Thursday: How to Make 500% On the Next Crash

I laid out a case for Members last night as to why earnings are deceiving as we are hearing a lot from multi-nationals early in earnings season and they get some pretty big benefits from the exchange rate, which is running 14% better than last year.  I strongly advise all Members to read my example on YUM brands as well as look over the charts and other stuff I’m not going to bother repeating here.

What I will repeat here is what I said in conclusion, which is: 

I look at stuff like this (the Dollar’s effect on earnings) and think "surely I can’t be the only person who sees this" but I can’t find anyone else discussing it.  I just don’t see how there can’t be quite a few fund people who know full well that this is all BS but, if so – what is the logic that keeps them playing the game?  I guess, like us – they are worried about losing out to inflation so they can’t really stay away but we are currently ignoring a staggering amount of bad news at a complacency level we haven’t seen since 2007 (VIX under 15).  

Is it really possible that anyone can look at the market and say that they feel there is less risk in the market now than there was in 2005-7.  Of course NOW we know that they were idiots but THEN people felt very safe buying anything that wasn’t nailed down.  I guess that’s the answer – only in hindsight does the behavior we are observing right now seem idiotic.  While it’s happening it’s called "trading the trend." Flashback from November

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