Dear {$esp_first_name|default:”Reader”},
Today I want to talk about what a lot of big names are talking about now…
JP Morgan put out a note predicting a recession based on tariff policies.
Carl Weinberg, another astute market analyst came out with a surprising note saying tariffs could see GDP take a 10% hit in Q2.
And economist Bruce Kasman came out saying he agrees.
The last “tax increase” we’ve had this large was 1968, which was followed by a recession.
I was at dinner the other night with a friend, a die-hard Trump supporter to the max, and I said to her, “look, just because you believe Jim Jones doesn’t mean you have to drink the punch. You don’t have to believe everything all the time. You’re allowed to disagree with some things.”
I agree with a lot of his policies, too.
I don’t have to agree with every one of them.
I’m an adult. I can make my own decisions.
We’re all big boys and girls.
I told her, “look, I’d be more optimistic if we weren’t ditching the same America-first trading system we created, invented, and put ourselves at the center of.”
As I’ve said many times, this really broke down when government idiots brought China into the World Trade Organization.
Before that, free trade worked well for us.
We were doing great before we brought a communist country with state-planned enterprises in.
They pushed their mass exports of low-priced goods and blew up the trading system as we knew it.
Those old-timers, Truman, Harriman, George Marshall – they knew what time it was.
Those guys invented America-first.
They were no patsies.
And then patsies in our government, in their arrogance, thought we could bring China in and they’d become democratic.
They exchanged cheap Chinese goods for the American worker.
They failed to understand China’s civilization, their century of humiliation, the great power competition.
And now we are facing a recession IF things stay the way they are.
If tariffs work in getting other countries to lower their barriers, they will be a success.
The problem is, we don’t know if that’s the intent anymore.
Because now they are saying they want to keep them no matter what.
If the tariffs don’t work and we stick with them anyway, it will go down as the single biggest economic mistake in recorded history.
Make no mistake about it.
You don’t need me to tell you that.
You intuitively know that. Because you’re awake.
But what I really want to talk about today is the recession.
Somebody said to me, “you’ve been predicting a bear market for a while.”
And yes, that’s true, but don’t give me more credit than I deserve…
When we released Midnight in America it’s because for one, the stock market has been just crazy overvalued…
We saw crazy euphoria like during the dot-com boom…
And it’s based on investment into companies, not return on investment. We’ve seen crazy P/Es, soaring gold.
When these things happen, the market crashes.
We don’t know which pin is going to pop the bubble, we just know it’s going to pop.
This time, it turns out it’s Trump’s tariff policy.
Before the bubble popped, we saw strong earnings and P/E expansion based on strong earnings…
In a recession, what happens is earnings have to get adjusted downward, which brings the whole thing down.
That’s what we’re seeing happen in the market right now.
That’s why Friday, small-cap stocks, the Russell 2000, officially entered a bear market.
We don’t need the Russell to tell us small-caps have been in a bear market.
We can look at the small stocks in our portfolios. Especially in biotech. But these biotechs will be fine – they are strong companies.
The good news is, the market is starting to give us wonderful little opportunities to swing the bat.
What I want you to do now is, if you haven’t picked up Midnight in America, it gives you four steps to take RIGHT NOW in this market.
Because again, bear markets happen once every four years on average, and the best thing about this playbook is, it will reduce your anxiety.
Because it will help you understand where we are, why, what’s in your control and what’s not and the exact moves to make, step-by-step.
“The Buck Stops Here,”
P.S. I just sent members a follow-up/supplement to Midnight in America Sunday night.
It’s my bear market shopping list of the 6 stocks I am personally loading up on starting now…
With precise instructions on how to build positions in each through this bottoming cycle.
This is exactly how I got rich from The Great Recession.
