Crisis Investing 101: Crashes Equate To Opportunity
The Tactical Investor states that as long as the trend is up or unchanged, you should jump for joy. In other words, buy when the masses panic and sell when they are joyful. This simple illustration explains why all sharp corrections or crashes or whatever the naysayers would have you believe are nothing but investment opportunities. That is really what crisis investing is all about, seeing opportunity where others see disaster.
Take a look at the long term chart below or any long term chart of any major index and you will see that in every instance the markets recouped their losses and trended higher. This begs the following question; for whom exactly are these Wall Street experts working for? The answer is obvious; they sell their services to the highest bidder. In this instance, this happens to be the shadowy top players who know precisely when to sell and when to buy.
Remember Crisis investing states that disaster has to be viewed through a bullish lens
They know this information because they have utilised exactly the same strategy dating back to the Tulip bubble (and probably earlier). The idea is to create huge fantastic stories of the carnage that lies in store for the market the moment it starts to pull back. In doing so they sow the seeds of doubt into the masses and when the masses are in doubt, it is easy to trigger a stampede.
Once the masses stampede logic goes out the window and panic takes over and the top players come in and purchase all the top stocks the masses are dumping for pennies on the dollar. Every Stock market crash is nothing but a repeat of groundhogs day over and over again.
A Crisis is the secret code word for Opportunity:
Look at this chart carefully; most will see disaster every time the Dow Jones pullback strongly. They would falsely classify this as the end of the world but in reality, it was nothing but a buying opportunity. When Fiat ends, and nobody knows when that day will occur, we might have to change our mantra. Until that time, extremely strong corrections have to be viewed as buying opportunities.
This chart dates back to 1990. What do you see? Well, we will tell you what we see? There is no such thing as a crash? A market crash is a matter of perspective, and the masses always examine the situation with fear as their guide and stupidity as their master.
It is a crash only if one is stupid enough to wait until the top to commit all one’s funds which the masses are famous for doing and if one is equally stupid enough not trade without any stops in place and then close the entire position at or close to the bottom. Trend players never buy at the top, they always deploy most of their funds when the market is putting in a bottom.
The masses are doomed to repeat history because they never learn and as a result, they can look forward to a nice battered dog house when its time to retire.
Crisis Investing & Corona Virus Update April 2020
While it may have been scarier in 1987 and 2008, at least to Buffett, there’s no denying that it’s been a brutal stretch for investors.
The so-called Oracle of Omaha appears to be well-positioned to weather more market turbulence. At last count, Berkshire Hathaway was holding $128 billion in cash.
“Buffett did not amass his fortune by following the herd but by leading it,” RIA Advisors strategist Lance Roberts recently wrote in a blog post. “He is sitting on a $128 billion in cash for a reason. Buffett is fully aware of the gains he has forgone, yet still continues his ways. Buffet is not dumb!” Full Story
There you have it from Buffett so what are we doing at the Tactical Investor.
The masses are in a state of hysteria, so we are going to load up on quality stocks, for we know that 15 to 24 months from today, the masses will be weeping tears of blood. They never learn; every time the market crashes, they run and that is why the rich get richer and the masses get dumber.
One should understand that the route of today’s problems is Fiat money, and as the money supply increases so will the number of issues facing this world. But as the problems arise so will the opportunity factor, but for that, one needs to stop falling for conspiracy type theories and focus on taking actionable steps. 10% of the populace thinks outside the box, but roughly 3% put this information to use. The rest either fall into the “conspiracy storytelling camp” or the “resistance camp”; both positions are all talk without the follow-up action.
On a lighter note
What do you think of this video? Is it cute, or funny; if you did, please comment at the end of this article? Videos with positive emotions are said to lower one’s stress; they provide one with the ability to view things from an objective perspective. When emotions do the talking, logic does the walking, and the result is far from healthy or pleasant. Please comment below and let us know if you find this new approach to be of interest.