Momentum Monday – Stocks as Venture Capital….A Bear Market Plan

As a reminder, Marketsmith (by Investor’s Business Daily) is now a sponsor of the weekly show. All the charts you have been seeing in the videos and will continue to see are from Marketsmith. They are offering my readers a three week trial for $19.95. Click this link if you would like to try it out.

It’s Monday, which means Ivanhoff and I did our weekly video covering the markets and momentum. The momentum is all to the downside and a nasty bear market continues. I have no idea what traders and investors are looking for as the panic continues. I imagine it is some sort of positive data about the Corona virus.

Maybe Rita Wilson and Tom Hanks surviving the virus will be the data we need for a bounce. Rita had the best message of the day here.

Click here to watch/listen to this weeks episode.

At the end of the video, I riffed on a plan that I am putting into action on further weakness

It’s easy right now to call Americans dumb and unprepared. This riff is not about the health crisis so please do not be offended…just thinking out loud for a minute about the future of markets…

This will pass. The massive stimulus is upon us. I have no idea when it will work and there will be massive unintended consequences of it and the Corona health crisis.

By the end of the 4th quarter – assuming the virus is contained – the stimulus should hit and help.

If you liked stocks at all-time highs just 28 days ago and now do not want to own stocks, you should consider moving to Russia.

After indexes drop 30-50 percent, historically the next 10 years have much better annual returns.

Take a portion of your free cash and act like a venture capitalist and pick a basket of stocks. I will commit 10-20 percent of my free cash to some brands that I love and live with and spend on that I do not need to check prices for at least 6 months (because I may buy more)

Yes you may lose that whole 10-20 percent, but if you do, we are fucked anyways. If we don’t you may make venture style returns 3-5 years out from owning this basket of liquid stocks. I like those odds.

I know two things:

1. We are going to lose many freedoms and conveniences

2. The big leaders will get bigger. Starbucks and likely $LK (china) and LULU and MCD will have less corner store competition. The cash rich tech companies will be buying teams and companies at pennies on the dollar.

PS – Also all the ‘Panic With Friends ‘ 22 podcasts already – are here

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here.