Bear Markets Bonanza

History does repeat itself, but it almost never duplicates itself. You might be wonder where this statement leads you to, rite? Understand the truth to this statement leads us to have: An Open Mind!

Key challenge this year is to not to get caught in herd-like behaviour. It never makes you lasting money. To the contrary, it is and will always be – the single biggest and most common mistake investors make, and it costs you loads of money and missed opportunities. The key to understanding it, in my humble opinion, is what the healing process is.

We have the most oversold conditions ever in almost major stock indices and we have most historic oversold conditions on record in almost all natural resources. Any nearly everyone agrees, including me, that there are more losses to come, but the markets are never straightforward with us. Now, it seems a common catch-phrase to hear the saying ‘It is going to get worse before it gets better’ everywhere in almost every financial newsletter on the planet today. That’s how human behaviour works and deeply oversold conditions can lead to massive, surprising, out-of-the blue rallies.

In 1974/75 recession, a 45% collapse in the Dow in just two years’ time, the Dow turned back up in early 1975, rallying more than 75% by September 1976 even while slow economic growth lasted for another two years.

In 1990/92 recession, stocks once again hammered largely due to S&L crisis and the Dow soaring 40% from 2,365 to 3,310 in just over two years – even though the underlying fundamental economic indicators did not turn back up until late 1996.

The apocalyptic warnings were coming out everywhere in 1997/98 Russian and Asian financial crisis. Yet, just one short year later, by 1999, stocks were at or reaching new record highs!

Even if we go back as far back as the 1929 Great Stock Market crash, it was followed by a massive 48% rally between the Dow’s November 1929 low and April 1930, when stocks turned lower again.

Investors have been flocking to US Treasury bonds, but I am seeing another bubble to be created, and without one shred of doubt in my mind, the US Treasury is the most dangerous and riskiest market on the planet right now and will send giant shock waves throughout the world and that capital has to go somewhere, rite?

As the currency devaluation process taking place, I see that natural resources to have intrinsic value. The action of the US dollar is absolutely pathetic under these circumstances.