2018: Year of Great Opportunities and Traps For Investors

The year 2017 has been stellar for stock market investors. Interestingly, most of the rise has been caused by enthusiasm about the future.

The large reductions in the governmental regulations, hopes that there will be more in the future, hopes that tax cuts will be substantial and fuel future economic growth, and hopes that the efforts of the far left to derail the president’s growth agenda will fail, have all led to the rise in optimism among investors.

Wall Street firms have just issued their forecasts for the stock market in 2018. The forecasts seem to be looking for 10%–15% rise in

Beware: “Sentiment” is Not an Exact Market-Timing Tool

For the past several months, we have heard many top hedge fund and other analysts voicing their concern about the markets, with some forecasting a crash or at least a sharp plunge because of overvaluations.

Former hedge fund manager Jim Rogers, now residing in Asia, told Business Insider that the greatest crash of our lifetime will happen “later this year or next.” He says, “Be worried.”

Another well-known analyst, Marc Faber, told CNBC that he sees a plummet of 40% or more, and “it will end very badly, extremely badly.” He didn’t say when.

Analyst David Stockman, former budget director for President Reagan,

By |November 29th, 2017|Tags: , , , , , |

Bubbles are Bursting: Oil, China, Global Stock Markets, and now Trump?

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Donald Trump’s rise in the Republican polls was meteoric. But at the Iowa Caucus, he was handed a defeat and came in second. Close only counts in the game of “horseshoes.”

World-wide, all the bubbles produced over the past seven years are bursting. Why should politics be exempt?

Why Are Stocks Still Rising? Is This A Bubble?

Here is an article by Bert Dohmen, our founder, on Forbes.com, of July 24, 2014.

Investors often ask me, “why is the stock market still going up after five years?” They think it must mean ‘prosperity is ahead.’ Actually, it’s largely due to financial engineering: stock buybacks.

It’s important to see who has been doing the big buying. The only big buyers of stocks over the past five years are the Sovereign Wealth Funds of countries and corporations buying back their own stocks (buybacks). The amount is well over $1 trillion per year.

The Stock Market: Floating to New Highs

The stock market is being pushed up by forces having nothing to do with the free market. The ‘agenda’ apparently is to push the market higher, at minimum until year-end. Washington has nothing else improving except the market. And the Treasury’s PPT can continue push the stocks up until some serious selling starts. Then they may be overwhelmed.

The smartest, biggest investors are turning bearish on the market. As we wrote last month in the Wellington Letter, sometimes it pays to be ignorant of the facts and pay attention only to liquidity rather than other fundamentals.