The promise that excited U.S. investors since November was that President Donald Trump would produce an environment that was pro-business. As mentioned in my last work, the enthusiasm since the presidential election may have faded as Mr. Trump wrestles with his staff as he flails at meeting his campaign promises. “There is a bubble in everything. Nothing in asset price is very low,” said Marc Faber, managing director of Marc Faber Ltd in an interview on CNBC, May 31, 2017. Faber went on to say, “We are somewhere between 1999 to 2000,” when he reminded listeners of the tech bubble and the severe losses that resulted. “One day this bubble will end. When that happens, people will lose 50% of their assets.” As far as President Trump is concerned, “I don’t disagree Trump is good for the markets and economy, but some of his statements and actions are not favorable for the U.S.,” declared Faber.
It didn’t seem that anything would make Faber become bullish on the U.S. economy. No one can see the future, including Marc Faber, but it is reasonable to this observer to prepare as if the worst case scenario was about to unfold. That way you might be able to tell your story no matter what happens. After all, I am convinced we all want to live to tell our stories as opposed to others talking about us after we are gone.
I am fond of saying, when crossing the street it’s typically not the bus you see that can disrupt your day. It is more often the case that you didn’t see the bus, could not time the bus, and could not name the bus until after it kept you from having a nice day. That said, there is a bus that you do see that seems to be moving erratically. “He has the impulse control of a grease fire. And he certainly can’t admit when he’s wrong, even though he changes his mind on one policy or view after the next. There’s something disturbing about that. More disturbing than Richard Nixon’s paranoia that led to the Watergate scandal,” said Harry Dent about Donald Trump.
Tony Schwartz, co-author of ‘Art of the Deal’ said. “Trump will resign, then declare victory,” on CNN, May 31, 2017. You ask why does this matter. One of the reasons I find Dent Research worth paying for, reading, and studying is while the securities industry would have you believe it’s all ‘a random walk on Wall Street’, Dent identifies patterns that may repeat themselves. Andrew Pancholi is well known at Dent for hisThe Market Timing Report and he has a 45 year cycle that seems to correspond to Watergate, back in 1972. Dent put it this way, “Trump is making an enemy out of the media. Yes, reporters, journalists, and all the other talking heads have their flaws, but they’re more objective than the President! If there is any ‘fake news,’ it’s coming more from him. He fires anyone that may come against, him like Comey at the FBI. That was not a smart move by any political calculation.” I am certain you remember Watergate. Do you know who was the anonymous whistleblower, “Deep Throat”? He was FBI special agent William Mark Felt, Sr. who retired as the Bureau’s Deputy Director in 1973. After thirty years, Felt disclosed that he was the source in 2005 which was long after making reporters Carl Bernstein and Bob Woodward famous. Born in Idaho in 1913, Mark Felt passed away in 2008 at 95 in Santa Rosa, California.
Harry Dent went on to say, “If you follow Trump down his rabbit hole, you’ll find yourself in the middle of a snow storm with nothing on but your sunglasses! He has ‘Reagan-like’ supply-side policies, not only for the U.S. and world economy, but even for China, a country with excess capacity (supply0 to last for more than ten years. His tax cut plans will only benefit the rich, business owners, and the corporate elite. His repeal and reform of Obamacare has been a disaster. His tax cuts and de-regulations are looking questionable and the Russian collusion issue looks worse every day. He’ll never pull off the 3% to 4% sustainable growth he’s promised, even if he cuts taxes and regulations to zero. It’s simply demographically impossible.”
On February 2, 2017 I said, 24 hours before I saw Glenn Beck say on CNN about this President, “We must be vigilant!” This is a true statement for investors as well. Do not be lulled into a false sense of security. Retail investors as well as companies need different strategies for changing economic environments. If market gains were a very pleasant surprise as my fellow Gemini, Donald John (Wayne) Trump came into office, his removal or resignation from the White House may be more shocking for markets (investors) to the downside. Act as if the grits hit the fan within twelve months.
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