September 6 Post
Hi Again,
We managed to gain 3.79% in August. Now we are in September which is the worst month (historically) for the market. For the longest time, all experts have been expecting at least a 10% correction but the market does not like to go down. The theory is that all the liquidity created by the central banks of the world is driving asset prices. We have so much in common with the 1920s and we know how that story ended. History tends to repeat itself. The US Federal Reserve went from “not thinking of interest rate hikes’ to “thinking about hikes” and even that did not scare the market. Per CNBC on 8/30/21, 65% of retail stock investors are buying on margin debt! When market start to go down in a big way, these people are going to be in big trouble and create an avalanche to the downside but no one has a timeline on that. Consider it a buying opportunity!!
Usually volatility in the bond market leads to volatility in the stock market but these is a time lag between the two. We already saw volatility in the bond market so we could see volatility in stocks over the next 6 months. Bond investors try to be ahead of the Feds so even if the Feds tighten a little, bond investors could run for the exit. Carter Braxton Worth, Market Technician believes that the market will be down by 12/31/21.
GE effected a 1-for-8 reverse stock split on July 30, 2021. The split adjusted shares began trading on August 2 above $100, the company announced. The reverse split multiplied the price of the stock investors own by 8, but also reduced the number of shares they owned, by dividing the number by 8. Our “scorecard” was adjusted accordingly.
What happened to GE? For decades, GE used to be the company most respected and admired by all other companies in the world. Former CEO of GE, Jack Welch was known as the pope of CEOs. After his departure, everything came crumbling down. The current CEO is expected to build back GE but a reverse stock split? Only companies who are afraid of getting delisted from the NYSE etc. go through a reverse stock split. No one thinks that GE is in danger of getting delisted but they seem to think that they can get more respect with a reverse stock split. How sad!
Larry Williams, is the author of 11 books, most on stocks and commodity trading. On 8/24/21, Larry stated the following:
· Historically first week of September is bad for treasury bonds
· At this time small speculators in the bond market are buying while the big commercial speculators are selling. Generally, small speculators are wrong. This is a bearish sign.
· Over the next few months, bond prices will go down and the bond yield will go up and that is bad for the stock market. (Remember October 1987? A sharp movement in yields for 30-year U.S. Treasury bonds helped set the stage, with the yield jumping to 9.61% on Oct. 1, 1987, from 7.39% at the beginning of the year, according to the Federal Reserve)
Now for Bitcoins! What the Chinese government has been doing is not good for the Western World but it is good for China and most of its people. They have been tightening restrictions on bitcoins for a long time. Is there anyone who has not heard about “ransom ware” and the connection to Bitcoins? Now experts state that with all the bitcoins the criminals received from ransom ware , they have purchased sophisticated hacking equipment to do more damage in the future. Warren Buffet and Charles Munger spoke out publicly against Bitcoins and how it is helping criminals around the world. Wall Street money managers mocked Buffet and Munger as their combined age is close to 200, claiming that they have lost touch with the current world. Wisdom comes with age and Wall Street money managers are blinded by greed. On 4/12/21, Barron’s included a very good booklet on Bitcoins and Cryptos; and according to that report, 2.4% of the account holders own 95% of all Bitcoins! Millions of Americans (not to mention other nationals in other countries) have suffered due to Bitcoins enabling “ransom ware hacking”; and the worst is yet to come. In the future, directly or indirectly, almost all Americans will suffer due to Bitcoins. Setting pride a side, our authorities should take a lesson from China and tighten controls on Bitcoins. Many Bitcoin holders find that their accounts get completely “washed out” by hackers overnight! Anything not “hackable” today could be “hackable” tomorrow. Let me repeat, per Barron’s (4/12/21), 2.4% of the account holders own 95% of all Bitcoins!