Thursday, July 28, 2016

Stocks Could Easily Fall 40% From Here
"The U.S. is in a recession. Quarterly earnings by publicly traded corporations have fallen for SIX straight quarters. That covers a time of 18 months. This has never happened outside of a recession. Against this economic backdrop, stocks are in 'la la land' rallying to new all-time highs. The more earnings fall while stocks move higher, the BIGGER the bubble gets. Beyond this, the world’s second largest economy (China) is rapidly devaluing the Yuan.  Stock bubbles are formed when stocks detach from fundamentals. By the look of things, this hit in 2015. And is has gotten significantly worse since then. At current levels, the S&P 500 needs to fall almost 40% to catch up with earnings. A Crash is coming… we all know it. And smart investors are preparing their portfolios for it NOW before it hits."
- Graham Summers
link here to the reference

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