The Easy Money Move That Puts You Ahead of the "Smart Money"

Matt Piepenburg

The U.S. stock market is near all-time highs, of course, but there's a more troubling flip side to that: U.S. stocks are at nonsensical, nosebleed valuations.

Folks, when a money-losing outfit like Uber Inc. (NASDAQ: UBER) can go out – in broad daylight, in front of everyone – and value itself at $84.2 billion with a totally straight face and no hint of sarcasm or irony…

Well… that tells you something's not right. Something's been broken.

It deserves it for sure, but I'm not just singling Uber out here; it's merely emblematic of this mass insanity. There are hundreds upon hundreds of companies, many of them market leaders, trading at multiples quite divorced from reality. Nothing about the fundamentals justifies the prices being asked.

And like the saying goes, you can't fool all the people all of the time.

As I'm going to show you in a second, savvy investors – the so-called "smart money" – are increasing their cash positions. That's a wise move, because cash won't lose its value the way stocks do, and you can use it for "dry powder" to scoop up bargains when markets slide by double digits.

There's just one problem: The smart money is building up cash, but nowhere near fast enough. Nor are they setting aside enough.

Let me show you what my two-plus decades of experience says is the perfect cash allocation for a market like this…

Matt Piepenburg

About the Author

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25-year run as a hedge fund portfolio manager, family office chief investment officer, managing director and general counsel. Internationally recognized expert in credit and equity markets as well as macro risk management.

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