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Wall Street is Dead Wrong

It was a billionaires’ conference… only multimillionaires, those with massive private businesses, generational inheritances, and family offices, those that manage 8 figures for themselves or one client, were the only ones in attendance, and they’re obsessed with this term: “wealth preservation.”

In their minds, this makes them prudent and risk-averse. They don’t invest in companies unless they’re already profitable, and it would be better if they paid a dividend as well.

They don’t want to hear about growth and cherish bear markets as the great cleansers of childish millennial speculators who drive up the market caps of meme stocks and get their moment in the sun every 2 to 3 years…

Wall Street is hypnotized by an oil price shock, a yield curve inversion, an inflationary mess, a double-dip recession, a Brexit, Chinese currency manipulation, tariffs… should I go on?

Businesses and management teams are, by definition, only worth investing in if they’re able to outpace the rate of growth of the average economy, adjusted for inflation. The best ones can outpace their own industry, should that be higher than the overall economy.

To enter and exit companies whose trajectory is to grow for years to come because of issues unrelated to the business models and competitive landscapes shows that one isn’t really an investor.

We’ve seen lots of money rushing for the exits, and Goldman Sachs’ indicator of sentiment in the stock market tells you as much:

Courtesy: Zerohedge.com

I am going to show how the stock market has performed in subsequent months in previous instances of such pessimism, but before I do, understand that owning shares of a company makes you a partial owner of that business, and some of THE BEST companies in the world thrive and are at their best during slowdowns and recessions when weaker competitors fall short of the glory.

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    Here’s why:

    Courtesy: Zerohedge.com

    While conventional wisdom is that rate hikes lead to tightening of the economy, the FED has already communicated the way they’ll raise rates in 2022, so markets are 75%-80% prepared for these. If Wall Street and smart money wanted out, they’d already be in cash or alternatives.

    Rate hikes will not crash stocks, and even aggressive rate hikes won’t do it because the FED sent their two biggest hawks to speak to the public this week and scare them, so we already know what the most aggressive governors (who will never get their way) are thinking.

    The FED will hike by 50bps in one meeting, either in May or June, and the biggest short-squeeze of the year will begin.

    Everyone will assume markets will crash, but the rally will intensify. Smart-asses will deem this to be a fake-out, a trap, and a bounce of sorts, but it will be the resumption of an uptrend.

    Courtesy: Zerohedge.com

    The consensus is that inflation is now being fought by all of the most powerful entities because everyone knows it’s a pressing problem. If inflation remains at crisis levels through September, it will surely dampen the waters, but otherwise, the bottom for the year is in, barring a catastrophic black swan event.

    Best Regards,
    FutureMoneyTrends.com

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