Never Seen Anything Like It

From day one…actually, even before the Brexit vote, we predicted that Brexit would never actually happen.

The more we see, the more we’re convinced how right we’ll ultimately be. Prior to the Christmas break, the UK parliament voted to ensure that there would be a ‘meaningful vote’ on the UK’s exit terms.

And now, as the Financial Times reports:

Tony Blair has urged the Labour party leadership to back his call for a second referendum on whether to stay in European Union, arguing that ordinary Labour voters’ problems will not be resolved by Brexit.

Speaking on the BBC Today programme, the former prime minister said voters were “entitled to think again, if the circumstances changed”.

He predicted the coming negotiations on a trade deal would “expose” what he called the “central dilemma” facing the UK:

“You’re either close to Europe in which case you have to obey the rules, or you’re far away in a kind of Canada-style free trade agreement in which case you’ve got a big process of economic restructuring”.

He said in those circumstances “in my view, the Labour party doesn’t believe the answer to the problems of Leave voters is Brexit”.

Forget about Brexit. It won’t happen. The next step is ‘Bremain’ or ‘Bre-entry’, or whatever you want to call it. What we do know is that it’s a win for the ‘Deep State’ and those who believe in the power of the state and bureaucracy over the power of the individual.

Everyone’s a winner (so far)

It’s a new record close for the Dow Jones Industrial Average.

Last week, it closed above 25,000 points for the first time ever.

It means that the US market has gained 36.8% since Donald Trump’s election victory in November 2016.

The question now is whether that period, from November 2016 through to today, counts as the final stage ‘melt-up’ rally that often occurs before a steep stock market crash.

We’ve indicated the point on the chart below at which the rally began:

US market has gained 36.8% since Donald Trump’s election victory in November 2016 | 08-01-2018

Source: Google Finance
[Click to enlarge]

During the previous four years, the market gained around 30%. It has gained more than that in 14 months. That’s a boom by anyone’s standards. But is it a ‘melt-up’? Looking at the NASDAQ before the dotcom bust in 2000, you could argue that it isn’t.

From October 1998 to March 2000, the NASDAQ gained 229%. But wait. We’re not comparing the proverbial apple with another apple.

Let’s not consider what happened to the NASDAQ during that period, let’s consider what happened to the Dow Jones Industrial Average. By coincidence, as the NASDAQ gained 229%, the Dow gained…36.8%.

What do you know!

That’s important. The key to understanding whether the melt-up has happened isn’t necessarily to look only at the performance of the Dow. We need to look at the performance of other benchmarks. 

You know where this is heading, don’t you? In the 1990s, speculators flocked to the biggest speculative opportunity they had seen in their lifetime — tech stocks. They poured millions and billions of dollars into the sector.

It was great…for as long as the market kept going up. And it did keep going up…for longer than most expected. Some of the market’s biggest and most well-known bearish investors started calling the top of the tech boom as early as 1996.

But it was another four years before it topped.

As it happens, right now, folks are calling the top of another great speculative market — cryptocurrencies. If some of my colleagues are to be believed, this is the biggest speculative boom, not just of our lifetime but of all lifetimes.

We shall see. But what we do know is that some of the gains are extraordinary. This past week of leisure from your editor has given us the opportunity to check in on the track record of our crypto services.

And not without reason. As much as some folks are excited by the investing and speculating opportunity with cryptos, we’re receiving many more emails from folks who are calling us scammers…and much worse.

So how is the track record of these services looking right now? I’ll show you — without revealing the individual recommendations of course. These numbers are taken from the most recent weekly updates:

Secret Crypto Network:

  • Crypto #1 — up 468%
  • Crypto #2 — up 225%
  • Crypto #3 — up 808%
  • Crypto #4 — up 458%
  • Crypto #5 — up 469%
  • Crypto #6 — up 68%
  • Crypto #7 — up 133%
  • Crypto #8 — up 224%
  • Crypto #9 — up 123%

Crypto Tech Investor:

  • Crypto #1 — up 505%
  • Crypto #2 — up 202%
  • Crypto #3 — up 1,940%
  • Crypto #4 — up 1,506%
  • Crypto #5 — up 488%
  • Crypto #6 — up 1,291%
  • Crypto #7 — up 645%

There are also four other cryptos on the recommended buy list that are yet to trade.

Extreme Crypto Trader:

  • Crypto #1 — up 37%
  • Crypto #2 — up 88%
  • Crypto #3 — up 209%
  • Crypto #4 — up 85%
  • Crypto #5 — up 155%
  • Crypto #6 — up 6%

I’ll just come out and say it: I’ve never seen a combined track record like this in my 13 years in the financial publishing business. Moreover, I’ve never seen a combined track record like this in all my time in the market since 1995.

In short, it’s possible the melt-up isn’t taking place in stocks but in cryptos.

That thrills me…and worries me at the same time. I know from experience that returns like this can’t last forever. But I also know from experience that these kinds of returns tend to last longer than the bears (count your editor as one of them) ever imagine.

Ultimately, the dotcom bears were right. But they were way too early with their calls, all the while missing a huge opportunity for life-changing gains. The crypto bears will likely be right too…one day. But for now, life-changing gains are on the table.

Kris Sayce,
Publisher, Money Morning

Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

Money Morning Australia is published by Fat Tail Investment Research, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.

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