Marc Faber Wrong: black Monday crash a buying opportunity

black Monday crash

Black Monday crash: All Bark & No Bite

Marc Faber is famous for doing exactly the right thing at precisely the wrong time.  Had you listened to or had he listened to his own advice over the years both you and he would be bankrupt several times over. The solution, stop listening to him chant the same “death to the markets hymn” he has been chanting forever.  He has been stating this market is going to crash for years. 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 day and might be a long way in the makings.  Focus on the trend and not the noise as did the astute traders during the Black Monday crash of 1987

Never follow the Herd

RTN Tactical Investor Trend Score

Let us take a pause and think about the current situation.  Have we not seen this before?  The theme is always the same, something bad is going to happen a stock market crash is imminent, take cover and run for the hills. Sure, in the short-term the markets have experienced some violent moves, but fast forward, in every case, the markets recouped and traded higher.

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

We have never advocated buying right at the top; our theme was to view strong pullbacks as buying opportunities to open new positions. Has the situation changed so much since last year? Are we also going to join the pack of naysayers?  Before we answer that question, let’s examine the issue of volatility. Last year we emphasised several times that volatility was going to be a major issue as our Volatility Indicator had soared into record territory.  In fact, in early Jan, we republished comments that we had sent out to our subscribers in Dec 2015, listed below

Our V indicator has surged to yet another high, so extreme volatility is here to stay. In fact, 2016 will probably be remembered as the most volatile year on record.

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 confidence you can deploy larger amounts of capital.

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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)

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