Investment Opportunity & Market Crashes

Irrefutable Evidence that Crashes Equate to Investment opportunity

RGLD is a Gold stock. We purposely selected this stock to illustrate that even a sector-specific stock that one should generally only get into when the sector triggers a buy proves that crashes are buying opportunities.

Doing nothing but buying and holding these stocks would have yielded incredible gains. Notice how fast the profits started to surge after 2011. This is due to only one factor: The Fed began to print more money. The recovery period between boom and bust is almost 5X faster than in 2009. If one had only used long-term charts (monthly charts) to buy and sell the above stocks, one would have fared even better. For example, one can utilise the monthly charts to jump in and out of the market while the trend remains positive. Using this simple strategy, one could have at least doubled the above returns. Experienced traders could take things a step further. Use the weekly charts to jump in and out while the Monthly chart is still trading below the overbought zone. Essentially, one would sell when the stock was trading in the overbought ranges and re-purchase them when it moved into the oversold zone. Only traders with some knowledge of TA should attempt this.

Applying the conservative cannonball strategy to several plays above would have yielded much higher returns than the buy-and-hold strategy. Cannonball strategy simply implies purchasing LEAPs when the stock is trading in the extremely oversold range and selling the position when the stock is sitting in the highly overbought zone.

The simple lesson we are trying to convey here is that if one does not panic and logic does not go out the window, and one can bank outstanding gains over the long run. And history is on our side in this regard.

If you give in to fear, you won’t see the next opportunity. This is particularly important now, for the top players are creating new narratives on the fly. What does this mean? They can prematurely create the illusion that the Bull market is dead forever. They have so much money that all of this is a game. Power is addictive, so they will keep doing this with more frequency. Hence those that don’t prepare themselves psychologically for this ploy could end up losing everything.

The masses always confuse Fear & Investment Opportunity

The big players create every disaster or crash for only one reason: they delight in fleecing the masses. They want fear to take over so that you will gladly sell your top holdings for nothing; many will beg to bail out at or very close to the bottom. These players will then sit out of the markets for years while a new set of players are lured in. Finally, the old players (the ones that sold at or close to the bottom) will jump in (usually years later) and then the big boys will kill the new and old fish in one shot. Market Update September 11, 2022

This game has been repeated for generations; it will continue for one simple reason; the masses do not pass this valuable data to their offspring. Sadly, a new set of suckers are born every year.

The bottom line; things always look rough in the short term, but the rewards that await the Astute Players are massive. 2023 might start rough, but it will provide Tactical Investors with many fantastic opportunities. Putting this conservative cannonball strategy to use should amplify the gains.

The needle in the Anxiety Index has moved deeper into the panic zone, and a long-term bottom is unlikely until the gauge is close to the end of the hysteria zone. One strong signal that a bottom is close at hand will be when bullish sentiment drops below 10, bearish readings spike above 60, or Neutral readings come in at 55 or higher.

We have the first signal indicating a Father of all buys is likely (FOAB). This is a very, very rare signal. The last time the markets remotely approached this trigger was in 2009. The most crucial objective has been satisfied, and now we wait for the secondary objectives to be satisfied. If this signal is triggered, it will indicate that the next bull market could last a decade. Remember the monstrous bull that followed the 2008-2009 crash.