And you know what, what better way to hedge the dollar than finding value in stocks.
You hold onto your depreciating dollar.
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Those that survive may appreciate but will their value? That’s the key. It’s all about the value man.heres how to think about it simply.
You are on an island with 20 dollars. The resource on the island is 5 coconuts. That’s 4 dollars a coconut. I give you 8 dollars, that’s two coconuts. I turn on the printing presses and print another 20 dollars. The resource remains the same, 5 coconuts. Only now a coconut is worth 8 dollars. You can now only buy 1 coconut.
What you need to find first and foremost is a store of wealth. That’s where most of your wealth should be. 2000 years ago when Jesus walked the earth a personally tailored set of clothes cost an ounce of gold. A personally tailored suit today costs the same. That’s a store of wealth. Investing in something that loses its value by true inflation isn’t.
What does ten dollars buy you now and what will that cost in 20 years. There are precedents for when the printing presses start cranking.
You know what you do to counter the devaluing of the dollar (which it won’t on a grand scale, it will continue as the world currency)…?
You get more dollars.
You know how you do that?
You buy stocks long.
I’m sorry, but we are never going back to the gold standard.
Shiff is doing a good job since the market is in ruin, but he’ll again be irrelevant when we get back on our feet. Which is not going to be as long as the stupid media is forcing people to believe.
You will earn a comparable amount more in 20 years.
We are on different pages brother.
Good luck to you.
Where’s your wealth?
Property, bullion and cash
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I own property, cash, bonds and stocks.
I don’t own bullion.
We’re not all that far off.
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Any idea Doc, or others, why the majors didn’t get hit that hard today? XOM, COP, BP, CVX all down just a little. I would have expected them to get hammered. Maybe they’re the ones getting paid to take the surplus?
Hey, I can’t wait until they pay me to fill up at the pump.
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They are all 50% or more off 52 week highs and aren’t at risk for BK like some of the smaller players.
It’s because it’s an expiration play. If you’re long a physical commodity at expiration you either have to sell it or take delivery and May crude expires tomorrow. There’s little to no storage available so the longs had to sell futures and paid dearly to do so.
June crude hovered at $20 the whole time.
The real play would have been to have had an empty tanker floating in the Gulf of Mexico waiting for a moment like this…
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Here’s a video with great relevance for today. Dave Lee, holding class.
Don’t you drive a Tesla?
No, I have a Leaf and a Dodge truck. One day…
June crude is down to $11.50 as traders realize the capacity constraints will continue into summer.
Construction just completed on a 330,000cf storm water detention vault for one of our clients. It has yet to be connected to the storm system. I let him know that he is sitting on a prime 2.5million gallon underground crude oil tank right now that would cost peanuts to fill haha
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Dipped into the financial services today. Bought BAC, WFC, JPM & PNC.
I also made a cannabis purchase. I bought IIPR which is a REIT that does buy and lease back arrangements with growers. Risky since they only have 11 tenets. Fortunately, people are staying home and smoking pot.
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I added to these today too.
I’m honestly not sure whether you’re being sincere or sarcastic. I’ll give you the benefit of the doubt and assume sincere. Stocks are not as low as they can go - quite the opposite. Stock valuations are very high from a historical perspective. The market cap to GDP ratio is a good measure of this…
And, keep in mind GDP is going to drop significantly in the next couple quarters, meaning stocks are going to have to fall just to keep this ratio at present levels.
Recessions (which we are in, no doubt about it) take 11 months to play out on average, and stocks tend to bottom somewhere in the second half of a recession. We’re just getting started.
There are fundamental issues with the economy. We saw those issues manifest in the oil market first because the Fed isn’t touching commodities. The Fed is purchasing financial assets at an unprecedented rate, but that won’t stave of economic gravity forever.
Regarding the stock market in particular… there are numerous indications (besides historically high valuations) we have more downside to come. Treasury yields are at historic lows. Volatility is still very high. Gold is up. Banks are hoarding capital in anticipation of commercial and consumer defaults. We are seeing signs of deflation despite the massive QE and historic stimulus, which means all the fiscal and monetary policy aren’t even enough to offset the slide in demand.
That’s to say nothing of the Coronavirus. On 4/11, the IHME virus model (the one the government uses) anticipated about 13k total virus deaths in New York by the time we’re all done. That prediction has been revised to about 24k in the current version of the model. NY deaths are important to consider because NY is post-peak and further ahead than most major metro areas in the country. Clearly, the models aren’t accurate, and we have no idea what the human toll of the virus is going to be.
I would love to hear a well thought out counter argument to the points above. I really hope our economic future isn’t as bleak as signs suggest.
Just be careful. To come back from a 50% draw down, you need to be up 100%. Preservation of capital is key.
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