Insider
by
Chris Martenson
Executive Summary
- China’s critical role in keeping the party going (and why China is in a weaker position this time)
- Despite current stock prices, the economic data is awful and fast getting worse
- A recession is near-unavoidable at this point
- What to do if you’re not in the top 0.1%
If you have not yet read Part 1: It’s 2016 All Over Again. Or Is It?, available free to all readers, please click here to read it first.
I know that it seems as if the US equity markets cannot ever go down and, truthfully, those indexes receive a ton of help from the Fed, the media, and from corporate buybacks.
The trouble, as always, when it begins will not be detected in the large, successful companies first. Amazon and APPL will be among the last to go down.
The trouble will start at the outside and work its way inwards. This “outside in” phenomenon is pretty robust and it has not yet been repealed by the interventionistas at the Fed.
In the US we might look to the small cap stocks to give way first, and I think they have. It’s in that universe where we will find an outsized majority of the zombie companies.
From a fundamental standpoint the small caps are a certified balance sheet mess. Their net debt has been on a 40-degree, ruler-straight rise since 2010 even as their EBIDTA has risen at only a 10-degree trajectory. The current gap is eye popping.
This is a huge increase in debt, and it makes these companies especially vulnerable to any economic downturn or rise in interest rates.
Accordingly, while all eyes are on the Nasdaq powering to a brand new all time high, the small caps in the Russell 2000 are definitely not making new highs and seem to be sneaking out the back door.
If you are looking for a place to short US equities at the index level, the small caps are the …
Why This Better Work
PREVIEW by Chris MartensonExecutive Summary
- China’s critical role in keeping the party going (and why China is in a weaker position this time)
- Despite current stock prices, the economic data is awful and fast getting worse
- A recession is near-unavoidable at this point
- What to do if you’re not in the top 0.1%
If you have not yet read Part 1: It’s 2016 All Over Again. Or Is It?, available free to all readers, please click here to read it first.
I know that it seems as if the US equity markets cannot ever go down and, truthfully, those indexes receive a ton of help from the Fed, the media, and from corporate buybacks.
The trouble, as always, when it begins will not be detected in the large, successful companies first. Amazon and APPL will be among the last to go down.
The trouble will start at the outside and work its way inwards. This “outside in” phenomenon is pretty robust and it has not yet been repealed by the interventionistas at the Fed.
In the US we might look to the small cap stocks to give way first, and I think they have. It’s in that universe where we will find an outsized majority of the zombie companies.
From a fundamental standpoint the small caps are a certified balance sheet mess. Their net debt has been on a 40-degree, ruler-straight rise since 2010 even as their EBIDTA has risen at only a 10-degree trajectory. The current gap is eye popping.
This is a huge increase in debt, and it makes these companies especially vulnerable to any economic downturn or rise in interest rates.
Accordingly, while all eyes are on the Nasdaq powering to a brand new all time high, the small caps in the Russell 2000 are definitely not making new highs and seem to be sneaking out the back door.
If you are looking for a place to short US equities at the index level, the small caps are the …
by
Chris Martenson
Executive Summary
- Learning how to become rich requires 'unlearning' what we're taught in school
- Clarifying the path forward
- Recommended reading for getting started on the journey
- Why investing in your continuing education is so critical at this juncture
If you have not yet read Part 1: The One True Thing, available free to all readers, please click here to read it first.
The good news in our civilization is that there’s no reason at all for you to remain parked in whatever slot you’ve been assigned or fallen into. You can break free and either move up — or even out of — the pyramid.
But first you have to understand the beliefs that keep you where you are.
As I write this I'm on the Real Estate Radio Guys annual Summit At Sea event (March 14-24), surrounded by very successful entrepreneurs and investors.
Two key themes of the conference are (1) learning how to be a successful real estate investor, and (2) unlearning all the unhelpful crap you were taught throughout your upbringing.
Learning the right things and unlearning the wrong things. Education and beliefs.
One of the more delightfully blunt faculty speakers at this event is Robert Kiyosaki (of Rich Dad, Poor Dad fame) who keeps drilling home the point that the education system is not designed to help you achieve financial freedom. Rather, it's designed to slot you into the most heavily-taxed layer of the pyramid, and then keep you there.
The “Employee” slot, no matter how well-compensated, is heavily taxed. As soon as you break out of a poverty-level paycheck you quickly escalate towards an overall combined rate of taxation of about 40%.
What if you were to learn that there were other means of making money that will legally reduce your tax rates to 20%, or even to 0%? Further, what if you learned that nearly all of the rich people are operating in these areas?
It's true. And so we learn that…. (Enroll to read more)
The Path Forward
PREVIEW by Chris MartensonExecutive Summary
- Learning how to become rich requires 'unlearning' what we're taught in school
- Clarifying the path forward
- Recommended reading for getting started on the journey
- Why investing in your continuing education is so critical at this juncture
If you have not yet read Part 1: The One True Thing, available free to all readers, please click here to read it first.
The good news in our civilization is that there’s no reason at all for you to remain parked in whatever slot you’ve been assigned or fallen into. You can break free and either move up — or even out of — the pyramid.
But first you have to understand the beliefs that keep you where you are.
As I write this I'm on the Real Estate Radio Guys annual Summit At Sea event (March 14-24), surrounded by very successful entrepreneurs and investors.
Two key themes of the conference are (1) learning how to be a successful real estate investor, and (2) unlearning all the unhelpful crap you were taught throughout your upbringing.
Learning the right things and unlearning the wrong things. Education and beliefs.
One of the more delightfully blunt faculty speakers at this event is Robert Kiyosaki (of Rich Dad, Poor Dad fame) who keeps drilling home the point that the education system is not designed to help you achieve financial freedom. Rather, it's designed to slot you into the most heavily-taxed layer of the pyramid, and then keep you there.
The “Employee” slot, no matter how well-compensated, is heavily taxed. As soon as you break out of a poverty-level paycheck you quickly escalate towards an overall combined rate of taxation of about 40%.
What if you were to learn that there were other means of making money that will legally reduce your tax rates to 20%, or even to 0%? Further, what if you learned that nearly all of the rich people are operating in these areas?
It's true. And so we learn that…. (Enroll to read more)
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