It Was the Best of Times ….
On Friday the 26th, we locked in a big win.
Nine days earlier, on Wednesday the 17th, as a protective shield, we purchased a large position in SQQQ, a triple short.
We sold that position on Friday, earning an 11% profit on a 40% size (we invested 40% of each account in SQQQ).
Our AG model, aggressive growth, for the month of August, is beating the S&P 500 by an outstanding +300 basis points. The S&P is down 1.59%. That is an RFS win of +4.59% (one basis point is 0.01 %).
It Was the Worst of Times ….
I have no idea what the Fed and the White House are doing.
All I can tell you is investors and institutions don’t like it. I believe more pain lies ahead, and the current bear market could rival the period from October 2007 to March 2009―a nightmarish bear market of -57% on the S&P 500. I am far from alone in having that opinion, and lots of bad news out there supports that view.
Much of the bad news I’ve covered in recent emails. Unfortunately, there’s more.
Water Water Nowhere and Not a Drop ….
Bloomberg reported on a world-wide fresh water shortage with over 20 pics of rivers and lakes bone dry. The pics are staggering! (You can get an intro subscription to Bloomberg for $1.99/month here.) In one case, the Rhine and the Danube, where they try to connect to the Main going over Switzerland, the rivers no longer connect. Water levels are so low that all boats, barges, and cruise ships cannot pass. I have been there, and have seen it. It briefly happened in July, 2015. This is much worse. This is crippling transportation of oil, food, grains, etc., and causing the cancellation of thousands of cruise ship reservations.
The “leisure” sector stock market index, which includes all the publicly traded cruise lines, is -31% YTD. Europe is in an economic free fall. Bloomberg also went on to say that thousands will suffer from hunger this winter, mostly eastern Europe, and millions in the UK are facing heating energy price increases of over 300%.
Here in the U.S., we are having the same problem with the Colorado and Rio Grande rivers, creating massive shortages of fresh water delivery to Los Angeles and all of southern California and east to Arizona and beyond.
Impact on People
The saddest news of all is that domestic violence, drug abuse, and suicides are all on the rise in the U.S. Along with abortions, this portends a huge, long-term demographic problem for the U.S.―fewer babies, fewer employees, fewer tax payers, fewer consumers.
Lastly, Bloomberg included numerous reports of higher delinquency levels of mortgages and auto/truck loans. They sit at their highest marks since the March 2009 Great Recession.
All of this comes from Bloomberg, so you might want to consider a subscription for $1.99/month (here).
Maybe someone can explain the game plan of the Fed and the White House.
I do know that everything can get a lot worse before it gets better.
Prepare to see another position in SQQQ soon.
If you have any questions, comments, or suggestions, please call us at 301-294-7500. We are always happy to answer any questions you have.