The markets have been doing well. The S&P 500 has now soared beyond the July highs of last year. As I said before, I wouldn’t be surprised to see the market shock us with gains in the short term. But don’t be so quick to think that everything is back to normal. Things won’t return back to normalcy for a long time. There is going to be some major economic restructuring around the world before we can expect a normal market.
The world is confused. The world is overleveraged. And the world continues to explode with new supplies of fiat currency. What’s next?
The New Year has begun and we’re off to a good start. While worldwide economic health remains in limbo and European woes remain, there is a great chance the first half of this year will surprise us…
It’s no surprise that we’re seeing more sell-offs. Last week, I ended my letter telling readers to “Protect (themselves) from inflating currencies: Buy gold.” Without a doubt, the biggest headline in the investment world this past week was the big gold and silver selloff. So was I wrong? Was telling my readers to buy gold the wrong thing to do?
There’s no doubt that markets will remain fragile. Every ounce of optimism has been retorted with pessimism. Once again we saw how volatile our markets. While it’s easy to find many stocks that are now significantly undervalued, it’s becoming much harder to pull the trigger. Most of the professionals in the industry have already taken an early Christmas holiday. Bid support on less liquid exchanges, such as the TSX Venture, have dwindled dramatically and companies that once traded millions of shares per day are now trading a few thousand here and there.