Bull Markets and Geniuses

Greetings from beautiful downtown Nashville! It’s my first time here, and I already love it.

Music City is well named. Everywhere you go, talented musicians abound.

I’m down here for the Paradigm Shift Summit, our company’s big investment conference.

More than 700 subscribers made the trip, and I’ve already met a bunch of them.

A fine group of people. And happy, too.

The timing for this meeting couldn’t be better. Many of the big ideas our editors have been recommending are working marvelously.

• Gold, silver, and miners are flying
• Rare earth stocks are booming
• The tech/AI run continues
• Bitcoin recently hit a new all-time high above $126,000

Members have told me stories about how their wealth is growing thanks to Paradigm services run by our talented group of analysts and editors.

It’s been awesome meeting our readers in person and hearing about their positive experiences.

Almost everyone I spoke with has been ecstatic about recent gains in the market. And across the vast majority of Paradigm services.

Everything is coming up aces.

The question is, how long can this “everything goes up” moment last?

Up and to the Right

There is an old investing adage that everyone looks like a genius in a bull market. And right now, almost everything is working.

Our friend Greg Guenthner summed it up well in his presentation today, quipping, “We’re in a bubble… embrace it!”

Indeed. We must make hay while the sun shines. But we should also remember that old adage about bull markets and geniuses. Stay humble out there.

Enrique Abeyta had a nice line in his presentation:

“The most important thing I’m going to tell you today is this: It’s not how much money you make, it’s how much money you keep.”

It’s a good point. To be clear, Enrique’s not bearish.

But it’s pretty clear we’re in the midst of a bubble.

Some sectors, however, are bubblier than others. If you’re heavy into tech stocks, for example, it probably makes sense to take some profits. Tech has been in a raging bull market since 2009 (with a few sharp but brief corrections). It may continue for a while longer, but a bear market will strike eventually.

I believe hard assets are a more durable trade, and still have a long way to go. Regular readers know we love gold and silver miners.

Today, silver briefly crossed the $50 wall before retreating a bit. Gold is hovering around $4,000. As I mentioned on Tuesday, we’re due for a short-term pullback in precious metals and miners. I’d like to see them consolidate or even retreat a bit. Parabolic moves are rarely sustainable. It would be healthy for gold and silver to take a breather here.

During Jim Rickards’ presentation earlier, he talked extensively about gold and assured attendees that “The frenzy stage for gold has not yet begun”. Agreed.

What else looks good for the long-term? Base metals like iron and copper are also an intriguing play.

Oil is another area I like in this market. It’s out of favor, and producers offer robust cash flow and nice yields. They also own valuable hard assets which should offer a hedge against future inflation. Petrobras (PBR.A) remains my favorite way to get exposure to oil and gas.

The Brazilian oil giant has been beaten down over recent years, but continues to make massive investments in future production which should pay off down the road. And it’s hard to beat the dividend potential on that stock. If oil stays at current levels, yields should be healthy. But if oil rises, they could be extraordinary.

In Conclusion

Markets are red hot. And I’m not trying to be a downer. Just suggesting that we should all stay humble in these crazy conditions.

Right now, almost everything’s working (except bonds). But at some point this will change, and sector allocation will once again become a critical success factor.

As you all know , I believe hard assets are the best long-term investments to own going forward. Most people still have barely any exposure to this sector, and I expect that to change over the coming years.

My goal over the coming years is to help readers diversify and hedge their portfolios for the inevitable shift ahead.