Trust is gone.
Many investors have always had a sneaking suspicion that the financial markets are rigged against them. But, there was always just enough hope, just enough trust, just enough belief in “fair” markets that the little guy would keep playing the game.
But, the puppeteers aren’t even trying to hide the strings anymore.
Elected officials liquidate their stocks while they give speeches about how the economy will come roaring back just fine. Hedge fund billionaires tout their portfolio holdings on national television. Then they sell their positions as investors push prices higher.
The Federal Reserve creates Enron-style Special Purpose Entities in order to buy corporate bonds and ETFs. And, the U.S. Treasury prints money to hand out to billion-dollar corporations to ease the burden of meeting their expenses.
There’s no real price discovery anymore. Business fundamentals don’t matter.
Technical patterns aren’t all that reliable anymore either. It doesn’t matter how good or bad a chart looks. It can change overnight. Maybe the government will ban short selling. Or maybe the Fed will plunk a few hundred billion dollars into the market to prop it up.
Or… maybe it won’t.
Right now, the stock market is a giant guessing game. Neither fundamental nor technical analysis provides much of an edge anymore. And, investors have lost their faith.
It’s like finding your spouse in bed with your priest. Two deep-rooted beliefs are shattered at once.
It’s during times like this where investors will do well to remember the words of Keanu Reeves in the movie The Replacements…
“Pain heals. Glory lasts forever. Chicks dig scars.”
Pain heals. Stocks are headed for a rough patch. The financial markets are going to get ugly over the next several months. Most financial assets are going to lose value. But, we’ve been through this before. We survived the stock market crash of 1987. We endured the Asian currency crisis in the late 1990s. We suffered through the internet meltdown in 2001. And, we made it through the Great Financial Crisis of 2008. The next several months may be worse than all of those periods. But, we’ll get through it.
Glory lasts forever. The ability to keep one’s head while all others are losing theirs creates greatness. Warren Buffett earned his fortune by making smart decisions in bad markets. And, if the market behaves as I expect it to over the next year or so, even the small investors will have a chance to make decisions that can make them rich.
Chicks dig scars. The battle-tested warrior gets more respect than the rookie just entering boot camp. Traders who’ve been in the trenches for decades will have an edge over hedge fund managers just out of business school. Experience is valuable.
It’s okay if your faith in the market has been shaken lately. Mine has too. But, the free market and capitalism are much stronger and longer-lasting than the shenanigans in Washington and on Wall Street.
No matter what happens in the financial markets in the coming months, real price discovery will return. And, investors will have a chance to take advantage of it – if they have the courage to do so.
After all… chicks dig scars.
Best regards and good trading,
P.S. When the markets have never felt more rigged, it’s imperative to have an edge over the countless other market participants.
That’s exactly why I created my Crisis Trading Blueprint. It’s designed specifically to teach you how to trade successfully in a crisis market. You’ll be able to access all my most important strategies, technical indicators, chart patterns – all with specific, guiding examples – so you can navigate the markets with an upper hand over other traders.
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In today’s mailbag, Mike B. thanks Jeff for his guidance while Mike D. shares his trade profits…
Jeff, the Jeff Clark Alliance service is great. I signed up for the lifetime Protégé Program subscription. I’m looking forward to having great success with your guidance. Thanks.
– Mike B.
I made 25% on your recent call recommendation!
– Mike D.
And Pam shares her opinion on Monday’s Market Minute…
Jeff, thank you so much. I always love reading your thoughts and helpful advice.
Let’s hope Bitcoin goes up like Teeka thinks it will, and let’s hope for a positive outcome. You’re there for us with guidance as this money printing scheme is fearful. If you or I printed money we would be in jail.
America has lost its values, but I’m retired, and my generation was blessed with the rise of America. While in college we were the envy of the world. Our American school system was called the best in the world! That’s no longer true and we need your guidance.
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at [email protected].