In approximately a dozen articles (that I have written since January) I have guided members to increase their position in gold and silver to at least 10% of your net worth. For those who listened gold hit a 9 year high last week and silver is showing strength and is in a break out pattern to go higher.
I want to remind members that during the January club meeting ‘Economic Outlook for 2020’ I discussed (for 90 minutes – which is on video) that, although not likely, a Recession was possible and one of the 3 major reasons I discussed was a possible pandemic – long before it was being reported in the news.
In addition, in April I told members when the oil futures market went ‘negative’ to load up on oil ETFs and then sell when it hit $40 a barrel.
For those who listened and followed (and some of you did it) – is very likely you saw a doubling in value of your investments.
Now what is my guidance now:
- Silver and gold have had a strong run up. We may see a consolidation period – but if the US dollar continues to weaken then we will see strong upward strength in gold and silver. So for those of you at 10% of your portfolio there is no need to add to your position. For those of you that still don’t own gold and silver in your portfolio – then you require it now as a hedge.
- There continues to be a complete disconnect between Wall Street and Main Street. The stock market continues to ignore bleak economic headlines. In large part the stock market strength is due to Central Bank involvement in buying junk bonds, asset backed securities, muni bonds etc. to ensure the market maintains liquidity. In addition, the Fed has lowered interest rates to near zero. The ever-present risk of the virus hangs over the markets until a vaccine is created. To make things even more uncertain – we are in an election year. The Nasdaq keeps hitting new highs and many stocks are trading at 28x next year’s projected earnings. That is outrageous and I say unless you are in gold and silver take your profits and run for the hills.
THIS CRISIS WILL PLAY OUT TO CREATE BUYING OPPORTUNITIES.
- In 2010 residential cap rates were in double digits in Las Vegas. We bought 68 condos in ‘Desert Shores’ and had 3 years of cash flow then sold it for a strong profit. Now I believe we will see a great opportunity in commercial real estate as landlords will be unable to meet their obligations due to the large number of tenants unable or unwilling to pay rent. This will create a glut of inventory for sale.
- Do not feel compelled to put your cash to work. Hoarding cash remains a great strategy. The consequences of what is happening right now will play out several months down the road and the make sure you have cash on hand to take advantage of opportunities that arise.
On the political front I want to focus on one subject: The ‘Black Lives Matter’ Movement. I will simply say that there is much about it I do not agree with and it seems to have neither a clear message or leadership. Sometimes it is easy to be appalled with the messaging when you witness a recent protest rally in San Francisco called for the defunding of police with a request for a police presence -for protection during the protest march.
Public figures like Roger Goodell (NFL Commission) sicken me with their dramatic shift of position lacking any form or sincerity. Companies are stepping into the ‘fray’ in many cases for political points only and to protect their profits – instead of anything substantive. A teacher was fired in Chicago 2 weeks ago for saying “All Lives Matter”. A TV host was also fired for saying the same thing. Well I for one will say that “All Lives Matter” and in no way does that mean that Black Lives Matter less it means exactly I say it – literally. For those who say “All Lives Matter” cannot exist until “Black Lives Matter”, I say that every person I interact with believes African Americans are in all ways equal to all other persons. In fact, there is a very small subset of racists individuals that don’t believe this but they are generally uneducated and a very tiny minority.
I disagree with the removal of many of our historic status and national monuments. It seems that almost anything these days can now be attacked in some way. None of our heroes were perfect and in the end if we keep this up – we will have no historic monuments left.
One popular Fox news Host now has 60 million followers – as he takes a strong stance against the BLM Movement. This tells me there is a strong silent majority of people that are getting sick of what is happening and looking for someone to state the message for them. It could be this backlash in fact that could win the election for Trump again who looks like the odds on favorite – in the next election.
I have gone out to witness demonstrations where too often it appears to be constituted of very young people with little life experience looking for something to do. In fact, many of the protestors I have seen in Vegas appear to be teenagers and many of them are white.
But I will focus on one area I hope the BLM can help to reform.
Members have heard me speak extensively about the abuses of the US Judicial System. More than 96% of all those charged with a Federal Crime take a plea bargain. The reason is – even if they are innocent only 1.4 percent of all Federal case are won by a defendant. This system historically has shown overzealous and corrupt prosecutors as well as Federally appointed Judges that never want to rock the boat. This is a system we have to change.
Marcus Mumford was a past speaker at the ICOA. He is an American Hero and won 3x in a row Federal Cases representing defendants that were indicted by the Federal Gov’t. Statistically the odds of this happening are less than 1 in one million. Upon his 3rd victory the Federal Gov’t worked to have Marcus disbarred from practicing law and, with an inability to make a livelihood, it had a profound negative effect on him. 6 months ago Marcus had a heart attack and died. I for one think stress killed him and this is the game the Feds play.
With an unlimited budget to prosecute and destroy people’s lives even if they are innocent there MUST be changes in the judicial process to benefit all races and that is one major impact I hope the BLM will have.