October 10th FAIL: The folly of trying to time markets
DJIThe infamous cover of The Economist had it wrong, if you buy the whole 10th of October, 2018 prophesy / conspiracy theory.
Yes, 10/10/2018 did see the markets decline. I put that squarely on FUD mongering. The declines, as bad as they were, did not push markets to bearish levels.
Could it be we are at the beginning of a massive market crash? It would not surprise me.
Did it happen on the tenth of October? No.
Is it likely to happen soon, even currently? Yes, there is an apparently high degree of probability that the crash is going to happen, because of hyper inflation and low interest rates, notably in the U.S., home of the world's largest economy (if you discount China's actual larger economy beneath the headlines), and home of the world's reserve currency, the US Dollar.
Is it a foregone conclusion that the crash will happen this month? No.
What could prevent the markets from crashing? Fiat financial policies. Politics. Collusion in the governments, financial institutions, markets and banking systems.
What will assure the crash does happen and resets the markets as are so deeply needed? Courage, wisdom and the intelligence of policy makers who should put financial stability and solvency ahead of personal politics and financial interests. Count on them to do so, I don't.
What is the likelihood that authorities like The Fed and others will do what is necessary to properly manage these very risky times? Not high. The mounting evidence of authorities playing out the roles of the 3 monkeys (hear no evil, see no evil, speak no evil) is a strong indicator of foreshadowing that greed and market manipulation by corporations and the ultra wealthy are bent on continuing their greedy habits until the bandage is ripped off of the wounds still festering and visible to anyone who looks at any major market chart over the past 5, 10, 20, 30, 40 and 50 years.
Do you remember the 1990s book about how each subsequent boom and bust occurs over increasingly contrasting cycles? Namely, that when they occur under normal market conditions, the cycles are shorter and steeper. And that the thing that prevents these cycles from behaving naturally in this way, is government and monetary policy interference. When I review the historic charts of the markets, this seems most evident.
Do you think that hyper inflation and low interest rates are the two main reasons that the last nine years have seen a historically significant period of economic growth in the US and around the world? I believe that this is obviously the case, based on the available data.
Do you think that this means we are literally in a huge bubble that is sure to burst, as all bubbles do? I know I think that.
Do you think that the crash may very well be of historic proportions? To me it appears that the bubble is so massive, that the only way to really correct it, is to see a truly enormous drop, down to at least semi-realistic levels?
If you know these things, then you may realize that these hyper growth and hyper crash cycles, are real, and they have been happening now for decades. And we are now at a point where the only thing keeping the illusion of a healthy economy is the government band-aids of printing more cheap money. The symptoms indicate to me that a major correction is on the way.
What do you think? Am I way off-base here? Am I spot on? Or am I somewhere in between the two extremes?
Am I bearish or bullish on the markets? Right now, I'm very bearish. I got out just before the major drops, on October 4th, although not due to the FUD. I researched my investments, as much as I could as a typical individual investor without any special access to the 'smart money' info sources. I saw that my portfolio was just about the drop and crush my gains. I happened to be right, this time. I actually sold my portfolio the day before, however due to the slowness of the tools I use, the order went through on the first day of the sudden drops, last Friday, Oct. 5th.
My strategy (for now, anyway) is to let the markets do their thing, and when there is a clear trajectory, make my move. If it drops significantly further, ie: if there is a real crash and bear market, and a new lower level is reached and supported, and the economy resets, I'll buy back in at the new lows, with an emphasis on stocks that do well in difficult economic times. Notably: Vice stocks. Tobacco, alcohol, gambling, adult entertainment, etc. And, stocks of companies that sell weapons and other offense and defense industries (civil and military), because there will be (in my opinion) a higher likelihood of increased conflict around the world if the markets meltdown and economies collapse. As sad as it is, we all know that companies trading in vice and conflict do well when markets are down.
That said, and without emotion, I hope to be able to to donate a reasonable portion of any profits from such investments, to what I determine to be good and well-positioned charities and organizations that work to reduce the abuse of said Vices and Conflicts. it would be my way of legitimately exploiting the worst of the exploiters, and giving financial resources to those who are giving their best efforts to reduce and stop the worst of human behavior.
Additionally, I am acquiring more cryptocurrencies, as I believe that they will fare better, especially if (really I mean when) fiat currencies do fall and adoption of crypto becomes relatively common. As we see more 'smart money' buying into crypto, this is a strong indicator of where the money will be, once the new economic lows are set.
I would not be surprised to see the next 6 - 24 months be bearish on traditional markets (stocks, bonds, commodities, etc), and I expect to see the best cryptocurrencies rise during that time, especially in countries where the economic crashes are felt the most, and where crypto is appreciated as a better choice for investment.
And having pointed out all of this, I must remind the average speculative investor that trying to time the markets is a fool's errand. if you timed your moves to Oct. 10th based solely on a 30 year old magazine issue, your move could have been a mistake. The real bear market is yet to arrive. Trying to pick the exact time and place that it will happen, is an unwise waste of time. It is wiser to monitor your interests and investments and act when you see clear indications that it's time for you to make your move. Don't fall prey to FUD or FOMO. Do your own research. Make the best decisions you can for your interests. Stay ahead of the herd. Trade as a contrarian. Buy low. Sell High.
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