Stock Market Wealth

You BET There’s INFLATION!

Jul 29, 2018 | Stock Market Wealth

*** In-Depth Update: Today’s letter concerns every American, every investor, and any person looking to create long-standing wealth. Before reading it and thinking about how it relates to your situation and circumstances, I want to make sure that (1) you are aware that Pure Global Cannabis (TSX-V: PURE & US: PRCNF) is one of the biggest gainers of today’s session, (2) it traded at its all-time high today of CAD$0.38, and (3) that U.S. investors can now place trades with most brokers using the ticker (PRCNF). Lastly, (4), today’s rally is thanks to a fundamental reason, the appointment of a global supply chain manager, who has previous experience with Walmart! The FDA has recently approved CBD-based therapy drugs for the first time. This will open the door for countless other applications. They also approved its use for treating children’s diseases, which will revolutionize the attitudes of adults towards it. Cannabis investments could well be 2018’s highest-conviction trade, so our efforts are now split among natural resources, blockchain, and cannabis, with the last two taking high priority. ***

This past week, I’ve been fortunate to explore Alaska. This young terrain, relatively speaking, is alive and vibrant. Between over 100,000 receding glaciers and tons of active volcanoes and teeming wildlife, there’s so much to learn from nature about our conduct in family, society, business, and investments.

The giant glaciers are one of the best examples of where I see the U.S. economy right now.

One snowflake is nature’s most fragile and beautiful creation. But, over centuries, tiny snowflakes compound to be a massive glacier.

Our everyday decisions, though they seem meaningless when made, compound to become the outcomes of our lives over decades. For Americans, that tiny decision they have made to spend and not to save has become a glacier of epic proportions. Its snowflakes are made up of credit card obligations, mortgages, car loans, student debt, and the national debt.

Our cruise ship stood just hundreds of feet away from the famous Glacier Bay National Reserve’s most accessible sheet of ice. It looked magnificent, just as America’s wealth looks to the rest of the world. Just like America’s most important cities and businesses project power, so did this glacier. Yet, under the surface, water moves the glacier, eroding the glue, which binds it together, until a block of ancient snow, calves into the ocean.

Some blocks are bigger than others, but looking at this massive glacier, the next one is unpredictable concerning its timing and location. It can happen at any time and anywhere across the length of it.

When an entire glacier plummets at once, a tsunami, the scope of which we haven’t experienced, is triggered. Alaska is famous for creating the world’s highest waves in recorded history – over 1.720 feet high. It destroyed a forest full of trees as if they were toothpicks.

Alaska’s beauty is captivating just like stock market returns provoke our greed to earn more and captivates us, but just like the early tourist boats found out 100 years ago, when they first drew near the glaciers, the real threat lies with the underwater icebergs, which are hidden from the eye.

Once they break free from the ocean bed, they shoot up like a coiled spring, capsizing massive boats, sending people overboard to their chilled deaths.

These icebergs are as dangerous as “Black Swan” events, just like the dark waters below the ice are dangerous to us, since they provoke the ensuing tsunamis, without early warnings.

This is the threat of double-digit USD inflation that we are cautious of.

Sure, this doesn’t happen often, so many tourists have to return for a second or third time to Alaska to experience such a momentous occurrence like a “shooting”, but they better come prepared.

This is precisely why I do not have millions of dollars of my own money in gold – runaway inflation isn’t a common economic phenomenon, but it does exist, so I make sure I have ENOUGH!

Secondly, I own the most reliable cryptocurrencies because they serve the same purpose of diversification outside the banking system and the government debt pile, only in digital form.

Right now, 40 of America’s biggest businesses, components of the incredibly successful S&P 500 index, which every investor should invest in, when the market retreats and offers better valuations, are reporting in the earnings calls that tariffs impact their costs, which will be passed on to the consumer.

The early warning signs have become apparent to those who are paying attention.

As the broad indices, especially the NASDAQ, continue to rally in spite of the apparent problems, you will be faced with internal conflicts, as you’ll see others around you making money with expensive stocks becoming more expensive.

Remember, a value investor invests in a business, when it offers a bargain, not when it rallies, due to investor frenzy. 

Alaska isn’t famous for its rainforests, but outside of the Brazilian Amazon, the planet’s second biggest one is located here. 300 days of annual rain is a reality, so sunlight is rare and appreciated.

This is precisely how we should treat a gold stocks bull market. Most of the time, these stocks experience downward pressure, so with the earliest indication of sunlight, we need to be trigger-ready.

For two years, we haven’t seen the sun for precious metals junior mining stocks, but of course, it’s there, hiding behind the clouds. 

Even the mighty sun, just like the best management teams, cannot battle rain clouds or natural market cycles, no matter how talented, but they can dazzle us when their time comes.

CANNABIS CRITICAL UPDATE

The FDA has recently approved CBD-based therapy drugs for the first time. This will open the door for countless other applications.

They also approved its use for treating children’s diseases, which will revolutionize the attitudes of adults towards it.

Cannabis investments could well be 2018’s highest-conviction trade, so our efforts are now split among natural resources, blockchain, and cannabis, with the last two taking high priority.

Best Regards,

Lior Gantz
President, WealthResearchGroup.com

Legal Notice: This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.

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