been a long time since I’ve seen you. I hope this note finds you
well. I have not been able to attend your meetings of late.
However, I have enjoyed them in the past and always learned something very
received your email this past Wednesday & I viewed your video from sometime
in the fall. I cannot even begin to tell you how heart-wrenching it was
for me to hear you explain what has happened throughout your ordeal with the
BCSC. It is so sad for me to hear and when you spoke of your son and your
mom I just lost it. My heart just went out to you. I really am so
proud of you in standing up and being so willing to give full disclosure about
it all – including the personal things. I know the members who have stuck
by you all this time really must have appreciated and further admired you for
it. I was there with you in spirit, as I had seen or heard things along
the way, but knew from my past interaction with you that there was more to the
story than we knew
know how hard you have strived to make this club the greatest thing ever and
I’m honoured to know you even within the context of such a miserable
situation. I DO know that you are tough and I do agree with your belief
in NEVER NEVER NEVER Give Up so I know that one day you will recover in all
ways. No matter what the judge says, regarding these financial ‘affairs’,
you have many friends and family who will always stand by you and in the end –
that is what is most important.
will bring you through this and the members will hold your post for you while
you have to take a step back. I’m sure Steve Hawks will help you in all
ways, as well. Just take deep breaths and know – this is all for some
purpose. You show people what honour and integrity look like – no matter
do hope I will see you again one day and that I will have the ability to
participate in one of your great investments. I’ve always been a good
judge of character and I absolutely would trust you with my money. Now I
just need enough to let you try! I’m actually getting pretty
close. Things are definitely improving.
then my thoughts are with you, Celeste and the family.
Over the last several weeks we have seen a total disconnect between
“Main Street” and “Wall Street”. With the huge surge of bankruptcies,
we will see in the coming months a massive GDP nosedive and it made no
sense why stocks continued to move up with some “bonehead” analysts even
calling for the stock market to hit new highs.
The last few days we are starting to see a sell off and other than
specific stocks that would prosper during the covid crisis it remains
most prudent to retain a huge position in cash and 5% to 10% of your
portfolio in gold.
As members are very aware, I have advocated increasing your position in
gold especially since this crisis has begun. In fact, gold has been
the best performing asset class and even on a day like today where the
Dow is down over 500 points, gold is up. In fact, all sectors are down
and the only “green” on the screen is gold and some gold stocks. For
those of you who increased your position in gold, congratulations – you
have done well and for those members who have not, it is still a prudent
investment as a hedge to protect your portfolio.
I remain more convinced than ever in gold as an investment due to the
fact the government and Fed will provide more stimulus to support an
economy battered by the virus. The Fed, in fact, announced it is
buying bond exchange traded funds for the first time ever and so – with
more stimulus members should own more gold. Today the US central bank
started purchasing shares of ETFs that invest in bonds. The Fed is doing
this to improve market functioning due to the pandemic.
Again, as a reminder – gold benefits from all these stimuli because it
is considered a hedge against inflation and currency debasement. As we
talk more about a 2ndwave of global infections this will show
strong support for gold. Gold is up from approx. $1500 an ounce to
over $1700 an ounce since the beginning of the year. If we see a
market catastrophe, I see the price moving much higher which is exactly
why all members must own it.
There is a large selection of ETFs with a focus on gold and large gold
companies to select from. Stay away from exploration companies as there
are many gold producing companies that, in my opinion, are undervalued
and exploration companies are not a risk you have to take.
Here are the key indicators that I am watching closely to see what happens in the coming months:
A vaccine for Covid 19: Lots of players
are spending billions chasing the cure. Likely not to see success
until late 2021. Even when a vaccine is found it will take a few years
to vaccinate a global community.
Fed stimulus: This is always the most
difficult market condition as it is artificially created and prevents me
from knowing what will happen. If the Fed throws unlimited stimulus at
the stock market and the economy then “yes’ we will likely see stocks
continue to sustain value but please realize this is artificial demand
and why, again, I believe gold is the safe haven. However, when stocks
move up investors tend to show less interest in gold, and this is always
a major problem that gold has – with skyrocketing upwards. I believe
the Central Bankers hate to see gold prices rise quickly as it means
less confidence in the overall economy.
Oil Prices: I believe oil remains a good
bet because the major companies cannot make money at these prices – even
after the large percentage move up in oil prices over the last few
weeks. If we see success in reopening the economy then oil prices will
move much higher; however, you know my new favorite word is “boneheads”
and I hear these idiots saying, with confidence, that in the next year
oil to be back above $100 a barrel. The odds of this happening are
remote, and the possibility of a 2ndresurgence of the virus
will continue to keep downward pressure on oil. (Billionaire Naguib
Sawiris from Egypt, is calling for oil to hit $100 in 18 months or less)
US China Tensions: Phase 1 trade
negotiations between China and America have had to adjust due to the
virus. This has caused concern that US-China bilateral relations would
deteriorate. Another trade war will see huge downward pressure on stock
prices. Trump in his typically unpredictable manner (and possibly
after a bad night of sleep) could decide to wage trade war with more
tariffs on China – which would see stock markets fall quickly.
Many retailers will go bankrupt. A
further wave of bankruptcies in airlines, oil, hotels, travel and
tourism will result in significant job losses and debt defaults. This
will impact consumer spending – which is the largest part of the US
A (likely) 2ndWave of Covid: As we listen to Covid experts every day almost all are saying there is a (almost) certainty – of a 2ndwave
in the Fall after the hot summer months. I believe if this occurs
that, this time, we will have to keep the economy open – but people will
continue to change their personal behavior and buying habits which will
gravely impact the economy with the major impact being on lower income
people in retail, hospitality etc.
Given all these “headwind” forces at play, I stick by my guidance over the last few months:
Own Gold. Up to 10% of your total portfolio.
Maintain a very large position in cash. Over 50% of your portfolio and consider higher.
A small position in oil that will likely
continue to rise to higher levels. This is a trading position in which
to take profits on gains.
At the club we will be looking at Real
Estate opportunities in the coming months; however, the big caveat will
be – if the Fed stimulus is able to prevent deflation and an asset blow
up. If so then the Real Estate opportunity may not be what we hope for –
but current owners of properties will be happy. I see commercial
real estate property values collapsing and this might be an area we look
Finally, I just don’t understand where
some so-called experts get their information from. I have never been a
fan of Goldman Sachs for many reasons, but they are expecting US gross
domestic product growth of 4% in 2021 – and are very bullish on a market
recovery. Whenever, Goldman says this to the masses I am suspect
behind the scenes they doing the opposite. Remember – they were telling
people, in the last financial crisis, to buy subprime debt while they
were selling it out the back door. Goldman Sachs is probably the best
politically connected company in the United States with countless
Washington insiders. I would love to be a fly on the wall during some
of their high level executive meetings.
P.S. There is one good thing about COVID-19 and that is the fact that
“ambulance chasers’ (personal injury lawyers) have cut down on their
advertising due to the fact the majority of Americans are driving much
less. However, I don’t see Ed Burnstein, Adam Kutner or Glenn Lerner
in a food bank lineup…….yet.
Please forward this message on through your social media channels.
In these troubled times it is good to get some great news.
The oil project is very well positioned going forward and the
TransAtlantic team stated several times that a best case scenario – is
an oil recession – which is exactly what is occurring at this time.
Like all of you, I am keen to watch the management team perform and,
unlike so many other investments, we are confident all club projects
“will see their way to the other side” of this economic hardship.
Trans Atlantic Investors,
I hope this finds you well – considering
all that is going on in our country. Since we last sent an update many
parts of American have been shut down due to COVID-19, unemployment is
at 14.7% as of this writing, and oil futures went to -$37.63 at their
lowest point. These are unprecedented times for the entire world.
We are consistently monitoring the global landscape to assure that
TransAtlantic is strategically positioned to capitalize on these events.
Below is an update on TransAtlantic, its current holdings and how Management has positioned the company.
TransAtlantic is over 99% in cash. The significance of this cannot
be overstated! Our cash buying power is considerably compounded due to
depressed energy prices. It would be nearly impossible for TransAtlantic
be in a better position than it is in right now. We are at the
beginning of an energy recession with a pile of cash ready to take
advantage of the right opportunities.
The Fund holds positions in the Keetch, Barton and York (10 wells)
fields. Last month the Texas refiners (buyers of all product) cancelled
purchase contracts with nearly all operators because of the lack of
demand for gasoline due to the COVID shutdown.
Ground based storage facilities are full with an over supply of product,
wells are being shut-in throughout Texas and rig count is consistently
dropping. This affects the wells we own positions in. The operators have
chosen not to shut-in these wells as it not economically feasible for
the long-term. Additional storage tanks have been moved onsite and a new
buyer for the product has been secured.
As stated in the previous update, Management is focused on
acquisitions of producing fields and has set aside drilling prospects
for the time being. We expect opportunities to start presenting
themselves this month and next – and for that to last for the next 6
months, possibly longer if the turmoil in the energy market remains or
Thus far, operator bankruptcies have been minimal, but as bankruptcy
filings hit their stride, opportunities should be plentiful. We have
already had conversations and/or evaluated numerous acquisition
prospects so we are in the position to respond quickly when the right
opportunities present themselves.
As TransAtlantic shareholders, you have
every reason to be optimistic about your investment. It is a rare
occasion to be flush with cash at the beginning of a recession.
Management is making every effort to wisely deploy cash in assets that
are lucrative for many years to come. Should you have questions you may
reply to this email and we can set up a time for a call. Thanks for your
Like everyone, I was suffering with the “stay at home” orders & with all gyms closed – I was unable to get my usual exercise. This coupled with a continuing heavy workload had definitely increased my stress level. Feeling stressed and out of shape I ran an ad on craigslist to hire a trainer and had many responses. The best candidate was Forest McDermott. He has now been with me for 12 sessions and he trains me 3x a week for 90 minutes each. This guy is really good at what he does ….!
As I always disclose I have no vested interest in this referral other than “you are part of my tribe” and if something works for me I share it. Forest charges $75 for 90 minutes and COMES TO YOUR HOUSE. He is professional and knowledgeable. Frankly. I am so confident in Forest that I will go so far as to say – if you are not happy, after a few sessions with him, I will cut you a refund check personally.
I often times will push members out of their comfort zone by saying “start now”. In this case, whether it is 1x a week or several times a week – start now! Health is one of the 4 pillars of the club and I want all members to live healthfully for as long as is possible. I know many members don’t live in Las Vegas but I still encourage you to look at taking such an action step as hiring someone as your personal trainer. You are all part of my tribe and I want you all to “live healthy”.
Don’t be shy if you have not worked out in years because Forest is trained to help all members. He is aware many members are over 60 years of age and this is an area in which he specializes. Below is some info about Forest and a picture of both of us after my work out with him last night at my house.
As an ACE certified
personal trainer Forest focus was mainly on athletes and bodybuilding
As a body builder he competed in a number of shows while living in
We all know that as we get older our bodies change and with that so do the
things that matter to us and our personal goals.
Becoming a firefighter and natural aging were the two main reasons he quit
bodybuilding and went to functional training.
It was with the realization that, in order to live a better life and reach his
goals, his training would have to change.
So he switched to functional training; however, his main focus for clients is
the same. That is that we should make the one body we’ve been given the best it
Forest admits that he was extremely fortunate to be the son of a
chiropractor/acupuncturist/masseuse and been exposed to a health directed
philosophy at a very young age.
Paired with a vast knowledge in nutrition and dietary needs he brings a
comprehensive plan for clients.
Having lived an extremely athletic lifestyle, he’s also had many injuries and
knows how to work with them, around them and in many cases heal them.
He is also a certified EMT and has his BLS (aed/cpr) card, so his knowledge
isn’t solely based on sports training, but also on training from the medical
Currently in the hiring process with Las Vegas Fire & Rescue his long term
goal is to work with Las Vegas Fire & Rescue, serve the community, and
continue his training for clients.
His primary training clientele are individuals like himself who are 40 and
over, actively involved in creating a healthy lifestyle and maintaining a
fitness and nutritional program that will allow for a healthy body and mind
which in turn will provide an overall better life filled with longevity and
much more active, and meaningful, years!!
From the desk of Mike Lathigee
Sunday, April 19, 2020
We are seeing economic devastation not witnessed, to this degree, in our
lifetime. GDP has fallen off the cliff. Although the Fed has flooded
the market with liquidity to avoid deflation, I am very concerned that
we will not see a vaccine any time soon. The American stock market
keeps moving up and is behaving like it is in a bubble separated from
reality and not part of a global economic system (of economic
pain). Idiots on CNBC continue to say, “buy on dips” and “great buying
opportunities”. How can these money managers make so much money and
be so completely clueless?
It is insane that the S&P 500 is now
trading at 18.5x next year’s earnings. That’s right – the market is not
even considering 2020 earnings but trading on expectations of
2021. SORRY I HAVE TO WRITE THESE WORDS, “I CANNOT BELIEVE THIS IS
HAPPENING”. Even if we were to recover, and that is a big “if”, there
will still be massive bankruptcies and unemployment will not likely
return to low levels for at least a few years. The stock market is
fully priced in a ‘recovery’ and there is no upside at all to invest at
these levels unless you are a great stock picker – which few are (most
investors cannot even read the complicated financial statements). RUN
FOR THE HILLS AND TAKE ALL YOUR MONEY OUT OF THE STOCK MARKET!!! THE
RISK/REWARD IS TOO HEAVY ON THE SIDE OF RISK!!!
The only consideration for staying in the
stock market is that the Fed keeps printing money and they may soon
start to buy stock. If this is the case then we could see higher stock
prices but I would not want to take that gamble and I think Small
Business America stimulus should take priority over the “Wall Street
The Fed might be successful due to the
fact it has an unlimited budget to print money. Last week it was buying
ETF’S with exposure to the Junk Bond Market. That is right, the Fed was
buying JUNK BONDS and once again bailing out the superrich while Small
Business America (SBA) loans run out of money with only a fraction of
the businesses getting funding.
Remember members I have been SCREAMING
FOR 5 YEARS ABOUT THE SHARE BUY BACK SCAM! I now only hear commentary,
on a regular basis, about this self-dealing form of
racketeering. Very few people were talking about this situation for
the last several years – but this was a common theme of the Investment
Club of America.
Then in January I did the Annual Outlook
Presentation at our monthly club meeting and I said GET OUT OF THE STOCK
MARKET COMPLETELY. It was a 90-minute presentation and I talked about 3
reasons why we could see a Recession. I said a Recession was unlikely –
but more likely than anyone else around the world is talking
about. Further, I have been also SHOUTING BUY GOLD, BUY GOLD, BUY GOLD,
and that has been the number one performing asset class over the same
time frame since the club meeting in January.
Money managers are still making tens of
millions, or more, even with poor results! Bloody ridiculous
system! At the same time these bastards enriched themselves with share
buybacks and used all the free cashflow of the companies they were
running. Now they have their hands out for government bailouts. Just
look at the top 6 airlines using more than 98% of their free cash flow
on share buybacks and then, when the pandemic hit, they have no money in
their coffers and ask the American Tax Payer for $60 billion (to start
and more later). I say “let them fail” and the American Tax Payer
should receive equity at today’s valuation for any money given to these
companies. You will be sickened if you look at the massive bonuses (in
the hundreds of millions) these executives, at the major airlines, took
over the last 10 years and of course none of that will be liquidated
for their irresponsible management decisions.
The probability of a stock market
collapse is higher than it has ever been. As I said in a blog sent
last week – you can “trade” this market but being “long” you will have a
high probability of being wiped out – with the exception of gold.
If the virus is not contained and the
economy is reopened – only to be shut down again – the Fed will have no
tools left in its arsenal AND WE WILL SEE A DEPRESSION that will be the
GREATEST DEPRESSION EVER! Again, own 10% precious metals in your
portfolio and hope that it does not move up too quickly as that will
likely mean a collapse of almost every other asset class.
Yes, let me write it again, I am saying –
buy gold – but hope it does not go up too quickly as that means all
other assets have collapsed. Remember it is an insurance hedge for your
portfolio and now you need that more than ever!!
A few weeks ago, I suggested an oil trade
that did very well and then in a subsequent blog I guided members to
take profits and move on. I am watching oil closely as no energy
companies can exist with oil prices this low. There will be many
bankruptcies and in 2 or 3 years I believe those who invested in the
best oil stocks will see triple digit gains.
Investments in oil at these prices are
attractive – but individual stocks are still too risky. Eventually oil
prices will rise, and the best capitalized, best run companies will
My most important guidance however,
besides OWNING GOLD is to “hoard cash”. There is going to be
tremendous opportunities in many asset classes especially Real Estate as
the Asset Bubble has blown up. So, Hoard Cash!!!
I am also closely watching Insider Buying
and Insider Selling Reports. This is not the only tool that should be
used when trading, but it is very important. When I see a CEO “buy” or
“sell” a massive stock position it gets my attention to do some
I am writing more than ever in the history of the club because we cannot
have club meetings. This is the way I am staying connected to “MY
TRIBE”. I care about the membership and know I am doing all I can with
all we are involved in to ensure we get through this. I believe we are
much better positioned than the vast majority of small businesses.
P.S. Members if you find this info useful
please post it to all your social media platforms. We think our
message is important and the proper guidance that investors need.
Please see link below for easy posting?
Finally, I just do not see how we are
able to completely get out of this catastrophic situation – with so many
other countries around the world unable to control the virus. Brazil,
Indonesia, Thailand, Nicaragua, and many countries in Africa to name
just a few. Will the United States have to close its borders until
there is a vaccine because visitors from these countries will not have
proper safeguards in place? We shall see – but in our hometown of Vegas
we are unlikely to see many international visitors for at least a year
and I believe Nevada may see a set back that hits us harder than the
‘Great Recession’ of 10 years ago.
Members I start this update with sad news. Freedom fighter, Marcus Mumford, who spoke at a club meeting, a little more than a year ago, has died suddenly (yesterday) at the age of 48. Marcus fought successfully against the unlimited resources of the Federal Government. He defended clients in three cases in a row against the Federal Government – and won. The Federal Government wins 98.6% of all its cases and it was statistically less than 1 in one million that Marcus could accomplish such a feat. Marcus had an uncontrollable stutter which made such an accomplishment even more impressive. After Marcus’s success, the Federal Government worked hard to have Marcus disbarred from practicing law, on unfounded accusations, and were successful against him in a few States. He died an American hero standing up to the tyranny of the injustice that exists in our judicial system. REST IN PEACE MY FRIEND – YOU WERE A GREAT AMERICAN!!!
I spoke to a club member who, like many of you, is also a friend. He
said, “During this pandemic, in the real world – people are dying, in
the real world – there are unprecedented bankruptcies. It makes no sense
that the stock market continues to move up – disconnected from reality”
He is right! The stock market continues
its almost daily rally as if the coronavirus will quickly pass and the
economy will recover in short order.
There are too many unknowns that
investors are not factoring into stock investing at this time. The
market has retraced approximately 50% from its lows. Earnings season
is fast approaching and the results will be catastrophic. Today Apple
led the stock rally – yet there seems to be no consideration for a
consumer that has been gravely hurt or is unlikely to pull out his
wallet to buy the latest version iphone. Do you think Apple will sell
many iphones to India – which has been completely on lockdown for a few
weeks? Yet I hear “money managers” say that now is a good time to buy
Apple. Complete Idiots!!
Day trading and swing trading make sense to me and I believe there is a lot of money to be made. Most people are not trained in these skill sets so this is not a strategy I recommend to members unless you have experience. Investing for the long term at this point could work but only because the Fed has moved its 2009 philosophy from “Too Big to Fail” to its 2020 philosophy of “Nothing will Fail”. In other words, the Fed has decided to flood the economy and force feed as many dollars into the market as is necessary.
Today I watched on CNBC (sorry to admit that sometimes I watch this station …. long explanation and members have often heard me voice concerns). The CEO of Cheesecake Junior Restaurant in NYC received $5.5m in PPP Government Loans. The CEO was asked if he was going to pay his staff as per guidelines of the loan and he said “no”. He said he would use the money for necessary steps to reopen the restaurants and would only start using it for payroll purposes once the restaurant was not only opened, but guests were returning at previous levels. In other words, “ I will do what I want with the money and not what the government tells me to do” This was a tell tale sign that the government is handing out money with guidelines that a large number of businesses will ignore and I am sure the comments of this CEO unintentionally convened fraud.
this time anyone buying a “long position” in the stock market is
gambling. There is a good chance, due to the Feds nonstop running of
the printing press, that it will “fool” investors into thinking that we
are returning to the glory days of another secular bull market with low
interest rates and companies using most of their free cash flow for
share buybacks – but there is one consideration every investor must heed
and that is – if we “reopen the economy” and the pandemic reoccurs with
another shut down – the Fed will no longer have any tools left and all
asset classes except gold will collapse.
For the last few years, I have been urging members to hold a position in gold. The last few weeks I have been “pleading” with members to take a position in gold. Those who listened have now invested in the top performing asset class during this same time period. I recommended members buy physical gold and silver in the past – unfortunately that is no longer possible as any dealer I have contacted is “sold out”. So that means the best way to own gold now is through an ETF – as most investors are not equipped with the skill sets to analyze individual companies. GDX and GLD are two options for ETFs. For Canadian members the best option is CEF where you can actually take your position in physical gold and Sprott Assets Management is a company I respect in this industry. I know I just said for members not to buy individual companies but Barrick (symbol GOLD) is the world’s largest gold producer and PanAmerican Silver (symbol PAAS) is one of the largest silver companies and I have confidence in both these companies. I mentioned these companies only because I know members will ask me. So members the guidance I have given to guide you through the last several weeks has been accurate. I know that all that matters is results and my guidance has shown to provide the best results. At the January meeting when no economist, financial analyst, media etc was discussing a possible Recession, I discussed for 90 minutes on stage at that meeting three ways a Recession could happen in 2020. I told members to take gains and lessen stock market positions to a small position or completely liquidate. Those who followed reached out and have said “thank you”. Some did not and all I can do is deliver the message. AGAIN, THERE WAS NOT A SINGLE ECONOMIST TALKING ABOUT THE PROBABILTY OF A RECESSION IN 2020 BUT AT THE INVESTMENT CLUB WE DISCUSSED THIS IN DETAIL AND TOLD MEMBERS TO PREPARE. A few weeks ago I wrote in several articles to OWN GOLD, OWN GOLD, OWN GOLD. Some listened and some did not. Gold has been the top performing asset class and again I am saying OWN GOLD as insurance for your portfolio and bring the position to 10% of your net worth – up from my previous guidance of 5%.
Here is the outcome I see in the economy:
The Fed will take all steps to ensure we
don’t see deflation. The Fed has bought tens of billions in Municipal
Bonds, Assets Backed Securities Etc. If the Fed is successful, which
has a high probability, then we will see a recovery in the stock and
bond market but not based on true fundaments but rather massive
liquidity injection. God help every owner of assets if the economy
reopens and then the coronavirus reoccurs without proper testing in
place. We will see a DEPRESSION and the Fed will have no tools left.
So it is likely the Fed will be successful and all assets classes will
rise but if the Fed is not successful then all asset classes will fall
and the lone survivors will be those who held gold. As I have told
members many times – if gold were to increase to $5000 plus per ounce
that only means all your other assets have collapsed. Real Estate,
stocks, bonds etc. Do you now understand why you must own Gold and to a
lesser degree silver?
Members – What strategy am I am looking at for the club members to
prosper in this environment? For those who recall 3 years ago I
debated with the CEO of Boyd Gaming, Keith Smith (who spoke at our club
meeting) – stating that the economy in Las Vegas was not diversified
enough and would again lead the collapse of all States as the economy in
Nevada is based on consumer discretionary spending. He went on and on
about how the economy was diversified and Nevada was now in a strong
position and I held steady and respectfully said he was wrong. Now
all reports coming out are saying Las Vegas will be the hardest hit city
in America with the highest percentage of unemployment claims etc.
So here is the opportunity as long as the
economy does not shut down again. EVERYONE HOARD YOUR CASH! CASH IS
KING! Unless commercial and residential landlords are bailed out – by
the Federal Government we are going to see very attractive cap rates
again – similar to 2010. There will be a glut of properties hitting
the market. We will consider a Real Estate Fund when the timing makes
sense and see how things unfold but for right now HOARD CASH, HOARD
CASH, HOARD CASH and get ready to mobilize funds for the coming
Yes you can “trade” in the stock market but don’t take any “long
positions” Don’t listen to money managers as they are always motivated
by “money under management” and 99% of them have caused you massive
damage by their “buy and hold strategy” in the last several weeks. I
have said too many times, “these people are the most overpaid,
undertalented so called professionals in the World.” I don’t know who
I despise more – money managers who can make tens of millions while you
lose money or lobbyists on Capitol Hill who act like sociopaths – with
no consideration for the American people!
Members – there is no “sugar coating” I call it the way I see it!!
Caveat: Members, The current economic
retraction will be the worst since the 1930s but the Fed is fighting
hard. Even with the force feeding of money by the Fed it is likely
inflation will remain close to zero. This is a fact that works against
gold, but I remain bullish. The main catalyst that will propel gold to
much higher levels will be a much lower US dollar and again, because
the majority of members hold all their assets in US dollars, gold has to
be used as an insurance hedge for your portfolio.
Conclusion: Members, if you
buy gold and it declines that is fine because it likely means the rest
of your assets have maintained their value. However, if gold increases
by several hundred percentage points then it is likely all your assets
have collapsed in value and this is exactly why you need to own it as
insurance for your portfolio.
I have come back from a long day of
meetings having been updated on what is happening in the economy. I want
to encourage members to increase their position in gold and silver to
10% from my previous guidance of 5%.
For those who followed this guidance – gold futures are at a multiyear
high today and I am glad you followed this guidance. For those who
followed my guidance (from my writing of 2 weeks ago) by buying an oil
ETF – you have outperformed the markets by a wide margin. At this stage
it would be good to take the profits on this trade, which are
significant, and move on – as the risk/reward is no longer worth holding
Given the fact that it is hard to purchase physical gold and silver at
this time, as all the mints are closed around the world and dealers have
little physical coinage on hand, investors are left to buy “paper” in
As members are aware, I have always advocated possession of physical
gold and silver but that is not possible at this time. Physical gold and
silver are now trading at a large premium to the actual spot price –
which is very bullish for gold and silver. For example, an American 50
cent piece spot price is approximately $5.5; however, right now –
dealers are selling it for $7 plus.
I believe the Fed, with its mammoth stimulus package, will “print all the dollars necessary” to save the stock market.
(I am sure Trump and Powell are best buddies now!)
The Fed Head, Powell, actually said in an interview today that
“inflation is not a concern” and the Fed will buy all assets backed
securities that require support. As a result, the Fed has indirectly
opened the flood gates to much higher gold and silver prices.
I believe with the unlimited printing of
paper money that the stock market will now be “saved” but it will come
at a price of less confidence in “fiat” currencies.
Every Federal Reserve Bank is following a similar path and it is
inevitable that gold and silver move up. Those who were buying prior
to the Fed Head interview today and ‘gambling’ – frankly you gambled
right – but you were speculating and it was not based on any economic
data and it was at best a 50/50 crap shoot.
All I can say is if you were buying (the last 3 days) you were lucky
that Fed Head “saved your ass” because there was no economic data to
support going into the market, and taking a ‘long’ position, until FED
HEAD, Powell’s update.
Today the Fed announced another 2.3
trillion dollars stimulus/lending program to support US states and
cities ravaged by the coronavirus. I just cannot see how this
gargantuan force feeding of money into the market cannot cause inflation
and in turn – higher precious metal prices.
Disclosure: I have no personal benefit by
giving guidance to members. I could be wrong! I am writing this
because I know to date a minority of members do not even have any
position in gold and silver and I am following up to encourage members
to use the catalyst of today’s FED announcement to take at least a
position in gold and silver. Talk to your financial advisor or you can
buy an Exchange Traded Fund like SLV or GDX. Individual stocks have
more inherit risk but Barrick is the worlds largest gold producer and
trades at only 8x earnings. For silver stocks, Pan American Silver,
is one of the largest silver producers in the world and has lots of cash
in the bank, proven reserves and a world class management team.
Again, I have no personal benefit for any guidance given other than – this is the way I see it ….
In the past I have always told members
that precious metals are simply a hedge in your portfolio in the event
every other class falls due to a catastrophe – such as a collapse in the
However, it is very possible, with the
Fed prepared to buy almost every type of security, and there is even
talk of the Fed buying stocks, we could be in a very rare situation that
all assets classes move up. But gold and silver will out perform
because gold and silver are priced in US dollars.
Don’t overdo it with silver and gold and
again 10% is certainly overweighting which makes sense, at this time for
your portfolio. I know the vast majority of members, over the last 2
years, have bought gold and silver (through the many interactions I have
had with them) but if you don’t have any gold and silver – this is
definitely time to take a position to protect your portfolio.
Finally, members, the information I am sharing – is about trying to help “my tribe”. I ask that you share this narrative on your social media in hopes of helping others. Below is the link.
Members, The club guidance has proven to be accurate.
For example, the oil guidance has already proven to be a strong “win” for those who executed the trade. But remember – this is a trading market and taking quick profits and getting back into cash is a prudent strategy.
For the most part it does not yet make sense to sit “long term” in any position until we have more economic indicators. Beyond comprehension is listening to money managers (the last few weeks) as they discuss buying stock positions on dips like Apple – when a huge part of the world economy is shut down!
As I have said many times before “Money Managers are the most overpaid, undertalented, “professionals” in the workforce and the vast majority of their guidance over the last several months would have left you reeling with heavy losses.
Remember at the club meeting in January the discussion was: The market is overvalued. No one was talking about a Recession then – but we discussed 3 ways a Recession could occur and the guidance that night (and the last 18 months) has been to have little (to no) exposure in the stock market. We are not trying to “toot” our own horn but we are saying that the club presents guidance that, more often than not, is not available in the popular media .
One of our objectives is to grow the club and we ask that members consider forwarding a few posts (below) – on social media & help the club get more exposure.
March 31, 2020.
I received more feedback after yesterday’s narrative than any other one I
have written. There were many comments and the number one question was
– Is there anything that can be done, in the market, to make money?
– or another way of putting it – Does any trade make sense right now?
I am not a licensed advisor and I have no benefit personally from what I am writing – you could make or lose money
but here are my thoughts….
The Fed is flooding money into the market to save the economy. There
is no limit to the amount of money that will be printed to create
liquidity and prevent deflation. If they are successful the market will
fully recover and the bull market run will continue.
The stock market is a future prediction of where the economy is
heading (generally) in 6 months. The market seems to be betting on
recovery and I just don’t know. If an investor bought a Dow or Nasdaq
index fund it has already moved up considerably since its lows so the
opportunity is missed. However, if you want to “play” the market more
conservatively then a good strategy is to buy an oil index fund that
moves up as the price of oil moves up. Oil is close to an 18 year low
and it could certainly move lower but I believe the risk/reward scenario
makes sense at this price. Therefore, if you believe we will recover
and wish to make a more conservative bet – then a bet on oil, I believe,
has limited downside and if the economy improves in the coming months
it is highly likely to see much higher oil prices – and your investment
has done extremely well
(with, likely, large double digit gains).
Again the risk/reward scenario with oil makes sense to me because
“the bad news is priced in” and it has not yet moved upward like the
general stock market from its lows.
REMEMBER THERE IS ALWAYS RISK AND YOU COULD LOSE MONEY.
DON’T GIVE ME PRAISE IF YOU MAKE MONEY ON THIS – AND DON’T BLAME ME IF YOU LOSE MONEY ON THIS.
SET A 20% STOP LOSS OR WHATEVER YOU ARE PREPARED TO LOSE.
For full disclosure, for reasons members are well aware of – I don’t
have a brokerage account and, although this certainly is a trade I would
do, my personal situation does not allow me.
March 30, 2020.
“Confusion” that is the word that I am using to describe the stock
market today. Things are making no sense to me with the way people are
investing right now. It is apparent that the Coronavirus impact on the
economy will be much more dire than anyone originally thought. I am now
hearing the impact could be 25% plus downward pressure on GDP. Despite
this the DOW soared 700 points today which is normally a forecast
prediction of what is happening in the economy 6 months from
now. Obviously, there are large institutional players who believe we
will see market recovery. Or maybe the Fed is involved, behind the
scenes, taking all the action it can to ensure stock buying happens? I
think we could start seeing, in short order, the Fed Reserve passing new
regulations that allow it to buy ETFs – thereby supporting the stock
market. It is already buying asset back securities, at book value,
where the asset is not worth nearly the amount the Fed is paying for
it. Who else would buy Municipal Bonds now except the Fed – at full
paper value? Of course, we as tax payers (as always) are on the hook.
I think this is possible … that the Fed could print money
continuously at levels no one ever would have imagined in the coming
weeks and months. I think we could see $10 trillion or more in
stimulus – and much of this is due to the Fed’s fear of deflation. No
politician will ever step in the way of government spending as they
don’t get reelected and – like the Share Buy Back Program – everyone
loves it until the unintended consequences happen. The American day of
reckoning will occur when interest rates rise and one day they will and
almost all tax dollars are used to pay for the debt and there will be
no money for healthcare, infrastructure, defense etc etc etc.
I am starting to think that a good strategy is to devalue the dollar
by printing endlessly and therefore 30 trillion in debt is worth much
less because the dollar is worth only a fraction of its previous
value. The US dollar is the Reserve Currency and the economic system
would collapse if the US dollar collapsed; however, the Fed is fighting
against Deflation at all costs and will print money in an unprecedented
way to ensure the battle is won. Also, there are too many
stakeholders, around the world, that will ensure the US dollar does not
As Americans I am sure we should not hold all our money in US dollars
– but, other than Gold and Silver, I am not sure where else to
diversify at this point – but will keep you posted. Other Fed Reserve
Banks are always printing non stop to prevent a deflationary cycle but,
all combined, not even close to the US Federal Reserve.
Although the Saudi Arabia/Russia oil negotiation breakdown had an
effect on oil, it is not the sole cause for oil to be at under $20 a
barrel today. This is an 18-year low and the oil market is behaving
more like what we would expect and that is the fact that – there will be
a massive decline in oil demand due to a predicted Deep Recession by
the oil market. The oil market is behaving like we are going into a
very deep Recession and the stock market is behaving like “this is a bad
snow storm” – that will pass quickly.
Shockingly, despite all the bad news about the Corona Virus that
includes nations around the world (that will not be able to mobilize to
fight against it – because they have no budget to do so) or countries
like Brazil where the President said, “People will die but we are not
shutting down the economy”. We saw gold and silver show weakness
today. Again, this makes no sense – but I can tell you that the last
thing the Federal Reserve Bankers around the world want to see is the
price of gold skyrocketing as that would mean a total lack of confidence
in Fiat Currencies and a possible total breakdown of the economic
So, what to do. I stick by what I have been saying:
Hold at least 25% in cash. CASH IS KING RIGHT NOW! The asset
bubble is likely to blow up unless the fund keeps flooding unlimited
dollars – which it intends to do. Not sure what will happen but those
buying Real Estate, stocks or any other asset right now are playing a
high risk/reward game.
Make sure gold and silver constitute 5% plus of your total portfolio – as an insurance hedge.
Don’t jump into the stock market because there are few economic
indicators available (and investors are buying blindly with no updated
economic information) It is possible the stock market could continue to
make gains as the Fed runs the printing press nonstop – but we could
also see a massive sell off on the DOW again – of a few thousand plus
points or more. No one is saying it, but if the Fed does not win
against Deflation, we could see a DOW under 15000. I don’t like these
odds of investing in the stock market right now – as there are not
economic indicators. This is the reason investors should sit on the
sidelines, in cash, until we have more information.
One other important point is the volatility index is over 30. That
is sky high and buying stocks today is a “crap shoot”. At the very
least if you are buying stock ensure you have stop losses in effect as
things can turn very quickly.
So, waking up tomorrow we could just as easily see the DOW up 1000
points as down 1000 points. I live in Vegas and even I don’t like those
odds. Govern yourself carefully!
While events continue to evolve – at an alarming rate –
conveys his uniquely candid perspective
elaborates on the state of affairs
as of March 24th.
on his undertanding – at the time – he looks into the near
mid term and provides possible
in some cases probable) eventualities.
I believe the (most) material update over the last few days is the fact
that the coronavirus is showing no signs of being able to mutate
quickly. My greatest fear was that – over the next year to 18 months a
vaccine is created but the virus mutated to a point where that the
vaccine does not assist us and we are back to step one again with a new
pandemic and a much deadlier mutation.
All viruses evolve over time, mutating as they replicate (imperfectly)
inside a host’s cell in tremendous numbers and then they spread through a
population, with some of these mutations persisting through natural
selection. More good news is that the virus appears to be the same as
when it started in China. Therefore, it appears a developed vaccine
would be a single vaccine, rather than a new vaccine every year like the
flu vaccine. However, we are (according to all scientists) at least a
year – before a vaccine is developed.
It is likely the high number of deaths in Italy is because of
situational factors, such as an older population, hospitals being
overwhelmed, shortages of ventilators etc. rather than a
mutation. This is heartening news, especially given that other viruses
can be quick to mutate – such as the common flu – which is why a new
vaccine is required every year.
This information was not available during the last economic guidance I released and therefore I would like to update: – due to the fact that the virus will not mutate I am confident we
will not enter into a Depression. If the virus could mutate, I believe
the economic system would shut down again and all the economic stimulus
(by the Feds) would have been to no effect and we would have an economic
collapse without the Feds in a position to assist. With no liquidity we
would see a Depression that no one alive has experienced unless you are
approximately 95 years old / plus.
– I did say hold 50% in cash a few days ago and that is still a
conservative approach but now with the confirmation that the virus is
not mutating it is ok to lower the cash holding but at the very least I
would hold 25% in cash and remember “US DOLLARS” are a prudent holding
at this time. I believe we are definitely going to see a Recession and
the big question is how long will it last?
– I still believe members should hold 5% in gold and silver. Physical
gold and silver are very difficult to buy and I have now verified this
with a few people in the industry – so you are stuck with
buying stock. To keep it simple – buy sliver and gold ETFs. Again, if
the economy rebounds and we don’t see another business lockdown in the
coming months it is likely gold and silver will “go nowhere” but at this
point you are only buying it as an insurance hedge for your entire
I believe eventually we will see a positive turn around due to the
fact that the Fed is throwing unlimited stimulus at the economy. The
big question will be the impact of massive unemployment and huge numbers
of corporate bankruptcies. For sure we will see a Recession even
with all the Federal stimulus and if you did not capture the huge gains
over the last 3 days be wary to jump in thinking we will quickly move up
to the stock market highs of a month ago. I think it was obvious
that Boeing and the airlines would skyrocket with a bailout and told
many people this; however, right now the risk reward scenario is too
high to “jump in” without having more economic data.
Remember most of the economy is still shut down (India has 1.3
billion people under lockdown). All of this will have huge consequences
on the earnings of large corporations especially those who have a large
export segment to their revenue.
P.S. I am having difficulty understanding social distancing. Today I
drove to my local grocery store on Farm and Durango in Northwest Las
Vegas. Along the way Loews was packed (more packed then I have ever seen
it – is everyone doing home improvement projects?) and the daycare
center which is exempted from lockdown had at least 30 young children
playing outside with several adults watching them. Then last night I
went to the park with my son Conrad and the park was closed until
further notice. A park is an area where you CAN maintain social
distancing. Where is the logic to all of this? You can’t go to an open
air park but you can go to a packed Loews Home Improvement store?
P.P.S. As well – I am not sure how the virus will be contained in the
months ahead when many poorer nations have still taken no steps to
contain the virus and don’t have the financial resources to do
so. America, over the months ahead, will get control of the virus but
how will they deal with international direct and indirect flights from
countries where there are no safeguards in place. Again I think it is
far to early too think we are through this – but the stock market sure
is behaving like the “party is back on”.
I want to guide members to be very careful in the markets. The last few
days are a result of optimism over the stimulus package that has been
communicated by the White House and Fed as:
“We will throw everything at the economy to restart it” .
It is very possible we could return to
another secular bull market that lasts for many more years and we could
see new highs. However, what happens if we throw all this stimulus into
the market and in the Fall we have another breakout of the coronavirus
and have to shut down parts of the economy again or shut down the
economy entirely? That means the stimulus was a waste of taxpayer money
and the country will have a debt that we will never be able to pay our
way out of. We go 100% into a Depression as the Fed has no more tools.
If they flood with more stimulus then we are starting to look like
Venezuela and Zimbabwe.
This will become a whole new level of fiat currency.
My guidance to you is – it is ok to
play/invest in the market but do it with a much smaller part of your
portfolio. The markets are not reacting in a manner that indicates
the asset bubble has blown up; however, that may be the case. Make
sure to own, as an insurance for your portfolio, at least 5% in gold and
silver and if possible own physical gold and silver. If not simply buy
the ETFs of SLV and GLD. As I said on the webinar last night I am
getting reports investors are finding it very difficult to buy physical
gold and silver. If they can find physical gold and silver they are
paying a premium over the spot price in the market.
If you really want to be conservative and
be prepared for risk then own 50% of your portfolio in cash. US
dollars despite the nonstop printing by the Feds is still the best
currency to remain invested in.
The battle in the market is the Bulls
versus the Bears. Over the last 2 days the Bulls are winning. The
Bulls believe unlimited funds flooded to buy all asset backed securities
and municipal bonds, bailout out small and large businesses and
throwing all levels of financial assistance to the American worker –
will keep the party going.
I am siding a little bit more towards a
Bearish outlook that the coronavirus is not going away any time soon and
once earning reports hit, unemployment skyrockets to the millions and
other countries are not buying American goods because they are in
lockdown we will see another major sell off in the market. I certainly
could be wrong but don’t get too confident in the last 2 days of market
euphoria. Take some of your money off the table especially if you have
made profit in the last 2 trading days.
of America (ICOA) unanimously demands Congress to cease bailouts. While
the economic effects of COVID-19 are not lost on anyone, those effects
are especially not lost on ICOA. To date, this group of primarily
accredited investors has invested over $30M in over a dozen small
businesses, all of which are currently being harmed by the virus that
has decimated the global landscape. It is from the perspective of those
harmed that we demand Congress to cease any discussion of a bailout to
any airline that has participated in share buybacks for the past five
The Big Four Airlines
The main offenders to the above proposition are Delta, American,
Southwest, and United Airlines, collectively spending $39 Billion on
share buybacks to artificially increase their share price, triggering
millions in executive compensation and bonuses. These businesses took
part in informal collusion to keep their cash positions low (97% of all
earnings were used for share buybacks or dividends), knowing that if the
market took a drastic turn, their elastic industry would be the first
to take a hit. The purposeful nature of keeping low cash positions in an
elastic sector was not one of negligence. Airlines know that they will
be bailed out by a government that fears their power over the consumer.
ICOA urges Congress to understand what the airline industry is doing and
allow the free market to replace these business practices.
The Worst Offender – Boeing
If we accept the rational position that the big four airlines cooperated
in something between deliberate manipulation and negligence, there is
no room for a counterargument from the worst offender Boeing. Boeing is
standing on the following proposition for their request for a bailout:
Do not touch our dividend or executive payment structure because we
would much rather use bailout money.
Boeing is conducting an internal Ponzi scheme, and the Fed gets to fund it.
Within the lack of transparency regarding Boeing’s current request for a
$60 billion bailout, Boeing has made one thing abundantly clear; they
will not be cutting their dividend. Boeing is borrowing against their
high credit rating to support their unsustainable dividend, which in
turn supports Boeing’s unrealistic share price (multiples compared
across the industry), which, finally, in turn, supports Boeing’s
staggering pension fund. Operating in this fashion is akin to building a
financial house of cards. Over the last six years, Boeing has returned
over $60 Billion to their shareholders and executives through share
buybacks and dividends but now expects the American taxpayer to pick up
the tab when they have failed to create value for any party involved.
At the very Least Take an Equity Position
If Congress goes through with the various bailouts, ICOA urges the
Federal Government to make the offer in the way of a position that is
convertible to an equity stake. Not only would this position allow the
taxpayers to profit off of the money they are bailing the airlines out
with but would also enable the government to establish a precedent that
there is a monetary price to pay for treating the American citizen
like a bank account.
Investment Club of America
For an response, inquiry, or rebuttal please respond to the Mike Lathigee (Chairman@highmarklv.com)
or Evan Dotta (Evan@VentureFit.com)
You can bet 100% that Lobbyists on Capital Hill are working around the
clock to ensure their needs are met. They are putting enormous
pressure on their Congressmen (Lackies) – (whom they have promised jobs
when they retire) – to do what they say.
You can imagine this institutionalized corruption will come at
an enormous cost to small business in America – they getting only a
fraction of what is necessary – to survive.
I am betting once again the larger focus
of career politicians will be on keeping those companies happy that pay
for their re-election – and all other interests are secondary. After
the bailout these executives will get to keep their private jets and
beach homes with this massive injection of bailout money and continue
the system they control and abuse.
I hope we have enough non corrupted
politicians on Capital Hill to put Small Business first on the bailout
package but unfortunately I see, in the end, an outcome that we, as
taxpayers, will be again outraged by the “well connected” coming in
Look – I am writing a prediction before
the bailout package is released but remember I also talked for 90
minutes at the January Club Meeting about a Recession in 2020 and how it
I did not hear or read anyone else talking about that either.
I said in January — sell off your stock positions heavily as we are in an asset bubble – some listened and some did not.
Once again – I am just preparing members for what I think will happen.
If you want to “Make America Great Again” then outlaw lobbyists and
throw them all in prison.
As taxpayers we must be outraged at what is happening with the bailouts
that are about to occur. Please post this link to your social media
site as it calls for specific action steps that we as taxpayers demand.
In this 300 page book Mike Lathigee gives a scathing overview of how the financial services industry bullies and misleads investors. It is a must read for any investor to be informed on what is really happening.