Authored by Christoph Gisiger via TheMarket.ch,
Fred Hickey, editor of the investment newsletter «The High-Tech Strategist», warns that the stock market is still in a bubble. The veteran investor says why he avoids red hot technology stocks like Amazon and instead bets his money on gold mining companies.
The chaos seems to be just getting started. To add to the perspective DJIA is at 19,976. That is about the range the market was in January 2017. The DJIA market peaked at 29,398 on February 14, 2020. It took the market 3 years and 1 month to get to its peak. It has taken < 35 days to get back to 2017. But maybe this is the 2018 event and things will go right back up the peak a little over a year later. The Supply Chain broke in China. Now the demand side is completely broken, worse that the supply side break. Just getting started?
With the chaos unfolding hourly, keeping your eye on the ball can be hard through all of the noise. Take Boeing, taping their $13B credit line to keep the lights on. With US Corporate debt at all time highs, time to make list of who is in for a collapse. Small, mid, and large caps it is all the same issue. Borrowing of money for stock buyback or pay dividends to juice stock prices will not hold up anymore. Simple issue the businesses do not justify the prices, but taking stock out of the market sure helps.
What does panic look like, look around you. But this is worldwide. Justified or unjustified it is out of control. Question is are your prepared to weather the storm?
The supply/demand curves are completely broken. When Japan's earthquake unfolded, the supply side was interrupted, but demand remained in place.
The headlines are out. GDP last year (2019) @ 2.3%. Slowed from 2.9% in 2018 and below the White House goal of 3%. Going back in time to August 2018, the US government changed how GDP is calculated. The articles by The Guardian and Seeking Alpha gets into the details of the new calculation.