July 7, 2011
Cody Willard's The Cody Word
How to trade the biggest bubble ever
blogs.marketwatch.com
Let’s talk more about the importance of contrarianism in our trading and how it applies to the markets vs. the economy in our analysis and approach.
Look at the impact of unprecedented monetary easing and ongoing 0% Fed loans, or at the record-levels of corporate cash, both of which will continue funding buybacks, or simply look at the continued policies from both/either parties all of which are intended to expand corporate profits and lower tax payments for the biggest companies in the country.
None of is a good thing long term…but is it BEARISH for the stock markets? These macroeconomic trends and political forces are not good for the broader economy and they’re certainly not fair or good for main street…but all these trends that he’s talking about are WILDLY BULLISH for the stock markets.
And when you think about how the economy and stock markets can and do unhinge from each other for quarters, years and even nearly up to a decade at a time, you can more easily allow yourself to see that the most likely outcome here is that a new, bigger, better/worse than ever stock market bubble is coming.
The rush to label everything in this country a disaster right now is tempting. And with continued unemployment at levels we’ve not seen in my lifetime and probably yours either, there’s no denying that things aren’t great out there for the vast majority of Americans.
But that reminds me of the times back in 2007 when I’d be on TV or at a hedge fund conference and these same people who are so bearish today were explaining to me that the markets would be in bull market mode because of things like housing, real estate, unemployment and banking profits all being so strong.
Full blog: http://blogs.marketwatch.com/cody/2011/07/07/how-to-trade-the-biggest-bubble-ever/
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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