“Buy stocks! It’s a great opportunity! They present great value.”
This is the non-stop mantra espoused on financial media. It’s simply astounding given that
1) Everyone with a modicum of sense knows stocks are in a bubble
2) Financial media viewership is plunging to multi-decade lows (you think they’d consider changing the content?)
Here are a few thoughts no one in the mainstream financial media seems to address.
First of all, corporate insiders are dumping shares at a pace not seen since 2000.
That’s correct. The folks who know more about their companies and future growth prospects than anyone in the world are unloading their shares as quickly as possible.
Investment legends are doing the same. Warren Buffett, perhaps the single biggest fan of stocks in the last 100 years is currently sitting on over $50 billion in cash. Buffett’s partner Charlie Munger recently commented that he has not bought a single stock in his personal portfolio in over two years.
Aside from Buffett and Munger, Carl Icahn, Stanley Druckenmiller and numerous other investment legends have warned of a potential market catastrophe. George Soros has even taken out a record size bet on the market collapsing.
Beyond the legends, institutional investors have been net sellers of stocks for most of 2014. The same goes for hedge funds. Do you think they’d be doing this if they thought stocks were offering a lot of opportunities and value today?
Market volume is collapsing to a dwindle and fewer and fewer companies area participating in the rally. Both of these are clear signs of a top forming. Nearly half of the stocks on the NASDAQ are down over 20% from their recent peaks.
Global growth is slowing down sharply. The only non-manipulated economic data point out of China (electricity consumption) shows GDP growth there is HALF of the official 7.5%.
In Europe, Italy is back in recession for the third time since 2008. Germany’s economy contracted in the second quarter of 2014 and will likely be in recession before the first quarter of 2015. France has registered zero growth for six months now. And the US is showing anemic growth if any.
So we have corporate insiders selling the farm, investment legends warning of a collapse, institutional investors selling stocks, and global growth slowing rapidly.
And now is the time to buy stocks?
Take note and prepare.
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Best Regards
Phoenix Capital Research