Pandemic panic: 2nd wave climax - Fed crippled!
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
What NO ONE expects is a deep recession; there are a number of CONFLICTING THEORIES as to what the recovery will look like, but nothing about entering a recession. The consensus is that the pandemic is highly-contagious, but not lethal; "with a vaccine coming and FEAR LEVELS subsiding, a recovery has begun," is the general idea.
Where OPINIONS DIFFER is about its strength and inclusiveness of the recovery:
The market believes that each company that isn't on the cloud is going out of business, which has led to a bubble:
You should consider THE FACTS about the pandemic, before I move on to the THIRD CAMP, which are the investors who believe in the "V"-shaped or quick "U"-shaped recovery.
The MOST IMPORTANT fact is that the PANDEMIC ITSELF isn't lethal; the real crisis is overwhelmed hospitals and insufficient medical staff.
While no one likes to see CROWDED HEALTH FACILITIES, if those do return, this would be nowhere near the panic levels of March, when healthy people feared FOR THEIR LIVES.
Therefore, to expect markets to price in MARCH LOWS is a bit of a stretch of the imagination.
Instead, be agile in your thinking; there are REAL BARGAINS out there. Flexibility is needed, though. Don't wait for sellers to hand you once-in-a-generation prices for the second time in six months.
As you can see, tight presidential races WEIGH ON PRICES, since it's a huge unknown factor, especially when the parties are THIS POLARIZED on policy and public ideas.
It's a tale of two Americas with two opposite agendas.
Where does gold come into the picture?
Wall Street and institutional money will be ENTERING EQUITIES on this severe dip and you ought to know that BUYING NOW is playing with fire, but I am certainly am.
Gold stocks have also reached their MOMENT OF TRUTH:
Courtesy: U.S. Global Investors
They MUST PENETRATE below the average of 2.5; that will signal a MULTI-YEAR TREND, which will confirm the bull market. The fact that Kinross and Newmont, among other large-cap miners, are RAISING DIVIDENDS, is a healthy sign of confidence from the most reputable management teams out there.
The September dip has allowed us to find companies with GREAT SUPPORT and I'm going to present new stock profiles, since, as the chart above shows, we're ON THE CUSP of the REAL MOVE.
Gold might sell in this panic even further, but that's not the REAL TREND; think ahead by 6-12 months and you'll realize that inflation is accelerating!