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What a crazy year this has been. We are living in an upside-down world where despite terrible fundamentals, Brexit, Trump's election, the Italy vote, and the Fed raising rates, sentiment keeps pushing the market higher and higher. Instead of the crash we expect and deserve, we get an apparently endless rally. Nothing makes sense. Nothing has gone as expected.
Well, that's not true. Sixty-eight percent of the stocks in my forecast last year still did exactly what I expected them to do.
A rising tide lifts all boats, so some of the toxic stocks I pointed out last year haven't crashed yet, or haven't fallen as far as I expected. (Some have gone up, though only negligibly.) However, you'll still see a generous amount of red in our shorts column (one stock dropped 75% this year) and an even more generous amount of green in our longs column.
I hope you've made some money on these – especially on the long plays. Drop me a line in the comments and let me know how you did.
I try to pick stocks that are so good or so bad that even a year-long nonsense rally can't conceal their true colors. Judge for yourself how well I've done.
Here's How Our Plays Did in 2016
This has been a challenging year, but we still haven't made out too badly.
We've seen our gold plays settle back a bit from their recent highs, though most of them are still up 40% or more. Because the world is going to have to deal with its burgeoning debt crisis via inflation and currency devaluation, gold remains a vital investment for every citizen. Obviously gold won't rise in a straight line, but over time it will appreciate significantly. It has weakened considerably since the election based on the misperception that President-elect Trump will be pro-growth and that growth will somehow be sufficient to repay our debts without inflation. While it may weaken further, I view its current price as very attractive because I view gold as a long-term investment, not as a "trade."
The best way to view the current gold sell-off is as "fake news." If gold trades lower, you should buy more! Gold is an investment in monetary disorder and the incompetence and corruption of central bankers and governments. Anyone who thinks that Donald Trump is going to put an end to that is smoking dope (which is now legal in California, which is a good thing because west-coasters are going to need a lot of weed to dull the pain when that loony state goes bankrupt due to the reckless financial promises of its Democratic politicians). Everyone should be buying gold at these prices to save themselves – not for a "trade" but as long-term protection against a future where the value of your paper dollars is destroyed even further than it has already been destroyed. And in addition to buying gold outright, you can ow…
About the Author
Prominent money manager. Has built top-ranked credit and hedge funds, managed billions for institutional and high-net-worth clients. 29-year career.