August 2022
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August 18, 2022

Financials Matter

"It's Not Just About Finance"

Never Short a Dull Market

 

You don’t need to be a rocket scientist to realize that 2020, The Year of Chaos has NOT been a dull market.

However, “The Market” is made up of numerous markets – oil market, tech market, international market, currencies, commodities, and emerging markets, etc. – and most investors tend to lump them all together.

That’s your first mistake.

The second mistake is failing to recognize that Everything is Connected…Everything.

The third mistake is believing that Turbulent Times – like what we’re witnessing today – hurt all markets.

Nothing could be further from the truth.

Some of the biggest fortunes in history are made when the world is in turmoil.

At the same time, investors become billionaires by shorting certain markets.

Cue up Doctor Evil – George Soros – who in 1992 shorted the British pound and reportedly made a profit of $1 billion. (Back then, $1 Billion was a serious amount of money).

He became known as the man who broke the Bank of England.

At the time, the currency market was in turmoil.  Dr. Evil recognized it, bet heavily against it and won bigly.

Shorting (betting against) a volatile market can yield huge rewards.  However, shorting a dull market can cost you a fortune.

Cue up the precious metals market in 2020.

Gold and silver mining stocks have quietly flown under the radar in 2020 with gold hitting all-time highs in July.

Since then, precious metals have consolidated and come down slightly in prices.  But unlike the past decade – where they would fall 20, 30 or even 40 percent from Short Sellers – mining stocks aren’t tanking.  In fact, they appear dull.

Unlike the past, the short sellers know not to short a dull market.

Why?

The strategy backfires because they know that gold moves up when there is a Loss of Confidence in Government.

This trend will most likely continue to get worse.

The bottom line is, the price of gold (Cough! mining stocks, Cough!) can very easily skyrocket over the next 24 months.

In our September issue of “…In Plain English,” we list 10 of our favorite gold mining stocks for you to consider…especially as the world gets crazier.

Check them out:

 

 

 

 

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