Last week, Facebook suffered the biggest one day loss in history totaling $195 Billion. This amounts to the size of three General Motors. I can tell you that General Motors produces a lot more than Facebook (which recently change their hated name to META). I can also tell you that General Motors produces a heck of a lot more (reliable) vehicles than Tesla but Tesla is valued higher than General Motors, Toyota and Ford combined. Expect to see Tesla's value shrink over the next 12 months to a more reasonable level as these over-inflated companies reveal their actual worth.
A recession is in the works, if we're not in one already. The Bank of England raised its benchmark rate last week to a whopping half percent. We can expect central banks around the world to follow suit in an effort to cool inflation... inflation that they created! The debt monster now has a roar that can be heard around the world with the US debt just last week having surpassed $30 Trillion! Their debt to GDP ratio is now at 134%.
Just 5 companies are holding up the S&P 500. The rest are losing money hand over fist. Since March 2020 when the plandemic hit, central banks created more money (out of thin air) than at any other time in history and most of it went into the stock market. These 5 companies are being held up by the hot air central bank money and a reckoning, I believe, is just around the corner for them.
Yet, there are sectors that are set to make major gains in spite of the mess we're in. Here's a hint. Earlier last week, the former CEO of Blackrock released a series of tweets showing that funeral homes have seen an uptick in business with one funeral chain's company stock surging more than 100% within the last 12 months. He also pointed out that insurance companies are being hit hard and as a result, their stocks are tumbling and going in the opposite direction. He basically stated to go long funeral homes and go short insurance companies. I wonder what's causing all these unexplained deaths among the working age group, 18 to 49 years of age.
Another sector that is doing well are food companies. Tyson Foods stock just hit a record high. This has everything to do with soaring inflation we are presently seeing. Their stock is doing great because they raised prices on chicken, pork and beef and prepared foods by double digits. Investing in companies that make food may be a good bet but watch out as they may get hit with shortages of their own.
Oil is back at $90 per barrel. Expect inflation to drive gas prices higher. Investing in an oil company that is actually producing oil is a very good bet right about now. Rumors circulating are that oil is going to $200 a barrel. This is not far-fetched. Oil is not getting more expensive. It's your hard earned dollar (currency) losing its purchasing power.
Do you see how central bank inflation is really theft?
Another promising sector is the mining sector. For the better part of the last decade, this sector has suffered a severe deflation in stock value. That is all about to change. Gold is headed back over $2000 per ounce. Pure Gold Mining, a Canadian company that is just getting started, may become one of the premiere gold miners in Ontario and all of Canada. Pure Gold produced their first ounce of gold in December, 2020 and continues to ramp up production. At present, their stock is a measly 63 cents (CDN) per share. It screams 'BUY', 'BUY', 'BUY'!
Gold (and silver) are some of the best ways to protect yourself against inflation so keep a close eye on this sector going forward. Commodities related to food and precious metals are on their way up. Whether it's soy, corn, bacon, coffee, gold or copper, commodities are what people really need the most. It's much more important than Facebook, Tesla or Twitter ever will be. The stock market is dangerously being propped up by these FEW companies that produce nothing or next to nothing. I suggest staying far away from these nothing burgers and focus on commodities (aka real value)!
Another sector I believe will do well is alcohol / spirits. Even if the price goes up double digits, the alcohol will still sell. You may recall that France lost some 10 million tons of grapes last season due to severe frost. Expect wine to go up in price as a result. Manufacturing and delivering costs push prices even higher. It may hurt our pockets but it will certainly help propel their stocks higher.
One last sector that has excellent promise is... wait for it.... CRYPTOS! Bitcoin, Etherium, Theta and even Doge are better these days than the fiat currencies that seem to evaporate as soon as we take it out of our pockets. We've all seen cryptos explode in value just in the last few years. I think the next explosion in value for Bitcoin and cryptos in general will boggle minds. It may come sooner than most people think.
Bitcoin has come down a bit from its high of $67,000 back in November and it looks like consolidation is over. Bitcoin is back above $43,000 after dropping below $40,000 in the last few weeks. Are we going to see $100,000 by year end? It's a very real possibility.
Protect your wealth that you worked so hard for.
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Check out some of my other posts...
My biggest hits of the last 12 months.
US debt hits $30 Trillion / Debt to GDP 135%
Now's the time to buy your seeds!
Bank of Canada leaves rates unchanged.
'Transitory' inflation highest in 4 decades.
US Mint gold coin sales best in 12 years.
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