. It seems to have support at around $1,790 per troy ounce. I think this is consolidation prior to the next leg up.
Stocks only seem to go up. Valuation and fundamentals don’t seem to matter.
While I always have some exposure to the stock market, I’ve missed out on the some of the gains of the last 8-9 years since I’ve been underweight US stocks. I’ve been waiting for a buying opportunity. I was considering buying in around March of 2020, but I expected the markets to go lower.
I was wrong.
The powers that be are able to maintain the stock market prices far beyond what makes sense to me. I’m planning on averaging into various mutual funds over time. Perhaps my capitulation is a sign that the top is near!
Despite all the challenges from higher taxes, more regulations, debt and lockdowns, there are still productive businesses out there. While I think Biden/Harris and their allies on the blue team will make things worse, there are still plenty of reasons to be optimistic. Being in a “bunker mode” for the past 8 years has cause me to miss out on a significant stock market rise. At some point I think the dollar will crash and maybe stocks will go down too, but that is what the precious metals are for.
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