The 2020 Stock Market Crash Thread

Blade Runner

Woodpecker
What do you all think about having cash in hand given the possibility of coming banking issues/lack of trust in withdrawing money, benefits of deflation, etc? Is that something that may be smart until the supposed post 2021 period of greater inflation?
 

NoMoreTO

Pelican
What do you all think about having cash in hand given the possibility of coming banking issues/lack of trust in withdrawing money, benefits of deflation, etc? Is that something that may be smart until the supposed post 2021 period of greater inflation?
I took some out at the very start of this and still have it handy. I was actually wondering whether I should take it back to the bank as I don't have an actual safe.
 

Deepdiver

Hummingbird
Gold Member
The latest Strategic Intelligence regarding Gold:

Russia, China and the Super-Rich Are Going for Gold. How About You?
You’re likely aware of the price action in gold lately. Gold has rallied from $1,591 per ounce on April 1 to $1,784 per ounce as of last Friday. That’s a 12% gain in less than three months. Today’s price of $1,784 per ounce is the highest since 2012 and a solid 70% gain from the low of $1,050 per ounce at the end of the last bear market in December 2015. The history of gold bull markets (1971–1980 and 1999–2011) shows that the most powerful gains come toward the end of the bull market, not at the beginning.

That means even if you’ve missed out on the gold rally so far, you could still score huge gains as gold trends toward $10,000 per ounce over the next four years. What’s driving this bull market in gold? It’s not retail investors (apart from a small number who understand the dynamics) and it’s not institutional investors (institutional portfolio allocations to gold are typically about 1–2%). Instead, the steady buying is coming from central banks (especially Russia and China) and from the super-rich, who typically store their gold in private nonbank vaults in Switzerland and other good rule-of-law jurisdictions. As described in this article, the drive toward larger portfolio allocations to gold (in some cases up to 10%) is coming not just from the rich themselves but from their wealth managers and portfolio advisers.

This is a sea change. For decades, wealth managers have rejected gold and pushed their clients into stocks, corporate credit and alternative investments including private equity. Recently all of those portfolio allocations have backfired. Equity markets crashed in March and are set for another fall soon after recovering over half the losses. Corporate credit downgrades are at an all-time high and that market is being propped up by the Fed in nonsustainable ways. Private equity looks increasingly illiquid as IPO markets dry up and most hedge fund investors have badly underperformed. This leaves gold as one of the best performing asset classes around.

If central banks, the super-rich and their advisers are all jumping on the gold bandwagon, what are you waiting for? Gold’s worst ever bear market (2011–15) is behind us and gold is positioned for new highs of over $2,000 per ounce in the short run and much higher over the next two years. The time to go for the gold is now.
 
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Deepdiver

Hummingbird
Gold Member
Strategic Intelligence latest Gold Mining pick:

Kirkland Lake Gold (NYSE: KL) is one of the premier gold stocks available in the market. It recently closed on the acquisition of Detour Gold. Years from now, if gold prices are much higher, this acquisition will likely be viewed as a phenomenal deal for KL shareholders.

Kirkland Lake is a growing gold producer operating in Canada and Australia that produced 974,615 ounces in 2019. Prior to the outbreak of COVID-19, Kirkland Lake was on track to produce 1.5 million ounces of gold in 2020.

Action to take: Buy Kirkland Lake Gold (NYSE: KL) up to $45 per share.
 
What's the best strategy when it comes to buying gold? Does it make sense to buy it a few hundred dollars at a time, once per month? Or is that a futile/underwhelming effort at this point?
 
What do you all think about having cash in hand given the possibility of coming banking issues/lack of trust in withdrawing money, benefits of deflation, etc? Is that something that may be smart until the supposed post 2021 period of greater inflation?
We're primarily in cash. Inflation over the next 10 years is remote enough to be impossible.
 

gework

Ostrich
Gold Member
What's the best strategy when it comes to buying gold? Does it make sense to buy it a few hundred dollars at a time, once per month? Or is that a futile/underwhelming effort at this point?
If you are buying gold you are buying near the all time high in USD. Its been at all time highs in other currencies for some time.

Although it has the potential to go up, I think it will likely go down first, as in 2008. What's the likely top upside? Maybe $3,000. So about 80%, if you time it perfectly. But buying in at all time highs is not worth the risk, for what might end up as 50% gains.

I'd rather look at junior gold and silver miners. Many are down around all time lows. And if there really is a gold bubble you are looking at 5-100x gains.
 

Blade Runner

Woodpecker
If you are buying gold you are buying near the all time high in USD. Its been at all time highs in other currencies for some time.

Although it has the potential to go up, I think it will likely go down first, as in 2008. What's the likely top upside? Maybe $3,000. So about 80%, if you time it perfectly. But buying in at all time highs is not worth the risk, for what might end up as 50% gains.

I'd rather look at junior gold and silver miners. Many are down around all time lows. And if there really is a gold bubble you are looking at 5-100x gains.
Careful, miners go down in bad markets, whereas royalty companies fared much better in recent history.
 

Deepdiver

Hummingbird
Gold Member
KL Additional info... Literally one of the best run most profitable Gold Miners in politically safe Oz and Can bucks that also gain a currency pop when output sold in USA, EU, UK markets... Whereas Juniors are a takeover bet and much higher risk

Kirkland Lake is among the most shareholder value-focused gold miners in the market. On May 6, Kirkland Lake reported first-quarter financial results. Like many other gold miners, it withdrew full-year guidance due to the uncertainty associated with COVID-19.

The company earned $0.79 per share, up 84% from the first quarter of 2019. Its balance sheet is in excellent health, with no debt and $531 million in cash. With ample free cash flow, Kirkland repurchased nearly 10 million KL shares and doubled its dividend to $0.125 per quarter.

One of the key takeaways from the quarter is that the Detour Lake asset that Kirkland Lake acquired on Jan. 31 had a great operating result in the two months it was under new ownership.

Detour Lake “had very, very good operating performance, producing 92,000 ounces in two months ending March 31,” said CEO Tony Makuch on the earnings call. “Cash costs of $696 and all-in sustaining costs of $1,108 per ounce were in line with expected levels for the quarter.

During the quarter, we saw the tremendous leverage Detour Lake has on the gold price. I already mentioned $78 million of free cash flow generated in two months, and that was about 40% of our total free cash flow for the quarter excluding nonrecurring items of the company.”

Kirkland Lake shares trade at just 12 times the consensus forward earnings estimate. That’s a slight discount to its peers, even though Kirkland Lake has superior assets located in very mining-friendly jurisdictions.

Moreover, it has a currency benefit from producing gold in mines that have operating costs denominated in Canadian dollars and Australian dollars. We think fair value for Kirkland is well into the $60s and that the stock could hit this price by early 2021.
 
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Even considering the record expansion of the Fed's balance sheet?
The Fed would like you to think they're printing money but that's not how it works. Even if they could, as quickly as they create, the system can and is destroying. This is why after 2008 there was no growth and they, by their own admission, missed their inflation targets for a decade. We're still playing out that crisis.

All you have to ask yourself is why they embrace the inflation story so intensely. Ie if you believe inflation is on the way, you'll spend, which they're hoping you do.

This is a global dollar shortage. What you know is, however much the Fed did, the hole is that much bigger. That should scare you. We're talking deflation on a biblical level. At best, stagflation.
 

Deepdiver

Hummingbird
Gold Member
Jim Rickards latest Strategic Intelligence alert:

Did You Disinvest From Chinese Stocks Yet? It May Be Too Late

We've been warning readers for over a year to get their money out of China and Chinese companies before it's too late. What's going on in U.S.-China relations is more than just a fight over tariffs or exchange rates. The conflict has degenerated into a new Cold War. The tariffs that Trump applied in January 2018 were more of a symptom than a cause of this conflict. The Chinese Communist Party are running concentration camps where they round up dissidents and members of the Uighur and Catholic minorities for "reeducation." Unlucky dissidents have their organs removed while they are still alive and without the use of anesthetics to supply a multibillion-dollar organ transplant industry. Once the victims die from the organ removal, their bodies are quickly cremated, as happened to victims of the Holocaust. China is now engaged in forced sterilization and forced abortions on Uighurs as a form of genocide to wipe out the next generation. China has also passed a new "national security" law that applies to Hong Kong in violation of the 1997 treaty between the U.K. and China regarding the handover of Hong Kong to the PRC. The treaty was supposed to guarantee basic freedoms and the rule of law until 2047. China just tore it up and began arresting protesters, who will be sent to Beijing for trial and probably never heard from again. China is also threatening war with India over a disputed border in the Himalayas and threatening war with Taiwan across the Strait of Taiwan. China continues to manipulate its currency, steal intellectual property and pursue digital surveillance over every move of its 1.3 billion people. In the face of this relentless totalitarianism and anti-capitalism, the U.S. is moving close to breaking ties and forcing China out of U.S. capital markets entirely. This article reports on pending legislation that would ban Chinese companies from operating in U.S. capital markets and cause the delisting of Chinese companies listed on U.S. stock exchanges. Investors who followed our earlier warnings have had time to get out of their Chinese investments ahead of this wave of revulsion at Chinese business practices and suppression of human rights. It may not be too late to get out of China if you still own any of their stocks, but the hour is definitely getting late. Things will only get worse from here.

Note approx 300+/- CCP Communist Red Chinese Companies were able to raise $3 Trillion USD on US Capital Markets EXEMPT from US GAAP Accounting standards... Not a bad ROI on their $1.5 Billion USD Bribe to Traitor Joe Bidens Coke-Whoring and snorting son Hunter in 2013... go figure.
 
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Deepdiver

Hummingbird
Gold Member
Whoa as I predicted earnings are a horror show...

Market participants have so far set a low bar for second-quarter earnings results across sectors, with the coronavirus pandemic and measures taken to contain it at their most widespread in the April through June period this year. The estimated earnings decline for the S&P 500 is 43.8% for the second quarter, according to data from FactSet as of early July. Such a result would represent the largest year-over-year decline in earnings since the fourth quarter of 2008, and a steep downward revision from the estimate as of March 31, which had been for a decline of 13.6%.
 

Deepdiver

Hummingbird
Gold Member
I watched a funnel video hyping Technology Profits Confidential new report on Apple-Fi Global Satellites network to provide high-speed ubiquitous internet globally for $4.99 a month - they have filed a number of "secret patents" to protect their AppleFi R&D IP. This would be a major disruptor to cable, cellular, and phone line inet providers ... they claim this will obsolete 5G/6G. The report highlights the handful of suppliers to AppleFi that will soar - he mentioned most of these small applefi partners are in the $5 per share range and likely to see 1000's of percent gains once AppleFi begins to roll out - he teases a major July 28 Apple shareholders announcement...

Apple’s Greatest Breakthrough Yet: Retire Rich On The “Apple-Fi” Revolution

Report is free if you buy a $99 Digital only vs hardcopy Subscription to Technology Profits Confidential

Anybody have a clue as to who these AppleFi suppliers are?
 
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