07-04-2021 - 23 OUT OF 23
Happy 4th of July!!
For the past 23 years, the market has boomed higher in the last few weeks of June and continued strong into the 4th of July... 100% of the time. That's right... 23 out of 23 years this has happened.
While anecdotal and totally unscientific, it is nevertheless, an amazing stat. Call it seasonality or simply coincidence, but it was sure a fun ride for the past few weeks.
The good news (if you are a bull) is, the market is showing no signs of rolling over. You know and I know and literally everyone knows how long this current trend will last and since we know how long it will last, we are prepared for that fateful day when this bull market ends and the next major bear market begins.
What??? You don't know how long this bull market will last? Yes you do. You may not know that you do, but you most certainly do know.
If you are a follower of my missives, you know exactly how long this market will last and the thing of it is, you know how long it will last even if this is the first time you have read one of my blog posts.
The current trend in this bull market will last exactly... to the day... to the minute, actually... until... (wait for it...)...
It will last exactly until it doesn't.
Pretty anticlimactic... right?
If you are still reading at this point, please keep in mind that the above statement of how long this market will last is why most people get destroyed (financially) in bear markets.
Why? Because they do not know how or do not care to track when the "doesn't has occurred". 99% of all financial services companies (advisors and money managers) do not pay close enough attention to this fundamental, mathematical fact about all markets. Markets will change from bull to bear and from bear to bull at some point and you can, if you want to do the work, know when that HAS occurred and will know it early enough to make life-changing decisions about your investment strategies.
We constantly monitor the market to detect as soon as mathematically possible when the current bull trend has ended. Notice that I did not say, "when the current bull trend WILL end." I said "when the current bull trend HAS ended."... that's past tense.
No one (not any newsletter writer, or analyst, or asset management firm, or anyone on CNBC or Fox Business) can forecast when the current bull market will end (future tense). Oh, there are a lot of self-promoting guessers out there. I call them stopped clocks... their forecasts will 'someday' come true. Gold will go to $10,0000 an ounce 'someday'... they guess. The dollar will lose its reserve status 'someday'... they guess. Inflation will become rampant 'someday'... they guess. The US debt will crash the economy into another depression 'someday'... they guess.
But, unlike the big-name newsletter writers and investment firms out there, I don't guess; and you shouldn't either.
You don't have to.
Here is what I know, for a fact:
The current market is in a bull trend.
The current bull trend will last until it doesn't.
I can mathematically measure when the current bull trend has moved into a bear trend (so can you).
I know that holding onto fundamentally great stocks in a bear market is a great way to lose a lot of money.
I know that avoiding losing money is critically important to long-term financial success.
I know that inverse ETFs go up in bear trending markets.
I know that I can sell long holdings AFTER the market has moved from a bull trend to a bear trend and go to cash when most of the financial world is losing money hand-over-fist.
I know that I can put my clients into inverse ETFs in a bear market when it makes sense to do so.
June went out with a bang and at this writing (which could change at any time), the market is giving strong indications that it wants to continue moving higher. But, do not lose sight of the following: By definition, all bear markets begin at market tops.
This is why we have stops on every holding and why we work hard at getting stops above basis to increase the odds of generating solid profits if/when the "doesn't" occurs and our holdings get stopped out.