Today we’re bringing you something new — a weekly sneak peek at what our editors are writing for their paid subscribers.
First up is the introduction to Nick Hodge’s September issue of Wall Street Underground Profits.
It highlighted two new gold recommendations, one of which is up slightly while the other is up over 12% already. The positions are only a couple weeks old and it is still a great time to get in on them.
Take care,
Adam English
Editor, Outsider Club
When you received the August issue last month, I told you that the next leg up for gold would take it to $1,550.
It surged to that level over August, and is in the midst of a textbook pullback as I write.
That pullback could see gold fall to the $1,386 to $1,430 level. That would be ok and we’d still be in a gold bull market.
Markets continue to be in flux as the western world drags itself back to school and work post-summer.
The faster those traders get back to their desks (as they say) the quicker they can realize Europe and Japan are in trouble and the Fed is the only one left with any sort of tools to combat still-slow economic growth that never recovered from 2008.
Add in some additional rate cut(s) and quantitative easing later this year from Mr. Powell, and the stage is set for new highs in gold and U.S. stocks — but only in the short term for the latter. Debt levels, interest rates, and stubborn recessionary cycles means days are numbered for stocks.
No one knows how numbered, of course. But here are some of the major points and ideas that need to factor into your thinking:
- Interest rates are the lowest they’ve been in thousands of years. It should be eye-opening that something is amiss in the global economy. But instead it is blindly accepted. Worse, the media elevates those who support negative rates as intellectual. Down is not up, folks. Never will be. There is now some $17 trillion of negative-yielding bonds globally.
- The U.S. national debt is now at $20 trillion. And to illustrate how far we are off the path, some “intellectuals” are now saying that debts don’t matter. “Why should a country’s debts matter,” they posit, “if that country can just print more money with its central bank to buy the debt?” This is the basis of so-called Modern Monetary Theory (MMT). I wonder if Julius Caesar considered it?
- Passive Funds. Don’t take it from me, take it from Michael Burry, who made a fortune betting against collateralized debt obligations in the last crisis and was the hero of the movie “The Big Short”: “The dirty secret of passive index funds — whether open-end, closed-end, or ETF — is the distribution of daily dollar value traded among the securities within the indexes they mimic. “In the Russell 2000 Index, for instance, the vast majority of stocks are lower volume, lower value-traded stocks. Today I counted 1,049 stocks that traded less than $5 million in value during the day. That is over half, and almost half of those — 456 stocks — traded less than $1 million during the day. Yet through indexation and passive investing, hundreds of billions are linked to stocks like this. The S&P 500 is no different — the index contains the world’s largest stocks, but still, 266 stocks — over half — traded under $150 million today. That sounds like a lot, but trillions of dollars in assets globally are indexed to these stocks. The theater keeps getting more crowded, but the exit door is the same as it always was.”
That’s all numbers-based market stuff. I love anecdotal evidence as well. And anecdotally, the big money is clamming up.
Last month saw the failed auction of a 1939 Porsche Type 64 after the winning $17 million bid wasn’t high enough to meet the “reserve price.” Bloomberg has also reported that demand for cars costing more than $1 million “collapsed at the 2019 Monterey Car Week” held in August.
If the richest among us can’t buy classic cars… imagine how the rest of the world is feeling.
To get more insights and full issues from Nick, as well as see his #1 gold pick right now, check out this Wall Street’s Underground Profits Special Presentation.
