Stockman: The Best Way to Profit From a Market Crash

Yesterday, I made a public and urgent market prediction. I believe that one of the most iconic American companies is going to be the next major U.S. stock to crash. And it could happen as soon as Jan. 28 — that’s next Thursday.

This company is one of many “bubble stocks,” as I call them. It may be the biggest financial bubble I’ve come across. When you follow that link, I explain why its crash will lead the way for a larger crash in the broad stock market.

I warned you about this dynamic on Dec. 14. If you recall, it was the day before the Federal Reserve raised interest rates. I invited you to join me for a free and live online training webinar. The title was “The End of the Bubble Finance Era.” During it, I made two important warnings:

That the Fed would not only raise rates…

But that when it did, the greatest inflection point in financial market history would occur.

One month on, both calls were correct. The market is crashing. And now you need a new investment strategy to help you navigate the natural consequence of decades of central banking gone wild.

I saw a host on financial news yesterday note that the S&P 500 is now down $2 trillion for the year. He wondered if his panel could explain what’s happened in the stock market since the new year began. None had the right answer.

The truth is the bull market in stocks is ending. That bull market was phony and fueled by years of Fed money printing. Now it’s rapidly breaking down.

The reason?

Raising interest rates requires draining liquidity out of the market. When the Federal Reserve does that, it causes a selling crescendo. It’s only just begun and will grow greater in time. Expect the market to go lower.

The “buy the dips” strategy that’s worked for the last seven years is over and done. Many investors are going to learn that lesson the hard way.

Instead, you need to “sell the rips.”

I’ve been working to develop this strategy for a lifetime. And now I’m happy to be working with Agora Financial to bring it to you. I spent 20 years in Washington as a congressman and as a budget director under Ronald Reagan. I spent another 20 years on Wall Street — particularly in the leveraged finance business.

I think I have a pretty good view of how things work on Wall Street and in Washington. We’re at an important intersection of events that is going bring the financial markets back down to Earth.

You’ll need my strategy to help you. I have invested my own money this way. Now there’s a way for you, even in what will be fairly scary times, not to be punished by the consequences of failed policies in Washington. There is a way to preserve and grow your portfolio even as things begin to unravel and fall apart.

You need to play the market downside with a limited risk strategy. I call this “bubble finance trading.” It’s the best way to profit in the markets in the weeks and months ahead. Click here to read more…

Regards,

David Stockman
for The Daily Reckoning

The Daily Reckoning