An imminent crisis at the very CORE of the share
market Greg Canavan Sound Money. Sound Investments
If you think a stock market crash on a global
scale won't affect you, you need to think again...
As an Australian, you've been mandated by law to put 9% of your salary into
superannuation.
There is now $1.5 trillion in the superannuation system. The vast proportion of that is
in stocks.
With that in mind, I believe Australia could be facing a retirement crisis unlike
anything in the country's history.
You got a taste of it in 2007.
When the Global Financial Crisis (GFC) hit, retirement funds lost an average of 4.5%
each year for the next five years.
That was the worst performance of any other pension system in the world, bar
Iceland.
The Australian reported that by October 2011 many Australian retirees were being
forced into work after a $75bn paper loss in superannuation.
But that was just the warm up act.
You're about to witness the main event.
Over the last six months you've watched stock and bond markets reach near all-time
record highs.
Figures released on May 21st predict that super funds will reach their highest level in
16 years.
Now, unless you manage your super yourself, it's likely your manager has put
your money into a 'balanced' investment portfolio — mostly shares (which
include investments in hedge funds and private equity) and bonds.
The problem is all of those are in a massive bubble.
As I'll show you, potentially the biggest asset bubble since 1987.
Now all that central bank money has puffed up the biggest stocks on the planet.
The stocks that make up the lions' share of the value of the entire stock market.
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In Australia we have 10 stocks that make up about 70% of the market.
When these stocks blow...they're REALLY going to blow...
This is what keeps me awake at night. I've watched all year in amazement as this
current bubble gets pumped up at an astronomical rate.
We've seen national income — FALL.
Manufacturing - CONTRACT.
Unemployment — RISE.
The deficit — EXPLODE.
But you've also watched Australian super funds rise to their highest level since the
96/97 fiscal year!
That's right...
The last time super funds blew out to
this quickly was in the lead-up to...you guessed it...the dot-com bust.
What's driven your super fund higher?
It hasn't been resource stocks. They've tanked.
It's been the big, fat dividend-payers.
Chances are your super fund is heavily invested in the healthcare sector.
Well I hate to break it you, but Australia's healthcare stocks climbed roughly 42%
over the last 12 months, compared to the ASX's 22% gain. By any metric, healthcare
stocks are dangerously overvalued.
The banks are too...
The big four banks have been trading at near historic highs.
Even some industry analysts are now admitting this.
CIMB analysts now reckon local banks are about 20% overvalued on most
fundamental ratios. UBS analyst Jonathan Mott described Commonwealth Bank as
the 'most expensive large bank in the world by nearly every measure'.
These are 2013's dotcom stocks
But there's a whole lot more at stake if the big defensives start tanking.
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That won't just hurt the market.
These stocks ARE the market.
In fact many have just got a taste of what's in store...
Every defensive sector from finance to healthcare to utilities fell the hardest during
the last mini-sell-off that started mid-May.
The defensives LED THE MARKET DOWN.
That's your biggest warning signal of the lot.
I think that will happen...on a much more devastating scale...when the big crash
comes.
I don't think you'll find a single broker or fund manager in the country who could go
public with a prediction like that without getting fired.
But unlike most research firms, we have NO affiliation with the big banking houses
and brokerages. We're not paid to promote Telstra or Commonwealth Bank or
Westfield.
We're not paid to promote ANYTHING.
The only way we grow our business is by publishing ideas that make and save you
money.
So that brings me to the final part of this report...
If you even half-agree with my thesis... that the market is setting up for a dotcomstyle blow-up...
Everyone involved in the share
market is now a speculator!
Money printing creates a false illusion of wealth and prosperity. Most investors
realise this. So they speculate — whether they know they're doing it or not. They
know there is a chance of making some short-term money. They think they'll be able
to get out before the final whistle.
‘Bernanke has finally realized that the Fed has lost its battle with the primary trend. The Fed
and the economy are now at the mercy of the strengthening primary bear trend. Deflation,
which the Fed has tried frantically to hold back, is now taking over. The Fed would like to
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exit the battle field but it can't. The mere thought of the Fed giving up the battle to hold back
deflation terrifies the stock and bond markets.
‘Years ago Ben Bernanke stated emphatically that he would never, ever allow the nation to
deflate — even if he had to drop cash from helicopters to prevent it. But now deflation is
happening. And Bernanke, the academician who has never understood markets, is frozen with
confusion, consternation, and fear.
‘Everybody's escape, so far, has been to rush headlong into Treasury bonds. But that avenue
is no longer working (the bonds are sinking). The next avenue of escape is the dash for cash.
Cash today amounts to intangible Federal Reserve notes, which are fiat paper and actually
intangible financial garbage. The last and final avenue of escape will be to gold...’
What will eventually happen is the smart speculators will start to leave. A top will
form. Soon after, the more gullible ones will follow en masse. Then the fireworks
begin...
But what makes me so smart?
Why is my prediction any better than any other you read?
Warren Buffet is the best investor on the planet. He's bullish on stocks right now.
Am I really saying I know more than Warren Buffet?
No. I'm not saying that at all. But here's the thing... What Warren Buffett knows and
what he can say publicly are two very different things.
Buffett's Berkshire Hathaway currently holds a record US$49 billion in cash! If Buffett
is so bullish, why is he holding so much cash? Could he be heading towards the
sidelines?
Warren Buffet could never release a report like this under his
own name. I CAN.
I'm the Head Analyst at Port Phillip Publishing. We're a very
unique group. We're completely independent. Unlike Buffet, we
don't have legions of shareholders to soothe annually at the
AGM.
We don't sell advertising. We don't have to worry about ratings
or viewing figures. And if we DO make specific
recommendations, we don't accept commissions on them.
That means we are free to utter the dirtiest word in the financial
industry...
Greg Canavan
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SELL!
Advisors don't want you to sell. They want you to buy. You'll get no advance warning
of a crash from them. No matter how bad it gets, the big money managers will
ALWAYS stay in the game.
Buffet is as smart as he is rich.
But over 50 years he's never been anything but a cheerleader for US stocks.
What I'm able to do here at Port Phillip Publishing is report the facts as I see them.
‘Bernanke has finally realized that the Fed has lost its battle with the primary trend. The Fed
and the economy are now at the mercy of the strengthening primary bear trend. Deflation,
which the Fed has tried frantically to hold back, is now taking over. The Fed would like to
exit the battle field but it can't. The mere thought of the Fed giving up the battle to hold back
deflation terrifies the stock and bond markets.
‘Years ago Ben Bernanke stated emphatically that he would never, ever allow the nation to
deflate — even if he had to drop cash from helicopters to prevent it. But now deflation is
happening. And Bernanke, the academician who has never understood markets, is frozen with
confusion, consternation, and fear.
‘Everybody's escape, so far, has been to rush headlong into Treasury bonds. But that avenue
is no longer working (the bonds are sinking). The next avenue of escape is the dash for cash.
Cash today amounts to intangible Federal Reserve notes, which are fiat paper and actually
intangible financial garbage. The last and final avenue of escape will be to gold...’
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