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When it comes to the stock market, everything’s always all good… until it isn’t.
And it’s been all good: U.S. stocks have been rallying for nine years, making successive all-time highs, with only sporadic bouts of profit-taking by the Nervous Nellies along the way.
But now, some huge investors – marquee names – are getting nervous.
And they’re letting people know about it, too…
Between them, these giants are pushing around close to $1.7 trillion in capital – more than enough for them to be able to make waves wherever they go.
I’m going to show you what to do if these whales are right; they just might be…
Meet the (Very Wealthy and Powerful) Bears
Ray Dalio, founder of Bridgewater Associates LP, the world’s largest hedge fund with more than $150 billion under management, believes the “magnitude” of the next downturn will be epic. “We fear that whatever the magnitude of the downturn that eventually comes, whenever it eventually comes, it will likely produce much greater social and political conflict than currently exists,” he recently said.
Former “Bond King” Bill Gross, founder of PIMCO LLC and now legendary portfolio manager at Janus Henderson, says, we’re at the highest risk levels since 2008 because “investors are paying a high price for the chances they’re taking.”
Naturally, founder and CEO of DoubleLine Capital Jeff Gundlach – the new “Bond King” – advises “moving toward the exits.” Gundlach’s reducing his positions in junk bonds, emerging-market debt, and lower-quality investments, because he believes investor sentiment will turn negative. “If you’re waiting for the catalyst to show itself, you’re going to be selling at lower prices,” he told Bloomberg.
Wall Street icon Carl Icahn, who regularly loads up on stocks and hits it out of the park, warns he isn’t seeing opportunities given how much stock prices have run up. “I really think now, I look at this market and you just say, ‘look at some of these values,’ and you have to wonder,” he lamented in a CNBC interview in June.
Oaktree Capital founder Howard Marks has been talking about “too-bullish territory.” The billionaire warns “aggressive investors are ‘engaging in willing risk-taking, funding risky deals, and creating risky market conditions.’”
Legendary hedge fund guru George Soros, who in 1992 “broke the Bank of England” and pocketed more than $1 billion doing it, recently sold stocks and bought gold… after a near 10-year hiatus. Just to give you an idea, the last time Soros made a big play was in 2007, when he placed bearish trades on housing in the run-up to the meltdown.
Appaloosa Management’s David Tepper warns investors to stockpile some cash and says he’s “on guard.”
“Everything is expensive and we are late in the business cycle," Sebastien Page, head of asset allocation at T. Rowe Price, said in an interview with Bloomberg. "That introduces fragility for risk assets, and there isn’t much buffer."
So, that’s a lot of negativity. But don’t let it ruin your day. Do this instead…
How to Stay Invested and Sleep at Night
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.
Stops make sense. AND, they work only in a market that A) Doesn't gap down big and B) Continues to trade, so you can liquidate your positions. There's no guarantee of either. Stuff happens.