Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

A Funny Thing Happened on the Way to New Stock Market Highs

Stock-Markets / Stock Markets 2013 Sep 27, 2013 - 02:29 PM GMT

By: Profit_Confidential


Michael Lombardi writes: The financial crisis of 2008 was the biggest panic America had witnessed since the Great Depression. Dubbed the “Great Recession,” its after-effects linger. In fact, this is the worst post-bust recovery on record.
Today, for investors, especially stock market investors, there are two camps: those who believe we are in recovery, and those (like me) who believe something is wrong with this recovery…it doesn’t feel or smell right.

America, I believe, was forever changed following the financial crisis. There are more people working into their retirement years today than ever before because they can’t make it without working. There are more people on food stamp programs and government handouts than ever before.

As I wrote yesterday, the housing recovery isn’t real. We don’t have first-time home buyers coming in and buying homes to live in (like they should). Instead, large financial institutions have taken up the inventory of foreclosed homes to rent them out for a profit.

And most of the jobs that have been created since the financial crisis have been in the low-paying service sector—in retail jobs and restaurant jobs. Our kids are graduating from college (with plenty of debt) and are unable to find the job they trained for because they are competing against older middle managers for these jobs.

Our Federal Reserve, which I believe could be the only central bank in the world not owned by the government of the country it operates in, says our economic problems can be corrected by printing lots of extra paper money. That’s what the media is having us believe, too.

The real story is that money printing has only helped Wall Street and the big banks. The stock market is higher today, not because companies are making bigger profits, but because all that new money the Fed is creating is making its way back into the stock market. Artificially low interest rates are enabling big corporations to borrow money to buy back their own stock, right in the open stock market, giving us the impression that per-share earnings are increasing at a respectable rate.

With the Fed buying mortgage-backed securities, the big banks are getting rid of their junk loans in exchange for cash. (Great gig if you can get it!) But instead of taking that money and making loan requirements easier for would-be home buyers and business people, big banks are using the money to either buy back their own stock or to invest for their own good. This is what I believe is really happening here with the stock market, and this is why the rich are getting richer in this country and the poor are getting poorer.

But a funny thing happened on the way to higher stock market prices—the small guy missed out. According to a Gallup survey done in April of this year, only half of Americans have invested in individual stocks, equity funds, self-directed 401(k)s, or IRAs. That’s down a whopping 25% since mid-2002! (Source: “Why Individual Investors are Fleeing Stocks,” Wall Street Journal, July 10, 2013.)

Small investors never really came back to the stock market after the tech crash of 2000; they were further scared off by the housing bust of 2007 and the financial crisis of 2008. Most small investors have missed the run-up in the stock market since 2009.

As for me, I’ve been recommending caution with the stock market for the majority of 2013. How can I tell my readership that it’s even remotely okay to invest in the stock market after what you’ve just read above? Sure, my call may not have been on the money so far this year. But at what point does the entire Ponzi scheme of the Fed printing money and giving it to the big banks and the government (to pay its bills) end? No one knows for sure, but all good things do come to an end.

The tech stock market rally of 1998-1999 ended badly. The housing boom of 2005-2006 ended badly. The stock market rally of 2007 ended badly. Why would the current stock market boom (stock prices are up 138% since 2009 without a major correction yet) be any different in its ending?

Through my career, I have been successful at buying low and selling high. I don’t consider buying stocks today as “buying low.” But there is another investment I do consider “kicked-in-the-gut” and outright depressed. And if you have the foresight and guts, that’s the kind of investment you should get into while its price is low. I’ll give you a hint: I write about it in these pages often, it’s yellow, and you can’t just print more of it!

Source -

Michael Lombardi, MBA for Profit Confidential

We publish Profit Confidential daily for our Lombardi Financial customers because we believe many of those reporting today’s financial news simply don’t know what they are telling you! Reporters are trained to tell you the news—not what it can mean for you! What you read in the popular news services, be it the daily newspapers, on the internet or TV, is the news from a “reporter’s opinion.” And there’s the big difference.

With Profit Confidential you are receiving the news with the opinions, commentaries and interpretations of seasoned financial analysts and economists. We analyze the actions of the stock market, precious metals, interest rates, real estate and other investments so we can tell you what we believe today’s financial news will mean for you tomorrow!

© 2013 Copyright Profit Confidential - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in