September has been HARD to STOMACH; the NASDAQ 100, S&P 500 and the Dow Jones Industrial Average have all been THROUGH THE WRINGER. A proper correction is in place, just like we’ve been WARNING ABOUT since the end of August.
What NO ONE expects is a deep recession; there are a number of CONFLICTING THEORIES as to what the recovery will look like, but nothing about entering a recession. The consensus is that the pandemic is highly-contagious, but not lethal; “with a vaccine coming and FEAR LEVELS subsiding, a recovery has begun,” is the general idea.
I’m currently in Tel Aviv, where the government has just approved a SECOND LOCKDOWN, more flexible than the one in March/April but still EXTREMELY PAINFUL for businesses (which are forced to shut down again), families (which are now tasked with parenting their children 24/7), the NATIONAL DEBT, which is reaching new highs not seen in decades, and for morale and spirit of individuals, who have seen the COVID-19 virus impact A TINY NUMBER of people compared with the comprehensive response the government is imposing — this is the REAL ISSUE here — the tradeoff between not overwhleiming hospitals (which are short of staff and on beds) and halting the lives of the millions, who will not impact statistics, since they’re not at risk.
I want you to understand that stocks have MUCH MORE appreciation ahead of them, as a whole. What you’ll see below is that households STILL OWN about a fifth of their wealth IN BONDS!
Gold is currently trading for JUST UNDER $2,000/ounce and Wall Street firms have issued PRICE TARGETS of $2,500 and $3,000. But I want to also present the INVERSE CASE, since it’s important to understand that (1) commodities don’t go up in a straight line and that (2) NO ONE knows what the future holds.