Regardless of what others might say, there is no quick fix for the global economy.
To illustrate this point, a friend of mine recently sent me a chart which I would like to share with you. This charts shows that we may be going into a prolonged period of no growth in the overall stock market. The NASDAQ peaked at 5,132.52 on March 10th, 2000. The NASDAQ market is in many ways more important than the DOW, and should be considered more of a leading indicator. If that is truly the case, then we have been in a bear market for the last eight years.
Trading throughout the balance of this decade and into the early part of the next decade is going to be the key to survival and for recovering the profits in your portfolio. We strongly recommend that you approach these markets with some level of expertise and knowledge of technical trading.
The future is going to be the future and we need to take advantage of every moment and prepare ourselves to be the very best we can be in whatever business or endeavor we are pursuing.
Loading ...Every success in the future,
Adam Hewison
President, INO.com
Co-creator, MarketClub
China will face housing slump in 3 to 5 years, the foreclosure in many ghost towns will evolve one by one; and when this happened, the panic will start and spread to the bigger cities which will eventually pull the the economic growth for the country, and investors and speculators who had over committed themselves will collapse.
Domestic chaos is expected, because the Chinese are not as well prepared and disciplined as the Westerners, who are more familiar with the Ups and Downs of the economy; the Chinese are only aiming for better and better each day.
Lets wait and see what will happen in the next five years..........?
Teng,
Interesting viewpoint.
Thanks,
Adam
The postage index----We could start the postage stamp index about the turn of the century. ..............................................................................................................................................................Before we had the following improvements: Income tax/ war/voting for females/airplanes/automobiles/phone service/interstate highways/welfare/military complex/ roads/computers/appliances/national debt. And Before: The Federal reserve bank This is not a part of the Federal Government. IT is a private owned bank. It has a monopoly of unknown owners. It is not subject to audits, reporting financial statements. It can print money backed by nothing, these are IOU's, It can sell treasury bonds for the US treasury Bonds are IOUs. The constitution of the USA, defines money must be in the form of gold and silver coins.
There was an audit of the gold and silver in 1952, held at Ft. Knox.
The ownership was and never be revealed. Foreign governments also store their gold there. The settlement between countries of debt. Gold has always been used for centuries as a means of settling debt. IOUs would never settle a debt '''''''' 'AND before: Federal Departments of: IRS/Education/healthcare/social security/energy/osha/civil rights//homeland security. To name a few. And before: The following law enforcement agents: ............ FBI/ATF/TSA/ICE (These are reserved for the investigations of USA citizens and illegals.} CIA (this agency is reserved for investigations of foreign nations} .......... http://www.history.com/photos/inventions-transportation/photo9 (USA around the turn of the century)
One could read the graph in another way:
up market 1904-1928
falling market: 1928/1932
up market 1932 - 1964
flat market 1964 - 1983
up market 1984 - 2000.
I am curious. Did the NASDAQ exist 100 years ago? I couldn't find anything passed the 70's.
Aleck,
No, the NASDAQ did not exist one hundred years ago. However it became the de facto market where all of the new companies were going public in the late 1990's.
Hope this answers your question.
All the best,
Adam
IMHO, think it not difficult to predict this. there so many jobs to be filled and we know that. take out the number that that will retire. assume they will fill all those jobs. those are the working population. you know the price of the market. That switch in population will determine the amount of dollars that will enter. there probably are figures of how much the generation had, the average age at death. subtract that amount. that will be passed on to their families. The exit by the this generation is very large, we live longer, i have some idea of what they have in pensions, real estate, and saved. When i look back, i doubt real estate market is look bleak. My parents did well. Only two of my eight friends have a pension, one has medical benefits, the other have none and will be medicare. we saved about the same amount but, we got wiped out with recessions, laid off a lot, and struggled. The stock market crashed 3x and they were wipeouts. So don't plan much of a pass on. life span and savings. There will less going in. for sure.
Thank you for your comment. I thoroughly agree.
Hi Adam,
Thanks much for point out this historical picture of the Nasdaq index, a valuable perspective for all of us. Following along your much appreciated intent to identify specifics that are helpful, I would say the poll question "will the world economy muddle along or..." is too general to be meaningful. A view of today's world economy has to understood as two opposing realities; The economic rise of Asia led by China vs. the decline of the West led by the U.S. That's a mouthful, yet it gives all of us the accurate perspective to understand exactly what we are dealing with in terms of economics, business and of course, investing & trading. The U.S. has $15 trillion of debt while China has $15 trillion of untapped mortgage-free home equity.
I was sorry to hear you were in China recently and we didn't have the opportunity to cross paths. I attended a CEO breakfast at the Landmark Mandarin Oriental in Hong Kong last week, you would have enjoyed it.
Cheers and thanks as always,
Mario Cavolo
Mario,
Next time.
Thanks,
Adam
In a static worldI would expect to muddle along till things naturally drone out. Fortunately the world is very dynamic and things are constantly changing. Technology, Geology, Wars, Political maneuverings, all make each event the same as last time only a little bit different. Catastrophy has always been emminant for all of my 55 years on this earth and it never quite arrives before something else happens that causes us to forget. Many noteable folks from the past have commented on this detail but most of us never seem to notice. Maybe we just muddle through after all.
To answer Sid above, years of overperformance are followed by years of underperformance, that's called regression to the mean. From 1982 to 2000 the S&P 500 averaged about 16%-17%, well above the 10% "norm". In order to correct that we must underperform for a "similar" period, say 16-18 years. In that period we will get great bull moves that will only be retraced. When we look back from 2018 we will see that the average on the S&P 500 during that secular bear period was 3%-4% getting the average's back to the norm. Enjoy the rallies but they won't last for the next 6-8 years. Buy and hold which is dead for now will be come back in vogue in the next bull market.
Jim,
Thanks for for your valuable feedback.
Adam
well said!
The headline here falls into the "Duh!" category.
Tea Party members have been screaming all this stuff at the top of their lungs for the past several years, but the Gov't doesn't want anyone to hear, so the sicked the lap-dog media (aka: propaganda ministry) on us and have branded us "racist". Kinda' like what they did to the banks that weren't making enough mortgage loans to indigent families (who could never afford to pay back their loans). America, our government is a danger to us and our children. WAKE UP!!!!!
yes thats good for gold also
I like to justify the stock based on the common sense and nature law. Can You expect a person out of ICU and recover very soon? in particular, for the cancer one. The system in US is broken, it just needs to take longer time to be fixed, I believed although I also feel positive. Since we have manipulation under this figure economics, it probably might take longer based on Laozi's law,a philosopher of ancient China, I think. ~ A Mandarin speaker
I agree with John Wilson:
"For those willing to spend time reading economic history and thinking, we are approaching one of the greatest opportunities of a lifetime."
I expect a falling market interspersed with upward spikes. (A Great Depression chart will give you an idea.) Problem is, technical indicators will either be untrustworthy or too late much of the time. Nevertheless, this will not be a FLAT market, and any market that is not flat can be exploited for gains.
Further, at the end of the downtrend comes the greatest bull market of our lifetimes. The question now is how to survive the downturn and how to play the bull market when it comes.
At this time of year, let me give thanks for Adam and his earnest efforts and concern on behalf of his clients. All investment advisors should care as he does.
1st - Adam, the bull phases lasted 8, 20, and 18 years. That's not a consistent cycle. This tells me that the bearish phase doesn't *have to be* consistent either. IOW this graph is not consistent enough to predict the future using the past. Nothing ever is! Otherwise it would be too simple to make money 🙂
@tango6 -- agree with you.
Since markets always hurt the majority and reward a small minority, option three is a trader's best bet.
I would not be suprised if the unprecendented debt levels throughout the world are solved through three main methods:
Some will be inflated away
Some will be defaulted away
and some will be solved through population reduction (spelled WAR)
Let us hope that there if very little of the latter
But I suspect that politicians under pressure will always opt for the easiest way out
I've always enjoyed the S&P 500 as a barometer. The Monthly has the most amazing double top. Further, we are also coming to the apex of this moves (March 2009 to now) double top. Fibonacci retracement at about 60% - and stopping. Will it move up from here or not? Daily charts are not that persuading and if the monthly double top and Fibonacci retracement is any indication, it's going to be a long slog for the United States.
Anyone here speak Mandarin Chinese? I think it may be time to take some lessons....
With the push for a new world order and George Soros doing everything in his power to bring down America as a super power, the political and economic systems are lining up for a crash and ushering in a one world leader to solve the problems. If America falls so do the rest of the world economies. This all falls in line with Biblical prophesy for the "last days" as the "great snatch up of those who follow the TRUTH" is getting closer and closer.
I believe we are at a crux of a turn in century of the modern world as we know it. Major super power shift and capitalism infused, republic maybe a new shift in these confusing times.
No crystal ball here, but we live in dangerous times of conflict and strife.
so indecisive are the markets cannot settle into a pattern, this is foresight so we take it day by day week by week and so on.
Q:When was the last time trading stopped?
Q:How long was it before trading commenced again!
If it is true, as John Williams's "Shadowstats" and others have said, that the total of US federal, state, local and private liabilities including both current and future (unfunded) debt obligations is approx. $200 trillion, then using quick and dirty math, that amounts to over half a million dollars of debt for every citizen including even the next, as yet unborn, generation.
Even if not one more cent of debt is ever accumulated (yeah, sure!), it would take generations to pay off the existing obligations. In other words, this country and it's citizens have all been bankrupted. How does this happen?
I believe the blame can placed squarely at the feet of the Federal Reserve Banking system. Simply put, the concept -- of a bank that is allowed to create unlimited amounts of un-redeemable confetti (and have the audacity to call it money), to buy all the legislative favors it needs by funding any amount of government excesses of spending and debt, collect and distribute interest profits on every mysterious fractional reserve "$" among it's banker cabal members and, without any need for voter representation, freely assign the responsibility for all debt obligations thus created to all US citizens in the form of the "stealth tax" of constant devaluation of the earnings they work for -- is insane!
If it can be said that work has an equivalent value expressed as the purchasing power of money earned, then the Federal Reserve has confiscated (through inflationary devaluation) over 97% of the value of all the work performed by the people of the US since 1913, and the rate of confiscation is rapidly increasing.
If the government were limited by the requirement to repay all monetary obligations it incurs with an actual equivalent value, i.e. a universally accepted medium of exchange (true store of value), banks would cease to have the oligarchic power over money, there would be no need for a central bank, and we would not find ourselves in this economic dead end.
Remember what W.C. Fields epoused!
Adam,
......if this is a 100 year fractal then we have a bit of a spike up in the near future and then an escalator down event to look forward to....could you not load this chart in and see what your (medved) triangles make of this synthesis
Adam--
First of all thank you greatly for your site, information, and dilligence. I find the information to be on point and unbiased. The historical information you supply really helps bring the long term and very long term trends to light, and I would say that decade long (or longer)trends must be taken into consideration when planning for long term investments and more importantly long term SAVINGS.
I of course understand that this is a site primarily dedicated to trades of the short term, but being that I need somewhere very stable with minimal risk and strong growth to place my savings I have chosen to save in pre-1933 Private Gold and Silver. This Market has not only been stable over the past 15 years or so, but has consistently generated profits that bonds or CD's can't touch.
NMelendez brings up a great point with the GCC / UAE currency making its debut here shortly. I beleive this can be a gamechanger -- can the Dollar maintain it's status as the world reserve currency? Well, not forever, we all know that. Something will take it down, and that will be catastrophic for people holding only paper dollars and contracts denominated in Dollars. But looking at a 10 year or 20 year chart for the Dollar,( they aren't easy to find )it becomes very apparent that long term savings in the Dollar makes little to no sense. This is before we factor in the upcoming inflation being brought to us by our friends in Washington and on Wall Street. The last thing I would be doing at this point is hoarding cash....
Any comments are invited.
I also forgot to indicate, look at the previous to 1930's bust(1873?).If you follow the bear markets, one bear market goes down 1.5%(-1.5)from top. The following bear market goes down 80 to 90% from top. It's cyclical. We are now in a 80 to 90% drop bear market. The one following this one starting in 2038 will be a -1.5% correction. I know it sounds a little wierd but theses are just normal cycles. Right now i am stowing away cash, big time.
You also forget one item. In 2010 the 6 UAE members are planning to start issuing their own currency. So what happens when Oil is no longer traded in US dollars? Their is, of course, Canada with it's huge oil sands.
Adam,
I agree with your observations and commentary, but
I'm curious as to what specific reasons you have
for considering the NASDAQ a more significant leading indicator of future market direction than
the other indices such as the DOW?
Erick Tippett
Chicago, Illinois
Adam:
Just wanted to let you know that I do apprecate your comments and use you input as part of my decision making when entering the markets.
Thanks for all you do "happy new year"
Bob W
Adam - For those willing to spend time reading economic history and thinking, we are approaching one of the greatest opportunities of a lifetime. Probably a few more years but then you can buy straw hats regardless of the weather.
Enjoy your site and comments.
Happy New Years, John
It is not only the NASDAQ or DOW that are likely to be affected, but the equity markets across the globe, including the emerging markets too.
In particular the BRIC countries (Brazil, Russia, India, China) have enjoyed amazing growth rates in recent years, both in terms of real economy GDP but also in the performance of their domestic stock markets.
In these markets much of the growth in stock valuations has been in commodity producers, such as oil and gas companies,and iron ore, aluminium and copper mining companies.
Until such time as there is a noticeable and sustained increase in energy and metals consumption, these markets are likely to remain subdued.
Just consider that Russia needs crude oil prices to be well over $60 for it to be making a net contribution to its economy. So while crude prices are down below $40, from their July 2008 high of $147, the Russian economy will be in very bad shape. Add to that the milder winter and lower demand than usual for natural gas, one of the country's major commodity earners, and it does not look good.
China has the $586 billion stimulus package which should mitigate some of the worst aspects of the slowdown, so long as the investment can feed into the earmarked infrastructure projects swiftly and the money gets circulated in the economy, and saves and creates jobs.
This graph from Adam helps by putting the current market difficulties into the long term perspective, and so perhaps we need to be braced for volatile times and take advantage of relatively short moves in the market.
There could be upward pressure again on the crude oil price if much needed new refining capacity investment is not forthcoming, as well as if there is a lengthy period of tension in the Middle East.
Dear Adam,
Your perception and insight has provided investors with a clearer picture of the present & future. I also find INO.COM as a refreshing reputable and creditable site as an investor. Too many investors are swayed by misinformation by Research firms, their experts, and their high target prices for years. And that includes the tainted views of star mine experts too. Lastly, Thomson financial never adjusts their mean targets as well, if a stock has gone down -96% in a given year. You are the sole precise Investor tool that provides every investor with total accuracy as far as I am concerned. GOOD JOB! MUCH APPRECIATED!
JIMMY T