The market then recovered for several months, starting on November 14, with the Dow gaining
This article has been reprinted with permission from Stansberry and Associates and appeared at The Daily Crux. As you undoubtedly know, financial newsletter writers get paid to make bold, exciting predictions. After all, according to newsletter writers, the world is always either about to end… or about to boom.
In fact, what I would like to show you today is without a doubt the single greatest threat to your wealth you will ever face. The reality is, the terrible things and incredible booms we predict almost every day in the sales presentations for our newsletter business rarely come to pass.
As you would imagine, I have some insight into this question. After all, I have written some of the most famously hyperbolic headlines of all time in our industry. Some of these predictions turned out to be right, like when I predicted Fannie Mae and Freddie Mac were going to zero.
Why would I remind our clients of the single biggest weakness of our business model — our need for hyperbolic sales pitches? What can I say? I firmly believe that if you combine the strategies I explain in these notes with our investment research, you will excel as an investor.
In fact, I know thousands and thousands of investors around the world have used our work to become world-class investors.
They depend on us for reliable and profitable ideas. Sadly, though… perhaps because of our marketing, most of the people who try one of our investment newsletters either demand a refund or simply allow their subscription to lapse.
The main reason that happens is because the reason they subscribed — the original hyperbolic headline — did not pan out the way they expected. But… nothing costs you more in publishing. Likewise, nobody wants to read that their cherished financial nonsense is going to come to a bad end. Or the latest craze: Just mentioning that Bitcoin might turn out badly will likely cost me several thousand subscribers.
So… how can you know when a newsletter writer is going to be right about an outlandish prediction… perhaps one that goes against your own beliefs about the market?
In my opinion, the best guide is history. When history says the prices in a market have gotten completely out of whack, the newsletter writer is going to be right every time. Let me give you one recent example from these pages.
Barring the end of the world, the price of oil is going to fall and the price of natural gas is going to rise. At the time, natural gas producer Chesapeake was collapsing because of low natural gas prices and nearly everyone on Wall Street was short natural gas.
I recommended buying Chesapeake bonds and its competitor, Devon, and I predicted a huge rebound in natural gas prices. A year later, the price of gas has doubled. How did I know? A barrel of oil contains 5.
One thousand cubic feet of gas contains just a little more than 1 million Btu. Thus, a barrel of oil has approximately six times more energy than 1 million cubic feet of gas. On an energy-equivalent basis, you would expect natural gas to trade for one-sixth the price of oil. But of course, oil is more highly prized as a fuel source.
Historically, looking at the two commodities, the average multiple of gas to oil was about 10x. That is, a barrel of oil was, on average, 10 times more expensive than one thousand cubic feet of gas. By last April, that premium had reached an all-time high of 55 times. There was no way that kind of price relationship could have lasted.
You should expect oil prices to continue to decline and gas prices to continue to rise. When this crash occurs, it will be the largest destruction of wealth in history.The Great Wall Street Crash Of - The New Dealers were an important factor during the 's.
They were reformists, and they were determined to change the aspects of business and government that they believed caused the Great Wall Street crash of TIMELINES OF THE GREAT DEPRESSION: This page features two timelines: the first for general events of the Roaring 20s and the Great Depression, the second for leading economic indicators.
The American Dream is the ideal that the government should protect each person's opportunity to pursue their own idea of happiness. The Declaration of Independence protects this American Dream. It uses the familiar quote: "We hold these truths to be self-evident, that all men are created equal, that.
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Free Essay Samples; About Us; Login; Hire Writer; Contact Us; Home» Stock Market Crash of Stock Market Crash of The Stock Market Crash In early the Dow Jones Average went from a low of early in the year, to a high of in December of and peaked at in September of /5(4).