Never forget that markets are cyclical… The secret to surviving the coming bear market… A bitcoin call you won’t hear in the mainstream press… In the mailbag: “That’s not freedom… that’s subservience…”
It’s from world-renowned crypto investing expert Teeka Tiwari.
And it’s the exact opposite of the bearish forecasts you’ll see in The Wall Street Journal and on Bloomberg.
In fact, it may shock you just how differently Teeka sees what’s going on in the crypto market from mainstream financial reporters.
We’ll get to that in a moment…
If you haven’t already, it’s something we hope you take on board as of today.
We’re not exaggerating when we say it’s something that could save you hundreds of thousands… if not hundreds of millions… of dollars.
The best time to prepare for a bear market is before it does the worst of the damage… not after all hell breaks loose.
And although U.S. stocks are officially still in a bull market, we’ve seen nothing but weakness since the start of October.
The Dow ended the week down 4%. The S&P 500 fell 3.6%.
And again, the Nasdaq took the biggest tumble. The tech-heavy index plunged 4.4% last week.
Big Tech stocks are headed south, too.
Take the so-called FAANG stocks – Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX), and Google parent Alphabet (GOOG).
Over the nine-year bull market on Wall Street, these five Big Tech stocks accounted for about 10% of the gains of the 500 stocks that make up the S&P 500.
But the FAANGs are now down between 19% and 39% from their highs for the year.
And as we’ve been telling you, when the market leaders – or “generals” – start to lead the retreat, it’s a major signal the market is in a topping-out process.
That’s the big call from Legacy Research’s Jason Bodner.
Jason worked for nearly 20 years on Wall Street and in London, executing trades for some of the world’s wealthiest investors.
And based on his time in the trenches… and his experience with previous market cycles… he’s expecting a speculative frenzy before the start of the next bear market.
For instance, that’s what we saw at the top of the 1990s dot-com boom. The market topped when the maximum number of people became wildly bullish. Something similar happened before the top in 1929.
As he told us back in September, Jason says we’ll see investors “step on their mothers’ necks” to own stocks right before the next bear market hits. And right now, we’re just not there.
But whether there’s a blow-off top first or not, the important thing to remember is that a bear market is coming. That’s just the way markets work – in cycles.
And as Legacy Research co-founders Doug Casey and Bill Bonner have been warning, the bigger the gains on the way up… the bigger the losses will be on the way down.
So now is the time to take a look through your portfolio and make sure you’ve got the kind of portfolio that will weather a bear market.
Own cash. Own gold. And keep your stock market exposure at a level that doesn’t keep you awake at night.
The Bloomberg Galaxy Crypto Index (BGCI) tracks the performance of nine of the largest cryptos by market value.
It plunged 24% last week.
And the world’s first and most valuable cryptocurrency, bitcoin, finished the week down 22.5%.
There’s no way to sugarcoat it. These are gut-wrenching losses.
At $3,919 per coin at writing, bitcoin is down 80% from its record high of $19,783 set last December.
That’s more than the 78% peak-to-trough fall – or “drawdown” – the Nasdaq went through after the dot-com bubble burst in 2000.
It’s also worse than the last big drawdown bitcoin investors experienced.
That was between April and July 2013, when bitcoin fell 76% from $266 to $63.
Here’s what Teeka told readers of our Palm Beach Daily e-letter earlier today…
The selling isn’t over yet, so be emotionally prepared for lower prices.
When you’re in an environment where people are panicking, liquidity is low, and fear is high… prices get hammered. And that will continue to happen until the selling is done.
But that doesn’t mean the gains are over for good.
Just as Apple and Amazon weren’t less valuable companies when their shares went through 80% and 94% drawdowns during the dot-com crash, bitcoin isn’t less valuable as a private, decentralized, unhackable payments network today when it’s in an 80% drawdown.
In August 2017, Teeka said we could see bitcoin at $40,000 by the end of 2018.
He admits he was wrong on the timing. Unless there’s a miracle turnaround over the next month or so, we’re not going to see bitcoin that high versus the dollar by the end of this year.
But Teeka is sticking to his guns that bitcoin will hit the $40,000 mark.
Although investor sentiment is overwhelmingly bearish on cryptos right now, the fundamentals haven’t changed. Teeka…
The market is so jaded right now that it’s taking this approach of, “We don’t believe anything that you say. We want to see proof before we start getting excited about prices again.”
The good news is that proof’s not far away.
ICE [the Intercontinental Exchange, the owner of the New York Stock Exchange] says its Bakkt exchange will launch in January 2019. We’ve got nine ETFs coming in front of the Securities and Exchange Commission. We expect a decision on at least one of them in the first quarter of 2019.
As with any long-term investment, these knowable fundamentals are what you should focus on with bitcoin, not the unknowable of where investor sentiment is at any one point in time. Teeka…
The knowable is that if you’ve got a product that goes from a small market that is difficult to buy to a big market that is easy to buy, more demand will be created.
And if the product has only a finite number – as is the case with bitcoin – then higher prices have to come from that demand.
If you own bitcoin, watch its fundamentals. Do your best to ignore the stomach-churning plunges. If Teeka is right, you’ll be rewarded in the long run…
Last week, readers Michael M. and Dave P. argued our personal freedoms are at stake in the feds’ prohibition of cannabis. As Michael put it:
Just let people do what they want. If that’s self-destruction, that’s THEIR CHOICE.
And it got your fellow readers talking (catch up here). Today, the debate continues…
I agree with Michael and Dave as long they are hurting only themselves. When their choices affect others, we are going to choose for them.
– Maria W.
The government tells us we’re free. Free to do what? Toe the government line? That’s not freedom… that’s subservience.
– Bill S.
I am old enough to have been around when Nixon declared marijuana to be a controlled substance, despite his own study saying that it was less harmful than cigarettes or liquor. Remember he was also responsible for taking us off the gold standard. I believe he was probably the most destructive president, up to that time, in our history.
The problem with marijuana is that by classifying it as a Schedule 1 substance and including it with other hardcore drugs like heroin, you will always have people that will try marijuana, then say what’s so bad about that, then decide that other Schedule 1 drugs probably won’t be that bad, either. In other words, yes, it’s a gateway drug but only because one man decided he didn’t want it to be legal, now look where we are.
– Tony F.
The argument that the government should maintain a “hands off” interference with personal use is specious, if not dangerous. The “correct” policy in my mind is similar to that following alcoholic prohibition: that is, the government should control production of these substances in order to ensure that lethal products do not enter the market place.
It works for alcohol. Why not other such products? There are still abusers of alcohol – sadly but assuredly, that’s the price for personal freedom – but most people are, at worst, only moderate users. Selective government control and personal freedom can work in tandem; they are not mutually exclusive propositions.
– Wallace C.
Is pot like booze? Can personal freedom and more government control really work in tandem? Write us at [email protected].
November 26, 2018
P.S. Don’t forget to join Bill Bonner, Doug Casey, and Mark Ford for a one-night-only broadcast this Wednesday at 8 p.m. ET. You’ll hear these three self-made millionaires reveal how they made their fortunes… and what they’re doing with their money now.
This is something that’s never happened before – and may never happen again – so don’t miss out. As a Daily Cut reader, you can join this candid conversation for free. Just go here to get your personal viewing instructions.