Puplava promises a Storm Update new chapter
it will focus on Ten-Sigma Events, which in his opinion will be the catalyst for the next panic downleg phase in the general stock market
his daily message got personal today
I sent this quoted piece to my old college friend in Vermont, who in his misguided naivete has stayed the course with his large but shrinking 401k account
in early July, I almost convinced him to exit stocks
but the July-August rally told him the worst was over
a couple weeks ago, he said his account was lower than when I first warned him
now I can only assume he is encouraged by this "believer" rally
he wrote a quick note last week mentioning that his mother was the smartest of us all, having large passbook savings accounts
he wondered with more concern about the fate of JPMorgan
here is a nice personal story by Puplava, typical of today
A Common Story
A client of mine is concerned about his golf partner. He tried to get him out of stocks. Last December I saw that individual and told him to liquidate most of his positions since I felt his portfolio was vulnerable. He owned a lot of telecomms, techs, and financial stocks, the kind of stocks that had done well in the later stages of the bull market. When I saw this individual his portfolio was well into seven figures. His friend recently referred him back to me. My message this time was the same. His portfolio hadn’t changed and had fallen another 30%. He appeared distressed. This was his retirement portfolio and it was what he lived on after his social security. This time he was more willing because he had brought his son along, the heir to the fortune who was even more distressed. Plans were made to liquidate. Unfortunately a rally began recently in the stock market and my client’s friend was of the opinion that the market had bottomed. He was back to his bull market beliefs because that is what had made him a fortune. I truly believe I will see him again under more unfortunate circumstances.
This story is one I see repeated in conversations with friends and acquaintances who still believe that the bull market never ended. I believe this divergence is what explains the vast majority of investors still holding on to their fund holdings throughout the entire first phase of this bear market. The pros and the insiders are out or short, or are in alternative asset classes. What will initiate the second phase, or ‘panic selling’ phase of the market will be a ten-sigma event, the topic of an upcoming Storm Update. One only needs to pick up a copy of a domestic or foreign newspaper to find a long list of likely candidates. As far as investors ignoring the bad news and believing in a new bull market, I believe it is just the opposite. It is a sign of complacency where new bear markets spring forth.
/ jim |
