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    We Interrupt This Market Plunge To Bring You This Important Message…

    Time's up. If you're going to take action, do it NOW
    by Adam Taggart

    Wednesday, August 14, 2019, 2:24 PM

What an ugly day for the markets. A sea of red everywhere (except for volatility):

Major market indices lose 3%

The major indices lost 3% pretty much across the board.

We’ve been tracking the drivers underlying the market meltdown here on the site pretty much hourly. And you can be sure we’ll do so as long as things remain fluid.

But I want to deliver an important message, because time demands it.

We’ve been writing for months — and with increasing intensity over the past several weeks — that the risk of a major market correction had become unacceptably high.

We’ve urged readers to get defensive. To move to cash (specifically, into short-term T-bills which pay a much better return than banks). To deploy hedging positions against a market downturn. To consider increasing your portfolio exposure to gold and silver. To stop expecting the era of capital gains to continue, and instead seek dependable income streams.

We’ve been loud advocates of taking these steps while working with a professional financial advisor who understands and appreciates the risks that are in play. There aren’t many out there who do, but their assistance in helping you make well-informed decisions can be extremely valuable.

And my main point here is that time to take these steps is fast running out. Market sentiment is shifting rapidly from euphoria & complacency to fear.

As we’ve often reminded readers, market tops are processes. They occur over a long time.

But market corrections are events. They tend to happen suddenly and violently. If you’re not positioned for them in advance, there’s usually no time to react once they’re underway.

So the message here is: if you’ve been thinking about adjusting your portfolio allocation or following an expert’s advice, but just haven’t gotten around to it yet; this is your wake up call. Time looks very short.

As Chris famously says, when it comes to preparing for a crisis (financial or otherwise), “it’s better to be a year early than a day late.” And given how shaky both the technical and fundamental data look right now, we may have a lot less time to act than most folks currently realize.

To give some perspective, I asked the managing partners at New Harbor Financial, the financial advisory firm endorsed by Peak Prosperity, how their general portfolio has performed since the S&P 500 peaked on July 26th.

Here’s what they report:

For the period July 26 – Aug 14, 2019:

  • New Harbor Financial portfolio return: +0.75%
  • S&P 500: -5.4%

THAT’S the kind of protective shield that defensive positioning and hedging can offer your money.

Now, it’s important to note that I’ve picked a very specific time window here to compare, and past results are no guarantee of future performance (* read New Harbor disclaimer below). But this is exactly the type of downside protection a good financial advisor skilled in risk management can provide.

While millions of conventionally-positioned investors are licking their wounds from the past few weeks’ market turmoil, the average New Harbor client is actually up.

Speaking for myself, it is hugely validating (and relieving!) to watch my own personal portfolio buck the trend and sustain & grow through tumultuous periods like we’re in now.

I also asked the partners to share their latest outlook. Here’s what they have to say:

Stock markets in the US have basically gone nowhere since the beginning of 2018.  During that time, there has been plenty of volatility with sudden drops of over 10%, followed by furious rallies back to new highs.  We think this action is typical for a late-stage topping market, particularly one that is likely to be in hindsight one of the biggest investment bubbles in our lifetimes.  Market tops have a way of lulling participants to sleep because of the way that they roll along, slowly peaking over a long period of time. This one has been no exception.

Our portfolio at New Harbor is essentially flat the stock market, with over half the portfolio in Treasury Bills and cash equivalents, and modest exposure to gold and precious metal mining stocks.  We are optimistic that there will be opportunities in the future to invest and earn fair returns in the US stock market, but that will almost certainly be at lower prices. At current levels, we think that the S&P 500 is likely to lose more than half of its value from its high by the time this market cycle is over.

While timing the exact turn in markets is impossible, given current prices the risk to the downside is large.  We would urge investors to evaluate risk in their portfolios, and consider reducing exposure to stocks, particularly if they are not prepared to potentially ride out many years of drawdowns in these assets.

So if you have similar goals for your money — if, like me, you place a higher priority on return OF capital vs return ON capital during these risky times — then I sure hope you’ve already positioned your portfolio wisely for the future you see coming.

If not — and I know from the emails we receive that many of you still have not — it’s not too late. But it may be very soon. Time looks to be getting very, very short.

Put your plan into action. If you don’t have your plan finalized yet, meet with a good professional advisor asap. And if you’re having trouble finding a good one, consider scheduling a portfolio review with the folks at New Harbor (it’s completely free)

Just don’t delay. Sentiment is finally breaking. Once it breaks fully, the ride downward will likely be very sharp, quick and brutal for everyone caught unprepared.

________________________________

*Important Disclosure: New Harbor Financial Group, LLC registered as an investment adviser directly with the SEC in January 2011.  The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.  SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Information presented is not an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned.  The content of this text does not involve the rendering of personalized investment advice.  No current or prospective client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance levels.  All investment strategies have the potential for profit or loss.  Changes in investment strategies, contributions or withdrawals, and economic conditions may materially alter the performance of your portfolio.  Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client’s investment portfolio.  Historical performance results for investment-management fee, the incurrence of which would have the effect of decreasing historical performance results. There can be no assurances that a portfolio will match or outperform any particular benchmark.  The results portrayed reflect the reinvestment of dividends and capital gains.  Performance is shown for a composite of accounts managed by New Harbor with balances of $250,000 or greater.

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15 Comments

  • Wed, Aug 14, 2019 - 4:15pm

    #1
    Petey1

    Petey1

    Status Member (Online)

    Joined: Sep 13 2012

    Posts: 13

    3+

    Every thing is interconnected stock up now!

    When I went to stock up on my favorite barbecue sauce I noticed the glass bottles are made in China!  Everything is so intertwined now.

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  • Wed, Aug 14, 2019 - 8:30pm

    Reply to #1

    Locksmithuk

    Status Bronze Member (Offline)

    Joined: Dec 19 2011

    Posts: 109

    5+

    Interconnected BBQ'd honey

    Petey, you’d better believe it. In Australia some of our “”honey”” [ <==== see what I did there?] is a veritable cornucopia of blended imported honey [and lashings of suspected syrup] from multiple countries – including China. Some of these countries have questionable practices when it comes to properly regulated chemical use, product purity, etc. Truly, it’s a shemozzle.

     

    Anyway, back to the matter at hand. There’s a plunge to be marvelled at, and I’m settling in with some snacks.

     

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  • Wed, Aug 14, 2019 - 10:46pm

    #2
    ezlxq1949

    ezlxq1949

    Status Bronze Member (Offline)

    Joined: Apr 29 2009

    Posts: 262

    2+

    I saw what you did

    Locksmithuk wrote,

    In Australia some of our “”honey”” [ <==== see what I did there?] is a veritable cornucopia of blended imported honey [and lashings of suspected syrup] from multiple countries – including China.

    Cornucopia — in the form of high-fructose cornucopia syrup, surely!

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  • Thu, Aug 15, 2019 - 4:34am

    #3

    blackeagle

    Status Bronze Member (Offline)

    Joined: May 16 2013

    Posts: 228

    1+

    Australia? Honey?

    How this is possible that Australia imports honey? Canada imports bees from Australia, New-Zealand and Chile (Yes, we are losing our bees…) by full planes every year. You must have plenty of honey if you can afford to sell bees?????

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  • Thu, Aug 15, 2019 - 5:52am

    Reply to #3

    Locksmithuk

    Status Bronze Member (Offline)

    Joined: Dec 19 2011

    Posts: 109

    1+

    Oz honey

    How this is possible that Australia imports honey? Canada imports bees from Australia, New-Zealand and Chile (Yes, we are losing our bees…) by full planes every year. You must have plenty of honey if you can afford to sell bees?????

    Any import from which margins can be squeezed at the expense of local industry seems to be fair game the world over – honey is no exception. I hate that our high quality local bee industry has to compete against inferior competition across an unwitting customer base.

    Our bees – like our youth – like to travel abroad. So we sell them. [Our bees, not our youth.] That aside, I’ve heard that the real reasons that our honey-producing bee population hasn’t suffered as much as other countries are the recent explosion in the number of beekeepers and the fact that so far – fingers crossed – neonicotinoids have largely affected wild bees, not hived ones.

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  • Thu, Aug 15, 2019 - 7:02am

    Reply to #3

    Adam Taggart

    Status Platinum Member (Offline)

    Joined: May 25 2009

    Posts: 2686

    6+

    "Honey Laundering"

    Not sure how this post on the market meltdown morphed into a honey discussion, but hey, let’s roll with it 🙂

    I posted this years ago, and sadly, it sounds like it’s just as relevant today:

    “Honey Laundering”: Most Honey Sold In US Stores is Fake

    QUICK REPLY LAST POST 17658 reads   1 posts
    • Wed, May 29, 2013 – 05:24pm

      #1

      Adam Taggart

      Status Platinum Member (Online)

      Joined: May 25 2009

      Posts: 2570

      0

      “Honey Laundering”: Most Honey Sold In US Stores is Fake

    Testing conducted by Food Safety News finds that most honey sold in retail stores in the US isn’t “honey”.

    Surprised? I was.

     

    More than three-fourths of the honey sold in U.S. grocery stores isn’t exactly what the bees produce, according to testing done exclusively for Food Safety News.

    The results show that the pollen frequently has been filtered out of products labeled “honey.”

    The removal of these microscopic particles from deep within a flower would make the nectar flunk the quality standards set by most of the world’s food safety agencies.

    In the U.S., the Food and Drug Administration says that any product that’s been ultra-filtered and no longer contains pollen isn’t honey. However, the FDA isn’t checking honey sold here to see if it contains pollen.

    Filtering out the pollen is more costly and reduces the health value and shelf-life of the final product. So why do it? To mask the orgins of where the ‘honey’ came from:

     

    Ultra filtering is a high-tech procedure where honey is heated, sometimes watered down and then forced at high pressure through extremely small filters to remove pollen, which is the only foolproof sign identifying the source of the honey. It is a spin-off of a technique refined by the Chinese, who have illegally dumped tons of their honey – some containing illegal antibiotics – on the U.S. market for years.

    The food safety divisions of the  World Health Organization, the European Commission and dozens of others also have ruled that without pollen there is no way to determine whether the honey came from legitimate and safe sources.

    Food Safety News decided to test honey sold in various outlets after its earlier investigationfound U.S. groceries flooded with Indian honey banned in Europe as unsafe because of contamination with antibiotics, heavy metal and a total lack of pollen which prevented tracking its origin.

     

    Removal of all pollen from honey “makes no sense” and is completely contrary to marketing the highest quality product possible, Mark Jensen, president of the American Honey Producers Association, told Food Safety News.

    “I don’t know of any U.S. producer that would want to do that. Elimination of all pollen can only be achieved by ultra-filtering and this filtration process does nothing but cost money and diminish the quality of the honey,” Jensen said.

    “There is only one reason to ultra-filter honey and there’s nothing good about it,” he says.

    In addition to using harmful pesiticides and antibiotics, this “laundered” honey is often diluted with corn syrup and other illegal sweeteners.

    Food Safety News funded testing of ‘honey’ from the major sellers. Here are the top-line results:

     

    Food Safety News purchased more than 60 jars, jugs and plastic bears of honey in 10 states and the District of Columbia.

    The contents were analyzed for pollen by Vaughn Bryant, a professor at Texas A&M University and one of the nation’s premier melissopalynologists, or investigators of pollen in honey.

    Bryant, who is director of the Palynology Research Laboratory, found that among the containers of honey provided by Food Safety News:

    • 76 percent of samples bought at groceries had all the pollen removed, These were stores like TOP Food, Safeway, Giant Eagle, QFC, Kroger, Metro Market, Harris Teeter, A&P, Stop & Shop and King Soopers.
    • 100 percent of the honey sampled from drugstores like Walgreens, Rite-Aid and CVS Pharmacy had no pollen.
    • 77 percent of the honey sampled from big box stores like Costco, Sam’s Club, Walmart, Target and H-E-B had the pollen filtered out.
    • 100 percent of the honey packaged in the small individual service portions from Smucker, McDonald’s and KFC had the pollen removed.
    • Bryant found that every one of the samples Food Safety News bought at farmers markets, co-ops and “natural” stores like PCC and Trader Joe’s had the full, anticipated, amount of pollen.

    Food Saftey News’ report is worth reading in full.

    Just one more validating reason why keeping bees is important…

     

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  • Thu, Aug 15, 2019 - 8:52am

    #4

    David

    Status Member (Offline)

    Joined: Oct 29 2011

    Posts: 28

    2+

    Netflix's Rotten Series Espisode 1 "Lawyers, Guns & Honey"

    First episode of Netflix’s Rotten series also covers some of that same material; “misc” stuff in, or missing from, our honey products.   The whole series is worth a watch, IMO.

    https://www.netflix.com/title/80146284

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  • Thu, Aug 15, 2019 - 10:28am

    #5
    Steve

    Steve

    Status Member (Offline)

    Joined: Jun 27 2009

    Posts: 36

    3+

    Back on subject to the market meltdown

    John Exter’s Inverted Pyramid and the frenzy to take on risk when the wealth effect is strong and flee risk during uncertain times.  When the herd changes direction, Katy bar the door!

     

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  • Fri, Aug 16, 2019 - 3:29am

    #6

    Michael_Rudmin

    Status Gold Member (Offline)

    Joined: Jun 25 2014

    Posts: 880

    2+

    properly put, that entire Eberhardt pyramid

    … should fit into the top red square.

    There are a lot of things that are more basic than gold:

    Rest, trust, Companionship, Energy, labor, food, water, air

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  • Fri, Aug 16, 2019 - 5:14am

    Reply to #4
    marti61

    marti61

    Status Member (Offline)

    Joined: Nov 30 2015

    Posts: 12

    1+

    garlic peeling

    I agree- the garlic segment was esp. troubling to me about the peeled garlic/ forced labor in China angle..

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  • Fri, Aug 16, 2019 - 9:16am

    #7
    brushhog

    brushhog

    Status Member (Offline)

    Joined: Oct 06 2015

    Posts: 63

    8+

    I heard recession was a'comin...

    So I checked my vegetable garden. Nope all coming up nice and healthy. No sign of blight or bug on them taters. Not there. Aha, I thought and ran to the barn.

    Cow’s looked fit and healthy, full udders, all looking content and unconcerned. Not there.

    Then I ran to my well and looked down. Water is full, clean and cool. hmm

    Ran to the coop, nope, plenty of eggs. Must be…

    Nope. trees are still there, tall and strong.

    Just where’s this recession supposed to be anyway?

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  • Fri, Aug 16, 2019 - 7:09pm

    Reply to #7
    Littleskipper

    Littleskipper

    Status Member (Offline)

    Joined: Jan 06 2010

    Posts: 16

    4+

    Brushhog

    This week I’ve stocked up grain for the dairy cow and laying mash for the hens.  I’m raising a young bull now so that next year he’ll provide yearly breedings for my girls. I just finished raising 13 meat chickens and purchased a 1/4 cow for the freezer. We’ve been busy stocking up the freezer with this year’s beans and zucchini from the garden.   Today my seed library was replenished and next week we’re topping off the pantry with a bulk order.  Busy bees here.

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  • Sat, Aug 17, 2019 - 9:56am

    #8
    TechGuy

    TechGuy

    Status Bronze Member (Offline)

    Joined: Oct 13 2008

    Posts: 306

    1+

    'Flation is Coming

    Seems likely that another recession will end up pushing up inflation as the Fed cuts rates and re-start QE. The Gov’t has a bad habit of rewarding debtors and punishing savers. Plus the the US national debt pushing $23T with $1T+ annual deficits, it needs ultralow interest rates.  We’re on a low motion death spiral, as financial problem continue to get worse every day.

     

     

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  • Fri, Aug 23, 2019 - 8:51am

    #9

    Adam Taggart

    Status Platinum Member (Offline)

    Joined: May 25 2009

    Posts: 2686

    3+

    Markets Are Puking Post-Powell Speech

    Well, that escalated quickly…

    Jerome Powell spoke at Jackson Hole this morning and seemed to disappoint everyone.

    While simulateneously claiming that the US economy is in a “favorable place” he also warned of a fast-deteriorating situation posing “significant risks”, leading many to conclude further rate cuts are on the table for the Fed’s September meeting.

    President Trump, apparently outraged that Powell didn’t announce an emergency rate cut (presumably a big one of 100 basis points), took to twitter to lambast the Fed and to threaten harsher tactics in the US-China trade war — going as far to say “We don’t need China and, frankly, would be far better off without them“, and”Our great American companies… to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.

    The financial markets, which love Fed stimulus and political tranquility, are currently freaking out:

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  • Fri, Aug 23, 2019 - 8:56am

    #10

    Adam Taggart

    Status Platinum Member (Offline)

    Joined: May 25 2009

    Posts: 2686

    4+

    And precious metals are getting bid

    As capital is fleeing stocks today, it’s running to the PMs for safe haven:

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