I have been voicing my concern recently of a market top, which should have significant downside after such a violent market move up. (40% in 8 weeks).
When this market turns, which may have been today, its going to get ugly, fast.
I wanted to take a moment to ensure I am clear about most bear market traders like myself. We do NOT want the stock market to crash. People's 401K's that have become 201K's become 101K's is a crime, that deserves mass prosecution of the perpetrators of this offense. When I describe reasons to short a stock, or buy gold miners, it isn't out of some sort of perverse need or desire to see the US economy to fall apart.
Most bear market traders are people who read, think, and form opinions on what the actions being taken today will produce in the future. I cannot in good faith for my family or my friends and family buy general stock funds on the hope that huge deficit spending by the US government will produce years of prosperity.
I cannot buy stocks in the banking system, when the US Government will not enforce the law, and will not fix accounting rules that allow banks to obscure the companies value.
I will not advise buying US Treasuries as a long term investment, when the same government has outright stated their goal is to create an inflationary environment. But only a little one, that is controlled, and will be defused when needed. The US government has not yet once announced a plan that has gone according to plan. Communism does not work, free markets do. And the US Government trying to control a free market 1/2 way does not work. If we want to go full communist, lets get it over with and set the prices for everything.
I cannot buy a company like DIN, which it's stock price went parabolic up, over 700% in 7 weeks. This from a company that depends on disposable income where over 6.6 Million people are on continuing unemployment, with another 500K+ new unemployed being added monthly.
To me, the greatest exercise of free speech is the ability for the individual to be able to spend their money on buying food, clothing, shelter, give(donate), and investment as they see fit. As an investor there is always two sides of an argument, the value of the investment will rise or will fall.
A FREE society allows an individual to "bet" on either side. A non-free society, like China, disallows shorting. The US was the same way at one point, but discovered market dislocations occur when everyone must bet on the same side. Most bear market traders are also bull market traders, but "switch sides" once the reality shows the direction of the market trend.
The blogs I read, such at TheMarketTicker, Mish's Global Economic Trend Analysis, TheSmartMoneyTracker, TheBullzAndTheBearz, often take a critical eye to current news, stock trends, and market direction. The information digested on these blogs provide me with a perspective I do not get from the "free media". We live in a fantastic world where the likes of these bloggers can share and digest information with everyone in the world, for next to free! 20 years ago, this current situation would not allow me to get more accurate information than what was crafted for me by the government or corporations.
Further, people like KArl of the MarketTicker are actively creating political movements to reverse the market downslide. See FedUpUsa.org
So as a Bear Market trader, and blogger, I spend my time to articulate to you the reader so I can hopefully help you to safeguard your family's financial security. To inspire you to be more alert to the realities of what is occurring, to help influence political change. And for some other readers, to possibly give ideas of investments in either short term or long term.
I anticipate a blog post "in days" that depicts a very large bear announcing decisively the bear market has arrived, and be prepared for a ride down into the abyss.
I do not take joy in the announcement, but I am prepared for it. Are you?
Excellent post Murf. As your "co-conspirator" in shorting the stock market, I'm glad that you took the time to explain to people the mindframe we have, and the rationale behind our investment decisions. There is a huge difference between wanting the market to crash vs. accepting that it will and therefore betting on it.
ReplyDeleteThinking very long-term, America was founded as a country based on truth and honesty. I have always believed that societal changes move like slow-moving pendulums. In my humble opinion, 2006-2007 was the peak of corruption and dishonesty, and we are now slowly swinging back over a 20-30 year cycle towards an embracing as a society of hard work, truthfulness, and far less focus on materialism. An economy that is based solely upon excess debt and needless consumption will eventually be refocused into something far more productive (possible examples: curing diseases such as cancer, finding cheap clean energy alternatives, etc.). However, this transition process for the economy will likely begin with a gut-wrenching cleansing of the stock market, along with the companies that are no longer viable as the attitudes of society slowly shift.
Good luck to everyone.
Happy John