Our resident technology expert, Jeff Brown, came through with an answer that will scare the pants off some of you…
Reader question: Where do you think the push for driverless and electric vehicles is coming from? It doesn’t seem to be consumer driven.
Why would private companies invest a seemingly unproportioned amount of money in a technology that might not be accepted by consumers?
Is this where legislation comes in? Is the plan maybe to first push driverless cars and then forbid people to drive themselves? Despite real advantages, may this also be another attempt to reduce our possessions and increase control over our lives?
– Ralf W. (Legacy Research member)
Jeff Brown’s answer: The main advantage of EVs is that they are less complex. This means they break down less often and are much cheaper to maintain.
This is attractive to automobile manufacturers (because EVs are actually simpler to manufacture) and to consumers (because these cars are easier and less costly to maintain).
But what if we step back even further and think even bigger-picture?
The next evolution of EVs is self-driving cars.
And there is most certainly an Orwellian motivation for some corporations – not to mention governments – to migrate to this technology. Here’s why… Self-driving cars must be connected to a network at all times. For example, most cars today have the equivalent of a cell phone hidden inside. The location of the car is known at all times.
This is primarily used for emergency services… or at least that’s how it is marketed.
The government will know the exact location of every self-driving car at all times. With the right authority, a self-driving car could be re-routed to a government’s choice of location at any time.
For example, what if someone suspected of a crime was trying to “drive” out of state? The local government could simply re-route the car to the nearest police station.
It’ll be a brave new world, that’s for sure.
Gold is another popular topic… especially after Strategic Investor editor E.B. Tucker told Daily Cut readers “we’re about due for the next [gold rally] and it’s likely to be the biggest yet.”
So when we saw more reader questions like the ones below, we reached out to master trader and Delta Report editor Jeff Clark for another expert’s take on the coming bull market in gold…
Reader question: How about an update on your view of the gold market?
– David F. (Legacy Research member)
Reader question: Could you please share your thoughts on gold and gold stocks?
– Mike P. (Legacy Research member)
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Jeff Clark’s answer: Gold and gold stocks are acting well. And that’s probably going to continue for a while.
As the U.S. stock market started to sell off in October – and it appears to me the S&P 500 has entered a prolonged downtrend – gold made a bullish move. It now looks as though the gold sector has entered a prolonged uptrend.
Usually, the chart action I’m seeing on the VanEck Vectors Gold Miners ETF (GDX) right now provides an excellent opportunity to buy a position in anticipation of a rally. [GDX tracks the price of gold stocks.] I won’t get too deep into the technical details, but the setup is starting to look good.
Still, for right now, the technical indicators aren’t where I’d like them to be. The 9-day exponential moving average (EMA) on GDX is a bit too far above the 50-day moving average (MA) for me to be willing to add more gold stock exposure.
[Moving averages are trend lines that filter out large spikes and drops in a stock’s price. One buy signal Jeff watches for is a “bullish crossover” of the 9-day EMA and 50-day ME.]
Instead, I’d look to buy GDX on a pullback towards its 50-day MA – that’s about $19.85 right now. I’d also look to buy if GDX can just chop around for a couple of weeks and give the 50-day MA enough time to rally up towards $21 – the price of the stock as I type.
If you spend any time reading Legacy cofounder Doug Casey… or his go-to commodities investing expert, Dave Forest… you’ll know they’re convinced a new bull run for commodities is on the horizon.
Although most of their research focuses on the better-known commodities – such as liquified natural gas, uranium, and nickel – one curious reader wants to know about two obscure elements.
And Dave, who heads up our International Speculator advisory, is here to shed some light on the situation…
Reader question: With interest I’ve read your articles where you state that basically all commodities are going to enter into a bull market.
What about so called “rare earth elements” like niobium and tantalum? Are you also bullish for these commodities?
– Stefano D.
Dave’s answer: Generally, most commodities do go up in tandem during a bull market. But rare earth elements are a niche part of the commodities world. And niche commodities markets can be more subject to local forces of supply and demand.
This is especially true with rare earth elements. Eighty percent of the world’s supply comes from China – a notoriously opaque market.
In the case of niobium, almost 90% of the world’s production comes from a single troubled nation: Brazil. (Canada is the only other significant supplying nation.) Tantalum is a little more diversified. But still, nearly 60% of global supply comes from just two embattled nations – Democratic Republic of the Congo and Rwanda.
In short, I believe that most, or even all, commodities will ride the wave higher in a bull market. But given the potential local complications for niche markets such as niobium and tantalum, I prefer the larger-market metals – such as gold, nickel, and platinum – as a way to play the coming boom.
Finally… The crypto market has lost 74% of its value over the past 12 months – what some have called the “Crypto Winter.” And many readers are pondering the same question: Is now a good time to buy?
Marco Wutzer, editor of our Disruptive Profits advisory, has been immersed in digital currencies since the 1990s… long before the bitcoin white paper was published in 2009. So he’s seen plenty of vicious downturns in the crypto market.
Here are his thoughts on whether now is a good time to buy…
Marco’s answer: Bear markets are the source of your biggest future profits. And we have now entered the “capitulation” phase in the crypto market. People are throwing in the towel, in other words. This is the best time to buy.
Valuations during the capitulation phase sometimes reach lows that can surprise even seasoned veterans like me. But when it comes to the crypto market, I’m not worried. These kinds of drawdowns are par for the course.
Take 2013. Between April and July that year, bitcoin went from $266 to $63 – a 76% plunge.
But that wasn’t the worst of it. Before that, bitcoin plunged 94% from September to October 2010. And it plunged 94% a second time from June to November 2011. And these are just some examples.
Despite those crashes, bitcoin is still up 5,337% from its 2013 low. So stick to your guns. Keep being a contrarian, a true speculator, and you’ll get very wealthy. Now is the time to build your crypto portfolio – not to panic sell.
Those are all the questions and answers for this week.
But before you go, make sure you’re all caught up on our 2019 Legacy Research Roundtable series.
In our Roundtables, we sit down with our analysts across Legacy Research to pin down the threats and opportunities they see in 2019 and beyond. Catch up here:
- Bill Bonner – “These Two Assets Will Protect You in a Stock Market Crash” and “What Went Wrong With the Internet”
- Jeff Clark – “Your ‘Trader’s Guide’ for the 2019 Bear Market”
- Jason Bodner – “What the Bears Are Missing About Today’s Market”
- E.B. Tucker – “Gold Is Primed to Explode… Here’s How to Play It”