Sign up for FREE access to our Commentary & Past Stock Picks
The CymorFund Blog is a subscription service. Blogs about stock picks we add to our portfolio are available immediately only to Premium subscribers. All Subscribers have immediate access to the other categories of our Blogs, including Stock Picks that we have sold.
Market Volatility
As everyone knows by now, all markets have had somewhat extreme volatility over the last two weeks. The rate of dramatic “UP” days and dramatic “DOWN” days has been escalating. It seems that most days now have a dramatic move in one direction or the other. Sometimes there is a catalyst, such as the Volkswagen scandal, or The Chinese Manufacturing Index showing less than expected, or a sale of an asset by Glencore for a non-significant realization of cash.
Sometimes, it is markets trading in North American Off hours. It could be anything, but the trend is down.
It seems that each day there is a different reason, but the net effect is a general and sometimes dramatic, slide in stock values.
Even Saudi Arabia, which has hundreds of billions of US$ socked away, is facing massive financial deficits in the current year, causing them to take large sums out of their reserves to fund their current needs.
Why?
It could be the correction that long time market analysts say is due as the markets have been moving up almost continuously for too long a period.
It could be that the dramatic growth in China has been fueled by debt, and that debt is secured by assets without value – with the ‘chickens now coming home to roost‘.
It could be just a normal correction as happens with regularity.
It could be that the massive debt created out of nothing has caused enormous bubbles in real estate, bonds, and other wildly overvalued assets.
It could be that all of the ‘bailouts’ around the world, that are based upon yet more borrowing, and more printing of money, has finally gone beyond reasonability.
Is This A Biblical Prophecy
Of all the reasons, there is a startling series of coincidences that have an erie similarity to that which was prophesied. For those with a religious bent, I recommend a book written by Jonathan Cahn called ‘The Mystery of Shemitah’. Very scary with a detailed analysis of repeating patterns that indicate a coming very dramatic event.
The book details events including 9/11, the 2008 meltdown, the tech bubble, Black Monday, and much more.
But let us return to normal market analysis.
Is This The Future
Coming back to the more conventional analysis, one must remember that the market goes through these events with a track-able regularity. Remember, THE TREND IS YOUR FRIEND. If you see a trend developing, and if you ignore that trend, matters generally do not go well for you as an investor.
What To Do
Caution is the name of the game. Preserve your capital. Sit on the sidelines and watch. Take money off the table.
Don’t listen to the pundits that are blasting away with this bargain stock or that stock that has fallen so much that it is now a bargain. There are no bargains in a market that can go into free fall.
We don’t know if the market will stabilize or will do a radical about face and start going up. But the point is that it could go into a rapid decline. Investing now is not worth the risk.
We are looking at OPTIONS. Some options have become very cheap, and this is a method that for a minor sum of money, one can keep the bulk of their powder dry, and wait for the correction to run its course. If you are looking at options, we suggest LEAPS might be worth considering.
This website and authors’ opinions are intended to be informative, but information contained is not guaranteed as being accurate or a complete statement or summary of available data. We assume no responsibility for errors, omissions, or contrary interpretation of the subject matter herein. Any perceived slights, omissions, or mis-statements of persons, peoples, or organizations or other published materials are unintentional. This information is not intended for use as a source of legal, business, accounting or financial advice, & readers are advised to seek services of competent professionals. No representation is made or implied that the reader will do well from using the suggested techniques, strategies, methods, systems, or ideas; rather information is presented for news value only. We do not assume any responsibility or liability whatsoever for what you choose to do with this information.
We may or may not have positions in securities we name. In making an investment decision consider numerous factors such as portfolio balancing, timing, cash and capital reserves, asset allocation and other. Do your own research. Matters discussed contain forward-looking statements that are subject to risks and uncertainties and actual results may differ materially from any future results, performance or achievements expressed or implied. Views expressed are opinions and not investment advice. You should retain a licensed professional to guide you. This report is neither a solicitation nor a recommendation to buy or sell securities. We are not a registered investment advisor nor a broker-dealer.
