Dear Reader,
Good morning and happy Tuesday!
I wanted to take a moment to discuss some insights from recent surveys that paint a clear picture of what’s happening in the market.
Bank of America’s research department recently released a survey that caught my eye: U.S. household allocation in stocks has hit 57%.
That’s near the highest level on record, and it’s doubled in the last 15 years.
In fact, the last time we saw numbers like this was right before the dot-com bubble burst.
Yes, we are right there—the average U.S. household is now as invested in the stock market as they were at the peak of the dot-com bubble.
But here’s the flip side of that story.
In a striking contrast, Bank of America also found that hedge funds and professional investors are sitting on more cash than they have in the last four years.
While retail investors have been rushing in, professionals have been quietly selling off their stocks over the last quarter.
This divergence between retail investors and professional money is why we’ve been advising our members to pull back, tighten their sails, and trim weaker positions over the past six weeks.
It’s a time to be cautious, to avoid getting overly aggressive unless a truly exceptional opportunity presents itself.
I outline the specific steps you need to take to navigate this in my new book, “Midnight in America”
It reminds me of a lesson I learned from Ted Williams, the last .400 hitter in baseball.
In his book, The Science of Hitting, Williams described how he broke down the strike zone into small boxes and only swung at pitches in the boxes he liked best.
That’s how he became a .400 hitter—by being selective, waiting for the perfect pitch.
That’s the approach I’m taking in this market.
Normally, I might have several boxes I’m willing to swing at, but in a market as extended as this, where retail investors are fully invested while professionals are sitting on cash, I’m only swinging at the very best pitches.
This is a market cruising for a bruising, and it’s not the time to be swinging at just anything.
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Get the name of the stock here >>>
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Before I go, I also want to touch on something many of you have asked about—the jobs report.
We’ve seen significant downward revisions in the reported numbers over the past five months, which suggests the job market is weaker than it appears.
I’ll be diving deeper into this in the coming days, but it’s worth noting how conveniently these numbers seem to be adjusted, especially in the year before an election.
But more on that later.
For now, stay cautious and be selective.
Wishing you a wonderful Tuesday!
“The Buck Stops Here,”
P.S. I don’t want you to worry…
And you don’t have to.
Because I’ve already written the playbook for you.
Remember, when the market goes down it’s like walking into the grocery store when everything is marked 90% off.
So do yourself a favor and prepare…
Because what goes up, must come down.
