In this Article
- Crypto Market Hasn't Reached Bottom…
- Beating the Market Isn’t About Timing
- My Current Strategy for Coming Out on Top
I recently attended a conference in Pennsylvania. And to my surprise, I was the most popular guy there.
Despite the significant pullback in crypto… I had numerous people come up to me and ask, “Should I buy more bitcoin?”
On the surface, that may seem like a bullish case for bitcoin. People are still buying the dip.
But for me, it’s a sign that the crypto market hasn’t reached a bottom yet.
You see, in a real bear market, people don’t ask you if they should buy more of anything because they’re not buying at all.
I experienced this firsthand during the Crypto Winter of 2018–19.
No one wanted to talk to me about crypto when I went to events during that bear market…
Some even mocked me for my predictions, saying things like “Hey T, how’s that magic internet money doing?” and “How’s your $40,000 BTC prediction working out?”
But the reality is that when investors absolutely hate an asset, that’s when you know you’re in a bear market.
Here’s why I’m telling you this…
When I go to a crypto event and am still the most popular guy there, I know the bear market’s not over.
And right now, I see signs there’s still another leg to drop in both the crypto and equities markets…
As I warned readers recently, the liquidity crisis in crypto hasn’t abated yet… And we could see more overleveraged companies forced to sell off their bitcoin and Ethereum.
Stocks aren’t out of the woods yet either.
Even with the current pullback, the S&P 500 is wildly overvalued at 19 times earnings… And the Nasdaq is overvalued at 38 times earnings.
That’s still above their historical averages. So the slightest bit of bad news could cause them to revisit their 2022 lows… And probably break below them.
We might even see the next shoe drop as companies start releasing their Q2 earnings.
In June, 93 companies lowered their forward 12-month earnings forecast… And only 73 companies revised earnings higher.
So 56% of earnings revisions were to the downside last month… That’s the highest rate since June 2020, when the pandemic caused earnings forecasts to collapse.
I’m not trying to make you panic. But you must be mentally prepared for what’s ahead.
You’ll probably want to sell your high-quality assets in the coming days and weeks… And that’s something I don’t want you to do.
Beating the Market Isn’t About Timing
Many readers write me asking, “Teeka, if you’re so bearish in the short term, why don’t you just sell all your positions and buy back in at the lows?”
I’ve been in the markets all my life… I’ve become wealthy as an investor… And I’ve never been able to consistently time the market like that.
Maybe I’m just not smart enough to time markets. If you are, congratulations, you are in a tiny minority… The reality is I don’t need to be a market timing wizard to make fortunes from the stock market…
What I’ve learned over the years is you don’t need perfect timing to make money in the markets.
You need a sound investment and position sizing strategy, and you need to stick to it. That’s what I’ve done.
I’ve built what’s arguably the most successful track record as a newsletter editor by recommending world-class assets and letting time do the heavy lifting.
Since I took over my flagship Palm Beach Letter advisory in 2016, our average annual gain is 147.8% – even with this current market pullback.
By comparison, the average annual gain of the S&P 500 over the same time is 12.9%.
That’s actually a bit higher than the historical average annual return of the S&P 500 of about 9.5%… So even in a great bull market for stocks – we’ve done over 11 times better.
We do it by owning world-class assets that generate plenty of income through dividends or yield… And then we take some of that income and redeploy them to “asymmetric” ideas that can potentially turn tiny grubstakes into life-changing gains.
That way – even if our asymmetric ideas blow up – my subscribers haven’t put their current lifestyle at risk.
For some, this strategy may be boring. But it sure beats the constant in-and-out trading that Wall Street wants you to do.
Every retail brokerage firms want you to try and “time” the market… even though they know it’s nearly impossible.
That’s how they make their fees. Any time you make a trade, they get paid (whether you see a commission or not). So the more trades you make, the more money they make.
Wall Street’s not making money if people aren’t banging in and out of stocks every day…
Why do you think Robinhood’s stock is down 53% this year?
The number of monthly active users on the platform continues to decline… and the average revenue per user has dropped 61% from last year as its users trade less.
So I’m happy to take a “boring” 147.8% compound average annual gain over the most exciting hedge fund out there.
The key takeaway is that you don’t need market wizard-like timing to make money in the markets. That’s a myth.
Time in the market will generally outperform timing the market. So don’t sell your quality assets into weakness.
Of course, not every idea will work out…
Some ideas need to be sold in cases of fraud, management straying from their core business, or if a business loses its competitive moat.
In those cases, our strict position sizing rules keep those losses manageable.
My Current Strategy for Coming Out on Top
So what do you do to take advantage of the current volatility without taking outlandish risks?
Right now, the most profitable strategy I’m using with my own money is generating annualized returns of as much as 60%.
It’s rare when I can run this strategy because these types of uncommon gains come during what I call an “Anomaly Window.”
Anomaly Windows are brief periods in the market where boring blue-chip stocks can see crypto-like gains in just a few weeks.
It’s one of the few opportunities to make asymmetric gains from conservative companies…
But know this: Wall Street has no upside in telling you how to use these Anomaly Windows. So you won’t hear about it from them.
Wall Street hopes you never find out how Anomaly Windows work because they make so much money from them. The last thing they want is a bunch of “amateurs” dipping into their honey pot.
You see, despite record-high inflation and a painful market pullback, there’s an Anomaly Window on the horizon that could return 21 years of S&P 500 returns in as little as 12 weeks – all from blue chips – and it could begin as soon as this month.
It’s a rare opportunity to recapture the gains you may have lost in the first half of the year and position yourself to make much more.
But you need to act now… Because this opportunity could be gone before the end of the month.
Let the Game Come to You!