Members have emailed me asking how they should interpret the job market data.
The headline number is that unemployment was 4.1% – that’s terrific.
On the surface, the economy looks strong and the market’s certainly been going higher.
But when you dig into the numbers, you see a little bit of a different story. And I think that story’s worth talking about.
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The Biggest Threat Facing America
You know I’m always looking to make you profits – and we’ve had a tremendous year!
But most important of all to me, is to protect your money, and mine from potential threats.
And this is the biggest threat I see facing America right now. Please, don’t ignore this one.
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When you look at the September jobs report, you see the U.S. economy created 785,000 new government jobs last month.
Which is the second largest on record.
Overall, government jobs accounted for 85% of the total increase in monthly payrolls. Meaning the private sector only accounted for 15% of the new jobs created.
And, sidenote – government workers now account for 22 million jobs. This is the largest number on record.
So our federal government is now bigger than it has ever been. No surprise there whatsoever.
Without the government adding so many jobs, the unemployment rate would be 4.5% instead of the 4.1% that was released.
So, how did we get here?
Well, at the end of every presidential turn in office, especially if the President is running for reelection or they have a VP that plans to, like Reagan did with Bush Sr. …
What they do is backload a lot of fiscal stimulus.
So we know the U.S. government borrowed $1.8 trillion under Biden-Harris.
That was backloaded so that for the fourth year in office the unemployment rate would be low …
People would have jobs …
They’d feel optimistic about the economy, the stock market would be moving higher, etc.
Now this is not unique to Joe Biden, although the scale of this one, whew!
I start to think about it like “the great manipulation” – it’s kind of crazy.
But, here’s the good news…
The good news is we own a lot of good stocks, the market’s been going up, and we’ve been able to take terrific profits.
Just in the past month alone we’ve taken 383% profits on Palantir, 160% profits on Rocket Lab, and we’re still finding opportunities.
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I need your decision…
We’re going to release our “buy alert” of the week Monday morning…
We just closed Palantir for a 383% gain…
That’s on top of the 160%, 150%, 130%, 76% and 70% gains we’ve seen with other defense stocks.
The only “catch” is that access to this alert expires in 48 hours…these opportunities move fast.
Please check this out while you still can.
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But look – don’t fall in love with this market.
This is a two-pronged market.
On the surface things look good …
But underneath the surface there’s a lot of fiscal stimulus just coursing through the veins of this economy.
There’s a story I want to share with you that I find helpful.
Benjamin Graham was Warren Buffett’s mentor who wrote The Intelligent Investor, Security Analysis and all these great books that have been very important in my life.
Ben Graham tells a story that when you buy a stock you basically become partners with Mr. Market.
It helps to look at Mr. Market as someone prone to bouts of euphoria and bouts of depression. Kind of a manic-depressive person.
So let’s say you and Mr. Market own a private business – you’re 50/50 partners in a private business that makes a million dollars a year and you cut it right down the middle.
Now some days your partner, Mr. Market, is very euphoric.
He thinks, “the world’s great! Blue skies ahead, everything’s amazing – OMG it’s the greatest thing in the world!”
And he says, “I want to buy your share of the business for [this crazy price].”
On other days, Mr. Market goes, “omg… we lost a customer today… the world’s coming to an end… I can’t handle it anymore… I just want to sell it. I want to get out.”
The idea here is not to take advice from Mr. Market, because Mr. Market is emotionally unstable.
The idea here is to take advantage of Mr. Market when he’s offering you a terrific price for your share of the business, or when he wants to sell his share for an absurdly low price.
Investing in the market is the very same thing.
Right now, we can see Mr. Market is very euphoric.
The only question I’ve been asking myself lately is:
“Is this 2006/‘07, right before the housing bubble popped?
“Or is this 1998/‘99 right before the internet bubble popped?”
Is it AI stocks? Is it housing?
Which asset bubble pops first?
Because we’ve had our share of asset bubbles in the last 25-30 years and, frankly, going back to the beginning of time.
You know, the good thing about the markets is, human nature doesn’t change.
Humans will always act a certain way based on fear or greed.
So we are taking advantage of Mr. Market’s euphoria when we sell Palantir for a 383% profit …
Just like Peter Thiel, the founder of the company, sold $1 billion worth of stock. He’s not stupid.
(And now, Palantir’s becoming heavily shorted but that’s another story.)
Bottom line here, remember “Mr. Market.”
Never forget that there’s something happening on top, and there’s a completely different story happening underneath the surface.
It’s my job and my mission to help you see “behind the markets” – the game behind the game – inside baseball, which is what we’re trying to call here.
On that note: Go Yankees! Go Mets!
Have a great weekend.
“The Buck Stops Here,”
P.S. I’m really proud of the profits so many of you have written in about from our recommendations this year.
But remember – most important of all to me, is to protect your money, and mine from potential threats.
Again, this is the biggest threat I see facing America right now. Please, don’t ignore this one.
