Once Upon A Time

Once upon a time…blah, blah, blah. The fairytales about our economy that governments, bankers, Wall Street, and conventional investment advisors have been telling us are seemingly not coming true.

I am feeling increasingly cynical.


The following news items from the past few days made me realize I’m not being cynical enough.

The World Bank has a new Vice President and Treasurer, Madelyn Antoncic. According to World Bank President Robert Zoellick, “The new VP has an extensive background in the financial industry and a demonstrated record of leadership, innovation, and integrity.”

Hmmm.

The new VP and Treasurer was the old Chief Risk Officer at Lehman Bros while they were lying to the world and going bankrupt…and she had been there since 1999. That’s not going to have a happy ending.

Then we have the European Central Bank and the EU that think Greece with 160% of debt to GDP can be helped by increasing it to 170%. Let us think about this for a second: the Greeks, who cannot afford their current lifestyle, would like to extend their current lifestyle by tacking on another 10% of debt to GDP.  That’s not going to have a happy ending.

And if that’s not enough, then there are the 50 U.S. states' pension plans that have $1.94 trillion in assets and liabilities of $5.17 trillion. I did the math for you; the difference is a short fall of $3.23 trillion.

Now let us consider for a second that the people running these pensions are conventional thinkers. They have calculated that their funds will grow at 8% a year, even know this has not happened in over a decade. And then consider that 50% of that fund is probably in bonds growing at 3% a year.

That means the 50% that is made up of stocks must grow every year on average at 13%. Does anyone really think the conventional investment advisors behind these funds are going to get that return? Even if they started to get that return today and kept it for the next ten years, which they won’t, they will still be way underfunded. This is a tragedy, not a fairytale.

So what should we do, other than get more cynical?

My answer: Put a healthy dose of skepticism in your breakfast cereal each morning and follow the charts.

Look at price charts. They are the documentaries to the fairytales that you may hear conventional investment advisors try to sell you.

It is very hard to keep secrets hidden in price charts. Companies can lie about earnings, revenue, and growth but the price chart never lies.

Looking at price charts and trends of investments is about learning what the company is really up to and about.

Look to the charts.

So what are the charts saying?

To keep this missive upbeat, let’s look at sectors that are breaking out to new lifetime highs.

There is nothing more bullish then an entire sector that has broken free of its last major lifetime high and is consistently creating new lifetime highs.

Remember:  buy strength and sell weakness.

Below are five sectors that are having a “fairytale” time of it right now.

The first price chart is showing the Brewers sector. Included in this sector are companies like Budweiser and Coors. The black horizontal line on the chart is the Brewers’ Sector last lifetime high. Notice how this sector has rocketed right through that old high.
 

The second chart is of the Tobacco sector. Companies included in this sector are the makers of Marlboro, Lucky Strike and Winston. Again, notice how Tobacco has broken out past its old lifetime highs set in 2007. 

The third chart is of the Fast Food sector in the US. This sector contains Fast Food chains like McDonalds and Taco Bell. Again look how cleanly this sector has broken out to new lifetime highs. 

The fourth chart is of the retail sector in the US. This sector contains stores like Bed Bath and Beyond and all of those “Dollar Stores” popping up all over the place. Again, the entire sector is breaking out to new lifetime highs.

 

The fifth chart is the drug industry. The industry that brought us Prozac and Viagra has just recently broken out to new lifetime highs. 

So, all in all, we have five sectors that are hitting new lifetime highs. We have drinking, smoking, eating, retail therapy and medication all hitting new lifetime highs. This story isn’t getting any better.

But it’s not just in fairytales that strategies can grow at twenty plus percent compounded annually.

I just updated the returns of my strategies for a prospective Private Elite client and he almost fell off his chair.

I showed him the chart below. The “L-TEC”, “MP”, and “MOS” are all my strategies. I’ll tell you in a moment how you can learn about them…completely free.

All the numbers below are presented in compounded annual returns and is updated to June 28th 2011. 

I often get questions about how or what make up these strategies. After many years of keeping the details of these strategies a secret I have created a presentation that describes each one in detail.

The presentation is FREE. And it’s one click away.

Before you click on the link let me make a two quick notes:

1)     I have not even had time to edit this presentation. So it very well could be that I left information in that I wouldn’t want the general public to see.

2)     I recorded this presentation late one evening after a crazy 12 hour day of meetings, market trading and private elite coaching calls. So I hope you appreciate the “rawness”’ of it.

To view this video you don’t even need to give your email or name. Just click on the button and watch the video that describes in detail how a fairytale-like set of returns can be yours.

As you can clearly get from this letter, there are a handful of sectors that are defying the markets and continuing to make new life time highs.

As I finish this conversation with you I am enjoy being with my family for a long 4th of July weekend in Silicon Valley. Some fairytales do come true.

Watch the Fearless Wealth Strategy video here.

Together, we are protecting and growing your wealth,
RC Peck

 

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