Marc Faber Wrong: black Monday crash a buying opportunity

black Monday crash

Black Monday crash: All Bark & No Bite

Dr Faber aka Marc The Bust Faber continues to provide the best definition for the term insanity. He advocates doing exactly the wrong thing and the right time.  If one had paid heed to his so-called sage advice over the years, one be bankrupt several times over. The solution, stop listening to him chant the same “death to the markets hymn” he has been chanting forever.   Marc continues to state with impunity that the market is going to crash; mind you he has been singing this same song for decades. Stock Market Crash 2017 is the same story he pushed in 2016 when he stated the stock market would crash then.   One day the stock market might crash and that crash might rival the 1987 stock market crash. But, that day is not today and might be a long way in the makings.  Astute Investor should focus on the trend as was the case during the Black Monday crash of 1987

Never follow the Herd

RTN Tactical Investor Trend Score

Is there anything different right now? In essence, this the same setup from yesterday.  The theme is same; the media pushes out stories that the world is going to end. To make these stories carry a gravity of seriousness they hire financial prostitutes, that will say whatever you ask them to say as long as they are paid well enough for their lies.

In the short-term, these ramblings usually take the market lower, but that was the whole of adopting this strategy. It provides the top players with the opportunity to pick up well run companies at a huge discount.  If you fast forward, you will find out that in every case the markets recouped these losses.

People will mention Japan as an example of a market that is still trying to play catch up decades later. Well, what happened in Japan happened in a different era? We are now in the era of devaluing or die, in other words, every nation is hell-bent on debasing its currency or it is being forced to because major players have jumped on the bandwagon. In such an environment, normal rules, do not apply, and central bankers usually respond by flooding the markets with money.

Regardless of this issue, look at this long-term chart of the Dow and it clearly illustrates that every so-called disaster was nothing but a buying opportunity.

Stock Market Crash 2017 will not rival 1987 Stock market crash

Black Monday crash & All Market crashes Equate To Buying Opportunities

Our strategy is simple; we never buy at the top, as we have a simple rule when it comes to investing. Buy when the masses panic and sell when they are in a state of euphoria.  Has anything changed this year or will anything change going forward?  Nothing will change, the masse will panic when they should be buying and they turn euphoric when they should be selling their stocks. As our Volatility Indicator had soared into record territory, we expect market volatility to ratchet upwards significantly, but this should be viewed as a positive as the trend is up.

 

Volatility is a two-way street; this means that one should expect large price swings on both ends of the scale. Given the run up the markets have experienced over the past seven years, the current correction while strong is nothing to panic over.

August 1, 2019 Update

One needs to understand that it takes time to get used to the principles of mass psychology as it disregards many of the so-called laws of financial wisdom, most of which, if one is truthful, would fall under the category of rubbish.
The only real law that applies when it comes to the financial market is that there is no law. We are dealing with emotions and when emotions run amok, all hell breaks loose, that is why like cattle, the masses always stampede when the markets sell-off and all of them jump in when the bubble is about to pop. Hundreds of years have passed since the Tulip bubble and nothing has changed.
We have simplified the most important aspect of investing, and that is identifying the trend of the markets. If you ask any investor, who has put money into the markets, what’s the hardest part of investing, they will answer without hesitation that determining the trend is the hardest part of the investing process. Many individuals don’t fully understand how much time and effort we allocate to determining the trend. It is a complex process that entails examining several factors and then all these separate pieces of data are combined to help determine the trend.

The trend is your friend

Once the trend is identified the rest of the investing process is relatively easy.   We issue many plays and the reason for this is simple. It provides every new trader with an option to identify plays that appeal to them. It is not easy to get rid of past conceptions and embrace new ideas.  This process takes times, and therefore, we are trying to make it easier by providing such a vast array of plays. Now instead of being overwhelmed by the number of plays, one should understand that one does not need to open a position in all the plays. Choose those that appeal to you and ignore the rest until you get used to our methodology. As you gain the confidence you can deploy larger amounts of capital.

Random Thoughts on Investing Sept 30, 2019

Now if Trump does not win, what does that mean? Absolutely nothing (as far as we are concerned) in the grand scheme of things and we would not lose one night of sleep over it.  We would move onto Plan B; life goes on with or without you.  However, there could be a civil war like event if he losses and you already know why, so there is no need for us to discuss this topic. For those of you that don’t; well, here is a hint; this country is deeply divided into red and blue sections, and the red section is quite large in terms of size. The blue section is large in terms of population density. When two hot heads clash, all hell breaks loose, and the animosity between these two groups grows by the day.

Until the trend changed in China, we were silent on china, because the trend favoured them and we don’t like to waste time on empty rhetoric. The same line of thought applied to our stance on the precious metals sector. Even though we favour hard money principles we are wise enough to know that it’s fools dream to think anyone in power will allow such thoughts to gain traction. That is why we diverged from Gold in 2011, much to angst of the Gold Bug and Hard money communities; they falsely assumed that our stance from 2003 to 2011 when we were extremely bullish on the sector indicated we were gold bugs.

We are not Gold bugs, technology bugs or any bug for that matter. We are trend players, and if the trend turned bullish on peanut vendors we would embrace that sector. So from a financial perspective, a Trump win will be bullish for the markets, and that’s the same thing we said back in 2015.

Will he win? That is another story, but the hidden support we are tracking remains unchanged, and that hidden support could be as much as 20%.  As we stated his biggest drawback is his big mouth. If he were to cut back his rhetoric by 50%, his likability would probably rise above that mark. However, it seems an impossible feat; he seems to take a perverse delight in slugging it out. Therefore, even though the show looks wild now; we can quite comfortably state that we are only at the appetiser level.  The stench from this all-out catfight is going to get so bad that a skunk in comparison will smell like a rose.

Other related stories 

Crude oil price projections: will oil prices stabilise or continue dropping (Jan 25)

Investors worried about a stock market crash 2016 (Jan 21)

Is VIX pointing to a Stock Market Crash in 2016  (Jan 20)

Oil crash: Is the price of crude heading lower in 2016 (Jan 20)

6 Rules to making money in the Markets Using Mass Psychology  (Jan 20)

College Sugar babies; trading sex for Tuition