I’m not screaming fire, but I do smell smoke. Like I’ve mentioned before I may be in a huge feedback loop where I am only reading and seeing information that supports my thesis that the financial world is on the precipice of a giant reset.
I screamed fire a year and a half ago and for a small moment I looked like a hero. The market tanked in January 2016, but the powers that be stepped in and quickly put out the fire. So me saying I smell smoke is kind of meaningless because I’ve been smelling smoke for a very long time.
Even without Trump and Kim Jong Un in a pissing match being exchanged over twitter we have signs of stress everywhere. What frightens me is the amount of really smart people singing the same tune. Shit ain’t right. Real estate prices are a symptom. And when you dig into the collapse of 2006 you see that real estate pricing and their inevitable crash were also just a symptom.
Is this time different. Have the Uber and AirBnbs of the world changed out financial system so much that business cycles no longer matter? (don’t ask Snap Chat or Blue Apron that question).
Do yourself a favor and google stock market bubble, bond bubble, credit bubble. Read a little history on the bubbles of 2000 and 2006. And prepare yourself. Just like we should have an emergency plan in the even of an earthquake we should have a financial plan.
Or don’t. Maybe I’m completely wrong. Maybe I’m the crazy prepper stock piling MREs and canned food waiting for the eventual end of the world. But at this point of my life I can’t afford to lose 20-50% of my life and retirement savings. If you look at the S&P 500 the general trend is up, but if those horrific bubbles pop at an inopportune time in your investment horizon it can be hard to recover from. Imagine being close to retirement in 2007? You just lost 40% of everything. It took the market 7 years to get back to where it was at the peak in January 2000. After the bubble popped in 2007 it took about 5.5 years for the market to get back to where it was at that peak. That math only works if you are a diehard buy and hold fanatic. Everyone has a plan until they get hit in the nose.