A rally in a bear market, or a correction in a bull?

by Dawn Pennington on January 22, 2016

It was another crazy week, but this one ended much better than the last two.

Today, the broader markets ended higher for a second day. More importantly oil, which has been weighing down stocks since the beginning of the year, also made its second-consecutive gain.

The positive trading action has helped to ease the broader markets out of the correction mode that they found themselves in earlier this week. The S&P 500 managed a 1.4% gain for the week. This puts it at down “just” 6.7% for the year.

Whether this is a correction in a bull market, or a rally in a bear market, remains to be seen. Either way, it was a welcome reprieve for market-watchers after some $8 trillion in stock-market wealth evaporated over the last three weeks.

It wasn’t all good news today, though. Bank of America Merrill Lynch cut U.S. growth forecasts to 2.1% (from 2.5%) for the year. The bank also said the chance for recession has risen to 20%, up from 15%. BofAML pointed out, though, that it would be “a big stretch” for it to look anything like the Great Recession.

Right now, the best thing you can do right now is to give this market time and let it play itself out over the next week or two. And if you’re in the path of Winter Storm Jonas, to stay indoors and consume all the bread, milk and other staples you stocked up on.

Stay warm, stay safe and we’ll talk with you again next week.

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Thursday’s rally provided only temporary relief from the new year’s selling. Those gains got wiped out today, and then some as stocks made their way back to October 2014 levels.

The Dow Industrials have lost some 8.2% just in 2016. The Nasdaq saw its worst losses since 2008 after today’s session. This puts the major U.S. markets firmly in correction territory — that is, down 10% or more.

Generally, a 20% or more downturn in multiple broader market indexes (such as the Dow Industrials or S&P 500) is considered an entry into a bear market if it takes place over at least a two-month period.

We aren’t there right now. But we aren’t as far away as we want to be, either.

The small-cap Russell 2000 is firmly in bear territory, as it’s down more than 22% from its 52-week high. The same goes for the Dow Transportation Average, while the midcap S&P 400 Index is nearing bear levels.

Today BlackRock (BK) Chairman Larry Fink said the stock market could fall another 10%. With stocks already down 10%-plus, this would put us squarely into bear-market mode.

Fink also said oil could test $25. Considering that WTI crude closed today $29.42 per barrel, that’s not a far drop.

Of course, as it’s often said, this isn’t a stock market but rather a market of stocks. We take our job seriously to uncover the best and avoid the rest … and to acknowledge but also maneuver around the broader mayhem.

One way to do that is with precious metals. And today was a good day for gold, with a nice $17 gain amid the sea of red across the board.  We wouldn’t say a correction/bear market in stocks will start a bull market for gold. But if you’re looking for a shining lining in the current bloodbath, you could do a lot worse than gold (and Treasuries, for that matter).

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If you want to own gold, buy jewelry

by Dawn Pennington on January 12, 2016

Mining stocks lost some $1.4 trillion in wealth last year.

And unless you’re buying call and put options to profit from quick up-and-down moves like JR Crooks does in Natural Resource Options Alerts, chances are that a chunk of your nest egg is part of that trillion-dollar-plus figure.

We don’t have high expectations for the miners. Like oil producers, they’re suffering under the weight of a rough market for commodities, more debt than incoming dollars, and not enough salary money to go around to get their resource out of the ground and into the marketplace.

I’m more of a silver fan than a gold bug myself. And I’m sitting on a lot of silver jewelry that is worth about half of what I paid for it (if that). My advice? Put it on your fingers, or around your neck/wrist … and enjoy what you own.

Yes, jewelry in pristine, never-worn condition will appreciate the most. But what’s the point of getting that emerald birthstone ring set in platinum that you waited your whole life for if you can’t wear it for more than 10 minutes at a time?

(True story: I lost mine moving from Maryland to Florida. I should have worn the darn thing.)

I might never have parted with that ring for cash unless I was in a dire situation. But it would have been wonderful to know that I had something of value in case I needed it. And it would have been wonderful to have enjoyed it while I had it.

My advice for those of you who are lucky to have your favorite sparkly things — keep the original boxes, don’t engrave the jewelry unless you do plan on keeping it forever and keep in mind that metals are more valuable than gemstones because they can be melted down to make something new whereas gems can only get smaller if you alter them. Oh, and keep them somewhere safe when you aren’t wearing them so you can actually take my advice!

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2015 in a nutshell

by Dawn Pennington on December 28, 2015

U.S. companies defaulted on their debt at a higher rate than other countries, according to Standard & Poor’s. Sixty percent of the 111 defaults this year came from the U.S., with Arch Coal joining the list as we predicted.

Meanwhile five CEOs lost more than $20 billion in the stock market. USA Today reported that Warren Buffett, Sheldon Adelson (Las Vegas Sands), Nicholas Woodman (GoPro) top the list of executives who lost big bucks in their companies’ shares.

Earlier this year, Frank Curzio suggested you dump GoPro ($GPRO).  But if you shorted the stock, be sure to cover your short ASAP because he sees several big reasons for a turnaround as soon as 2016.

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Who knew Jenga was still a thing?

by Dawn Pennington on December 28, 2015

Amazon said it sold enough of them for the holidays to stack them as high as the Empire State Building … 70 times over.

Here’s Amazon’s annual list of holiday sales facts for 2015.

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Is our credit score more stellar than Santa’s?

by Dawn Pennington on December 25, 2015

The jolly bearded one has a credit score of 757, according to new data by FICO. Santa’s solid credit score is thanks to his home ownership, regular use of credit to buy toy-making materials and paying debt on time for his top-tier borrower status.

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If not for taxes …

by Dawn Pennington on December 21, 2015

The Christmas story begins with taxes.

After all, if Mary and Joseph hadn’t headed back to Bethlehem for the census — ordained by the king for the purpose of getting more tax revenue — we wouldn’t have the story we tell today of Jesus’ birth in a manger.

Of course, if Jesus were born in modern times, there would have been lawsuits against the innkeeper (and the multinational conglomerate that owns it) for turning away the Messiah, or at the very least a lawsuit for the conditions of the stable being hazardous and unsanitary for an infant.

And were the animals up on their shots? Perhaps the anti-vaxxers would have had something to say about that.

And don’t get me started on the “snip-snip” argument when it comes to baby boys. Each side would march to the highest court they could get themselves to.

And if Mary would say want to breast-feed in public … or hop on birth control … or home-school the tiny savior child … it would be a global kerfuffle.

In any event, since the beginning of time, the government has played a massive part in our lives. And we continue to reel it in. 

Perhaps if we really want to reduce government’s impact in our lives, we can start by not giving them so much work to do that involves meddling in our personal choices and affairs.

Caesar Augustus would have loved the profits today’s problems would have brought in!

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A Perfect Gift for the Ideal Man

by Brad Hoppmann on December 17, 2015

The finest steel, the perfect weight and the perfect balance, spacing and pressure — those are the bold claims made by the maker of OneBlade.

What is OneBlade?

For starters, the product is responsible for easily the most incredible shaving experienced I’ve ever had, hands down.

It’s also a precise tool engineered for a man who appreciates a well-crafted instrument … one that has the ancient presence of a Samurai sword combined with the modern lines of a high-tech fighter jet.

This single-blade, single-edge razor has a pivoting head that makes the shaving process an exquisite sensory pleasure.

Yet the appeal of the OneBlade is much more than just its efficacy and simple pleasures.

For me, using the OneBlade added a level of Zen-like smoothness to my morning.

It has transformed a pedestrian and formerly uncomfortable five minutes of drudgery into a chance to celebrate man’s power to shape his existence — and to literally recreate reality in his own image.

In short, the OneBlade is a tool fit for any modern-day ideal man …

One who loves the pleasures of life …

One who appreciates ingenious form married with function …

And one who worships the best products mankind creates.

In short, the OneBlade is the perfect fit — and the perfect gift — for the ideal man.

***

As you likely already know, I am in the newsletter publishing business, and have been for many years. One of my mentors and fellow newsletter publishers is Porter Stansberry.

I bring this up because, in addition to being a giant in the publishing industry, Porter is the brainchild behind the OneBlade.

As he explains it, he got the idea to create the OneBlade after getting a shave in a tiny barbershop along Italy’s Adriatic coast.

The key to his experience was the quality of the blade. He told me it left his face smoother and feeling better than it ever had been.

Porter then went on a quest to create that same experience for himself and for others. And after some exhaustive and expensive trial and error, the OneBlade was born.

As for the look and feel of the OneBlade, well, you really have to experience it for yourself to truly appreciate the sleek craftsmanship.

Although it looks stunning in pictures, this is a case where pictures fail to tell the true and complete tale.

One of the coolest things about the OneBlade is how it just sits there on its own pedestal, waiting to be engaged.

Like a pedestal supporting a heroic Greek sculpture, the OneBlade’s base presents the shaver with a sense of rational pride — the kind of pride that one can only feel after an arduous and noble achievement.

***

As for the OneBlade’s functional virtue, I love how this shaver almost effortlessly glides along the angles and contours of my face, and all without the feeling you get from other razors that you are about to slice into delicate flesh.

Another great feature of the OneBlade is the ease of cleaning. Thanks to a design that exposes the underside of the handle to the cutting edge of the blade, whiskers and shaving cream rinse off easily. This not only keeps the blade sharp during your shave, but it also preserves the integrity of the blade’s edge.

I’ve got a pretty thin beard, and I can go about two or three shaves without having to replace the blade.

OneBlade recommends that, for the very best shaving experience, you should use one blade for each shave. But even the second shave per blade is by far better than every other shave I have experienced.

I have tried every expensive and value-priced shave that exists out there currently.

Image

If I were compelled to use an analogy to describe the OneBlade, I would say the form and function remind me of a fine Swiss luxury watch or a superbly tuned German sports car.

In both cases, tactile awareness, sensory feedback and consummate form mate with function. Together, they deliver the user that experience of "oneness" with a material object. It feels exceedingly rare yet sublimely natural.

Now, as you might suspect, an instrument of such quality design and craftsmanship doesn’t come at bargain price. The OneBlade shaver costs $299, which includes the first 60 blades. You’ll also need to replenish your blade supply on a regular basis, depending how often you shave and how many shaves you can get per blade.

Yet despite the price tag, I think the OneBlade is well worth the cost, especially if you look at the value over five or 10 years. I have not done the math yet, but I would bet you actually save a bunch of money over the high-quality disposables over the next half-decade or so.

It’s also the kind of fine instrument that makes a fantastic gift for the ideal man who loves to transform life’s necessary tasks into opportunities to celebrate the achievements of the best shaving product ever created.

If this describes you, or any ideal man you know, then the OneBlade is a perfect fit.

You can find out more about OneBlade directly from the founder himself Porter Stansberry by clicking here.

Happy and healthy investing,

Brad Hoppmann
Publisher
Uncommon Wisdom Daily

P.S. We are not and will not be paid by OneBlade for this review, nor do we currently have any business relationship with OneBlade other than receiving the product for review. But the quality of the product leads me to believe OneBlade is the best razor ever invented. So, I may seek to invest in the company or form a partnership sometime in the future. One of the company founders, Porter Stansberry, has been a close friend of mine since our childhood. After having dinner with both company leaders and discussing the product and process in detail with other employees, I fully trust Porter and the CEO of OneBlade, Tod Barrett, to back their product’s lifetime guarantee. I plan to buy this product as a gift for my three brothers and my father as well.

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If you think the usual ho-hum economic news, inflation data and all the other “known knowns” are set to sink the stock market right now …

Spoiler alert: They won’t.

But there is something that really could sink the stock market.

It is a real threat.

And it will always be a threat as long as markets are an extension of a tightly-coupled financial system micromanaged by policymakers via artificial interest rates and “peace-time” quantitative easing.

So as the markets get started this week, keep this in mind:

More than 20% of North American companies (even outside the energy market) are losing money and a subsequent rise in defaults appears increasingly likely.

Credit spreads on junk bonds and investment-grade bonds are widening.

Credit conditions are beginning to tighten after a trend of easing for most of the last five years.

Remember: Policymakers have adopted “financial stability” as their primary mandate since the 2008 credit crisis.

Ironically, their efforts have merely helped to sustain a fragile financial system that’s prone to instability — even if just a single psychological domino falls.

In light of this week’s expected interest-rate hike at the Fed, the threat of reduced liquidity is a real danger for the type of market that policymakers have incubated.

Don’t get caught overexposed, because the market falls a lot faster than it climbs.

That said, there are times when it pays to bet against the crowd …

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Week in Review

by Dawn Pennington on December 11, 2015

Oil dropped to seven-year lows this week, spooking traders into selling. Today’s closing price of $35.62 per barrel (West Texas Intermediate crude) puts oil down 11% for the week.

Now, it would seem low oil prices would be good for the economy. In logical thinking, that is correct. But, in the investment world, it’s not even close.

The reality is, oil stocks are a big part of the S&P 500. So, when they drop, so does the index.

With the S&P 500 finishing down today (it fell 2%), it has not had two “up” days back-to-back for 27 days. That’s the longest streak since 1970. So, put that into perspective when you think about volatility.

Oil and the S&P 500 are trading in parity with each other, which is not necessarily a good thing. It means that no stocks are “safe” at the moment. But if the markets are as ready as everyone says they are for a Fed rate hike, maybe Santa will bless us with a rally a lot sooner than the final week of the month.

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