Putting things into perspective. It's a question of when and not if......

[SOL]

This will go into the next update, so here is a preview. In order to win, you have to have a stake in the market; if you have no stake, it does not matter whether you are right or wrong. You will walk away with ZIP. If fear is your main driver, then you know nothing about investing. Investing is about focussing on the trees and not the bushes. You look at the full picture instead of focussing on the short term aberrations. History clearly illustrates that FEAR PAYS POORLY.

While the Bears win, their moment of Glory is short-lived.

If they don’t move fast, all those gains can quickly evaporate. On the other hand, a long-term investor only needs to focus on the trend, and the odds are above 90% that he will win.

Pessimism is one of the best long term buy signals.

But everyone forgets this because they want things to turn around rapidly. Sometimes they do, but usually, they don’t. The concept of investing is easy but putting it into practice is hard for most investors who lack both patience and discipline. No bear market, no crash, no recession, etc., has marked the end of the financial market. So why do you think it will be different now. The only thing that fluctuates is the duration of the correction

For the record, investors are currently more bearish than they were during the COVID crash. During that time frame, the highest bearish reading was around May 9th 2020, and it came in around 53. The SPX tacked on more than 25% after the high of 53 in May 2020. And it continued to trend higher, putting in a series of new highs. If you were a bear, you would have lost everything and more.
In Dec 2018, bearish sentiment hit 51%. While there was some volatility, 180 days later, the SPX was trading almost 20% higher.

Bearish sentiment In April 2013 also traded past 50 briefly, and once again, the bears got hammered. Six months later, the SPX was up almost 7%

The record so far for bearish sentiment is around 71 in March 2009, arguably one of the worst corrections in modern history. Shortly after that, the markets bottomed, and 26 weeks later, the SPX was up almost 42%. This also turned out to be one of the most potent bulls in history. Remember, the equation must balance, and the upside action is more decisive and always lasts longer.

In contrast, on May 1st, 2022, bearish readings soared to 60. It’s interesting right that the highest readings in 2020 and 2022 both occurred in the month of May. History does not repeat itself, and it rhymes, so the odds are above 90% that the markets will recoup their gains and plenty more. It comes down to the question of when and not if. If you are short, you are running against the clock. If you buy the right companies and wait, time is on your side.

Game Plan

Build a wish list or use our list. Deploy more capital into green colour coded plays. Once the bottom is in ( you will only know this later), you can deploy more into speculative or higher-risk plays.
Enable DRIP. This is an excellent way to speed up your rate of return
Learn how to sell covered calls (SCC). Worst case scenario, your upside profits are limited. But you can always buy the calls back and sell new ones. Or you can let the shares be called away and purchase new shares and start the process all over again.

Learn how to sell cash-secured puts (SCSP); this is a very safe strategy, provided you don’t mind owning the shares. It is safer than a limit order, and you get paid while you wait. If the shares are not put to you, you get paid for putting in a limit order. You can learn the basics of SCSP and SCC in less than 2 hours if you are a fast learner. If understood correctly, these strategies can help generate a steady income stream. You can use this income stream to purchase even more shares. In our opinion, it is worth putting in several weeks to master these strategies, though, in all honesty, the basics can be mastered quite quickly. More importantly, both techniques are just as safe as selling or buying a stock.

So if you have time, are not using the money you need for your daily expenses, and more importantly, if you don’t give in to fear, your odds of success are close to 90%. Investors lose because they give in to fear, forget what they are investing for, and even forget what investing is all about. If you only focus on the short term, you are not an investor; you are a gambler and gamblers, like bears, will lose 90% of the time.

Here is another titbit. Historically after bearish readings surge past 51, the average gain for the SPX has been roughly 7%. Still, this year the correction has been brutal and bearish readings surged to 60, so when this bull regains its feet, we suspect it will produce another stellar run.

Buy when there is blood in the street; buy even more when some of the blood happens to be yours

[AstuteShift]

The game plan is simple but many refuse to believe it’s that easy

Some people need to suffer suffer suffer to get awakened. Others or the majority will never wake up

[SOL]

from a long term perspective I view this as an incredible buying opportunity. Short term its hell there is no point mincing words and since i have gone out of my way to lower my expenses I am going to put all the extra funds I saved towards the markets, but in lots. I will also consider using margin shortly but not yet

For the record now is the time to live one standard below your means and if you are true contrarian aim for two standard below and set these funds aside to deploy into the markets

[chrisbang]

The powers that be did a little shakedown to get SPX below support of 3860 and now at closing we're green. Funny how that works!

[xkosmox]

Have been super interested in these Sell Put+Buy Far OTM calls and sell covered call strategies.

However, my investment sum doesnt allow for any of them to happen (lot size is in the lower hundreds, not the thousands)

To get even 100 units of stock will cost me 5-10% of my total investment sum, an amount im not willing to risk.

Was wondering if theres any way to circumvent this? Or wait 10-20 years until I can afford fhis strategy

[Eric]

A friend told me Fidelity is offering micro options now? Options on just one share... So us mere mortals could sell a put on one share of GOOGL since I don't have a 7 figure portfolio with a quarter million laying around to drop on GOOGL.

[SOL]

Have been super interested in these Sell Put+Buy Far OTM calls and sell covered call strategies.

However, my investment sum doesnt allow for any of them to happen (lot size is in the lower hundreds, not the thousands)

To get even 100 units of stock will cost me 5-10% of my total investment sum, an amount im not willing to risk.

Was wondering if theres any way to circumvent this? Or wait 10-20 years until I can afford fhis strategy

Aim for lower-priced stocks that have good growth to excellent growth potential. For example HIMX rules on all metrics. LOW P/E, Low P/S, strong demand, etc.

Stocks with high growth potential (decreasing P/S) generally perform better than low P/E stocks if P/E is the only metric you are going to buy, but these stocks should fall into the small to the mid-cap range.

[SOL]

A friend told me Fidelity is offering micro options now? Options on just one share... So us mere mortals could sell a put on one share of GOOGL since I don't have a 7 figure portfolio with a quarter million laying around to drop on GOOGL.

i suspect mini options are coming. For example each option will control 10 or 20 shares. This will push more people to speculate as was the case with mini and then micro futures contracts. But the asute player can use these new tools to their advantage to sell puts and covered calls.

[Yodean]

Have been super interested in these Sell Put+Buy Far OTM calls and sell covered call strategies.

However, my investment sum doesnt allow for any of them to happen (lot size is in the lower hundreds, not the thousands)

To get even 100 units of stock will cost me 5-10% of my total investment sum, an amount im not willing to risk.

Was wondering if theres any way to circumvent this? Or wait 10-20 years until I can afford fhis strategy

You can pick a few "safe" stocks with dividends to run your own version of the Wheel. For example, I think 100 shares of INTC at current prices is pretty worthwhile. So you can accumulate the shares with the SCSP tactic, while collecting premiums. If shares get assigned, you DRIP INTC and collect dividends, while running the SCC tactic on your position.

INTC's volatility isn't that bad, it's cheap, and a lot of these "pendulums" are tailwinds behind it - chips, A.I., government support, sentiment-people generally don't get too excited by this stock, etc.

[SOL]

Inflation 'is inseparably linked to the supply chain,' former Home Depot CEO says

Inflation appears to be spilling into all parts of the economy, with one primary reason being ongoing supply chain constraints.

"Inflation is inseparably linked to the supply chain," former Home Depot CEO Bob Nardelli told Yahoo Finance Live (video above). "I look at a global view of the container ships around the world and we have well over 550 ships right now floating on the water waiting to get unloaded. We have an equal number of tankers floating on the water ready to get unloaded."
https://finance.yahoo.com/news/inflatio ... 49137.html

More individuals will start to wake up to the great CON, until the VM (velocity of money) starts to accelerate all the current inflationary forces are manmade. Real inflation has been an issue since we got of the Gold standard, but the current woes are due to supply chains and leaders that are suffering from massive Brain damage.

[harryg]

I don't understand the relevance of whether or not this current inflation is man-made.

There seems to be an implication that is it somehow not real.

Inflation is ticking up in the UK, official figures 9% but to say that is on the low side would be an understatement. They are claiming that it's mainly due to energy price increases, but I have noticed instant jumps of 10% and 20% on many food items.

https://markets.businessinsider.com/new ... 022-5?op=1

[bpcw]

I don't understand the relevance of whether or not this current inflation is man-made.

There seems to be an implication that is it somehow not real.

Inflation is ticking up in the UK, official figures 9% but to say that is on the low side would be an understatement. They are claiming that it's mainly due to energy price increases, but I have noticed instant jumps of 10% and 20% on many food items.

https://markets.businessinsider.com/new ... 022-5?op=1

No expert here but if the true definition of inflation is the velocity of money and that this is due to money printing that goes into general circulation and not the pockets of the already super rich then it tends to lead to permanent price rises because you can't easily take that money back out of circulation. However, if prices go up due to supply chain issues then they can go down again once the supply chain issues are resolved.

Very willing to be corrected here as it's something I want to understand more.

[harryg]

OK thanks bpcw, that makes sense.

I and many others here are truly fortunate (maybe don't realise it) that these type of price jumps are irritations than anything else.

For many, they have a major impact.

If you are familiar with the words of Mr Micawber, ("Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery"), that's my overall philosophy.

I have pals who are just now taking on mortgages of £750k, £1m, to buy bigger houses. Part of me thinks that they've got it right and not me – after all, debt is being inflated away.

But I can’t help feeling that £1m, although maybe not such a large sum as it was when we were little, is a lot of money not to have.

[bpcw]

OK thanks bpcw, that makes sense.

I and many others here are truly fortunate (maybe don't realise it) that these type of price jumps are irritations than anything else.

For many, they have a major impact.

If you are familiar with the words of Mr Micawber, ("Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery"), that's my overall philosophy.

I have pals who are just now taking on mortgages of £750k, £1m, to buy bigger houses. Part of me thinks that they've got it right and not me – after all, debt is being inflated away.

But I can’t help feeling that £1m, although maybe not such a large sum as it was when we were little, is a lot of money not to have.

I hadn't heard that saying, sounds very modern!

Joking aside it sounds like the same philosophy as mine, I mean how much does one really need to live on and enjoy life. I've had a great day today meeting up with friends over a cuppa outside a local McDonald's, relaxing and will spend the evening with family and have a couple of glasses of wine this evening, luvly jubly!
Debt is slavery so why take on so much, better to get rid of it as soon as possible, it may work out for them but how much of a burden and stress along the way, just so you can say in retirement how much you've a accumulated that you can't enjoy as much due the lack of energy or health in old age.

[SOL]

I don't understand the relevance of whether or not this current inflation is man-made.

There seems to be an implication that is it somehow not real.

Inflation is ticking up in the UK, official figures 9% but to say that is on the low side would be an understatement. They are claiming that it's mainly due to energy price increases, but I have noticed instant jumps of 10% and 20% on many food items.

https://markets.businessinsider.com/new ... 022-5?op=1

I am not saying it's not real; the gist is that it's being created due to manmade obstacles hence the term MANFLATION. Real inflation, which is an increase in the money supply, has been an issue since we got off the gold standard. Price jumps etc are the symptoms of the diseases, and VM predicts if the symptoms will worsen or remain under control.