“A False Sense of Security” – Jim Rickards

As I speak with prospects, clients, and participate in chats and conversation, I find that people are having three main issues indirectly related to their financial well-being:

1) Work and family keeps them busy so they have difficulty keeping up with information that can help them.
2) Most don’t have a good source of information: main stream media has become more and more slanted to the extremes and doesn’t “report the events”, but promotes an agenda.
3) Many believe the information presented, which is largely inaccurate, can be misleading, and have become complacent thinking “everything’s fine”.

Here are quotes and links to three stories that I pulled from my RSS feeds today:

[1] Jim Rickards, on SilverDoctors.com (linked below):
“…late August 2015 in the aftermath of the Chinese shock devaluation of the yuan when U.S. stocks also fell 11% in two weeks. Investors were suddenly frightened and there was nowhere to hide from the storm.”

[2] Max Cherney on MarketWatch.com:
“The stock (Facebook) closed down 19% Thursday to $176.26, which means that investors erased the entirety of the company’s 2018 gains…170 million shares had changed hands. Facebook’s Thursday was the ugliest single-session decline since the company went public in 2012.”

[3] Adem Tumerkan on Palisade-Research.com (via ZeroHedge):
“The problem going on in the markets is there’s growing complacency even though fundamentals don’t support any further upside. Otherwise put – investors are feeling too comfortable and expect the market to trend higher, even though the bottom’s slowly falling out from underneath.”

Each article and viewpoint touch on the “stability” of the markets and what some people confuse with our economy. The markets are not the economy, the markets are “markets” and are driven (fundamentally) by investor sentiment and comfort levels that trigger buying and selling; at least back when markets were driven by human beings.

In an age where trading algorithms are programed to trade billions in financial energy on fractions of a percentage of market change to net millions in daily gains, people seem to think that markets are still markets; when they aren’t. People aren’t trading value for value anymore, they are riding the man-made waves in the Wall Street and Investment Banking wave pool.

It’s not that you can’t benefit from those waves, but the Wall Street crowd invites investors into the room (along with their collective billions in life-savings, guide them onto the carpet over the trap door… and you can guess what comes next.

Don’t take my word for it; read the headlines, dig just a little into the stories and you’ll see a pattern.

My RSS feed on topics that I track:

General News:
https://davidpandone.com/publications/headlines-from-off-the-beaten-path/
free membership content:
https://davidpandone.com/publications/in-credible-financial-news/
https://davidpandone.com/publications/other-financial-news/

[1] https://www.silverdoctors.com/headlines/world-news/jim-rickards-investors-have-fallen-into-a-false-sense-of-security/
[2] https://www.marketwatch.com/story/facebook-stock-crushed-after-revenue-user-growth-miss-2018-07-25
[3] https://www.zerohedge.com/news/2018-08-01/markets-complacent-world-trade-drops-risk-earnings-recession-grows

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