Forgive me Lord, but I actually watched “TOUT-TV” (CNBC) and put on the sound yesterday. I also spent time flipping through Bloomberg and Fox Business. While many of the typical “Talking Heads” that are card-carrying members of the “Don’t Worry, Be Happy” crowd were on, their usual “all is well” pitches had turned into caution or outright bearish outlooks among some. When it came to TOUT-TV, I actually went to another TV just to make sure I actually was watching “Happy Days Network”.
Sadly, most of the financial services community and their clientele still have their heads buried in the sand and still refuse to even consider what I said in late 2015 – 2016 shall be the year to pay the piper.
U.S. Stock Market – Despite being oversold, the S & P 500 is close to breaking key support. Tossing words around like crash or collapse brings no joy – but a meltdown is not just a remote possibility.
I noted that an old client in late 2015 said to me he knows I’m right about my extreme bearishness towards the economic, social and political landscape of America and the world; but goes to bed hoping I end up wrong. That person sent me an email last night saying he has given up hoping against hope and recognizes much of what I said in my year-end commentary is now playing out before his eyes.
Please know I take no joy in saying I told you so. Ironically, the overwhelming number of financial advisors who had clients load up through 2015 up on financial assets versus use that time to get out of most (as I suggested for much of the year), personally profited far more on average than I did (most people chose their path over the one I suggested). Few liked hearing brutality honest advice of any type; but especially on matters of finance when it bursts the fantasies the financial services industry peddles daily.
U.S. Bonds – I continue to believe U.S Treasury Bills and Notes are the lesser of two evils versus equities (but all other types of bonds remain a no-no). It would have been hard to find someone more bearish on high-yield bonds at the height of that market in 2015. Despite already taking a fair amount of gas, that market appears to still have a long way to go on the downside.
U.S. Dollar – It would come as no surprise to yours truly that the Fed’s interest rate hikes end up just a one and done (thanks to the U.S. economy and financial markets picking up speed in reverse). The dollar’s reign as King of the currencies shall come to an end and only exacerbate an already bad situation.
Oil – My own personal target remains the low to mid-$20’s for oil. But as noted most recently, this is one area where I think a plan to accumulate versus diminish seems appropriate.
Gold – It may just be “false hope”, but gold appears to be groping for a major bottom here. Records shorts and a seemingly universal belief gold died (but no one bothered to tell gold it did), has still not led to what seemingly everybody and their mother have been predicting for months – a break below $1,000.
I dare suggest (like losing millions of dollars and being called some not so nice names wasn’t enough) yet again that gold and related major mining stocks may finally be at a point similar to oil-related equities have become, where some sort of accumulation plan should be seriously considered. As always, do so with an abundance of caution and with the aid of a qualified financial advisor.