Transcription of last Friday’s “Market Situation Report”

This email is a full transcription of last Friday's "Market Situation Report". You are getting this transcription one day late because I'm currently at Lake Arrowhead in Southern California with my family.

We all synthesis information differently…and for some text is best. I hope you enjoy Friday's transcription. If you would prefer the video format, you can find it here

 What We're Doing is Working…

This is RC Peck the Sage of Silicon Valley and the creator of the Fearless Wealth Portfolio.

It's about 2 o'clock; the markets have been closed, at least California time, for an hour.

I have titled this week's Situation Report "What we're doing is working".

I want to focus in on one investment, one ticker symbol, and talk about how most people maybe approaching it the wrong way.  Though it probably feels like the right way to them.  But before we get to that let's look at what happened this week:

Currently the S&P 500 is hitting its 1440 ceiling, I'm not saying it won't go through it; though it feels like there is much more space underneath it than above it to move.

Ben Bernanke is speaking out again saying, he will do more easing if needed…and each time he says that the market cares less and less about it.

As the S&P 500 is hitting a ceiling the volatility index is bouncing off a floor.

Gold and Silver have been going up for 3 1/2 months. What are they seeing in the future that others are not??? Money printing? Europe kicking Greece out? They're seeing something coming our way for sure.

So what are we doing on Planet Fearless Wealth?

We are letting our strategies do all the heavy lifting.

You most people think that the more effort one puts into something the more money it brings them. But actually when people focus on results (and not effort) they get much more and quicker.

So let me give you an example.  In Figure 1 you are looking at a 10-year price chart for silver.  (Maybe a little bit longer than ten years).

8.24.12 Fig1.jpg

If you look down at the lower left you can see that Silver started around $4 and today it's at about $30.

Now look at the last two inches of the price chart, I have put in some lines to show you what is called a falling wedge.

A falling wedge is a very bullish technical formation.  Silver has been in a falling wedge since May 1st of last year when it hit $50.

Three times during that period Silver got smashed down to the $25 range and could not go any lower. It stopped.

Which tells me there are a lot of buyers (or very few seller) when silver hits the $25 handle.

I've talked about this a couple of times this year in my Situation Report.

That is what you see in Figure 1.  You see a very strong secular (which means long term) bull market in silver.

Here is what is working:  you never trade a bull market.  Like Never!  Really. You do know what the word "never" means right?

During a bull market in anything you buy and you consistently buy and gather and add and hoard and…well, I hope you get it.

Silver is in a secular bull market, which will probably last 18 years, which will be until June 2018.

You want to be collecting into that bull market. Notice that there is not a lot of effort involved?

Let's zoom in a little and look at Figure 2, which is a two-year chart of Silver.

8.24.12 Fig2.jpg

You can see that we have zoomed into that falling wedge.

You can see how Silver is just starting to peek out of it.

Now what happened the last time Silver tried to break out of its falling wedge back in February – it got shut down.

And fell back down to the $25 handle.

When it fell to the $25 level I came that week with a Situation Report talking about how when Silver hits $25 handle it seems to stop and reverse itself. And in fact that is what it has done.

It's up over $30 at market close today.

This could be setting up for a breakout.

Will it break out this time?

The more times an investment hits its upward trend the higher the probability it will break out.

Remember this is a falling wedge on top of a twelve-year secular move.

A falling wedge is a bulling formation and a 12-year secular trend is very bullish.

The longer the move (12 years) that leads into the wedge, the stronger the consolidation will be.  That is what is happening.

Now let's go to the 1 year chart (Figure 3).  We really zoom in to take a look at the last 12 months of Silver.

8.24.12 Fig3.jpg

If you really look at this, and only this chart, yes you would say "oh my gosh, silver is volatile, it's going down. Why would anyone buy Silver?"

And I could understand if someone said this only looking at the last 12 months. But their perspective would be off.

You have heard me pound the tables for years about how successful investors, people who don't get hurt, people who see the big picture, people who know when to be in or out, look at investing from the bigger picture. They can wait. They don't have to trade (effort) everyday (more effort). In fact most of the time they are doing nothing.

And I am not just talking about individual people that you don't know. I am talking about the biggest names on Wall Street; Jeremy Grantham, Bill Gross, Jim Rogers.

Big names, people who are billionaires. They measure their correctness in 36-month time blocks and not weeks or one year periods.

Notice how Silver broke right through the $28 mark.

The question is 'Will it stay'?

We obviously won't know until we look back.

But this is a very strong move and those who have gotten wealthier over the last twelve years have not traded silver or gold. They have hoarded it.

They have accumulated it over time.  And perhaps they have gone to therapists to get support in NOT selling their Silver (and Gold).

I often bring up the data point that from 1982 – 1980 the S&P 500 went up 18% compounded annually a year but the average investor grew their money 5% compounded annually. 

They grew their money 3 times slower.


Because their strategies were costing them their future.

It's the strategy that determines your future security and NOT the ticker symbol.

Fellow members have met other people who have traded silver the last 10 years and have gotten poorer. And when they meet one of Planet Fearless Wealth's members they say to them 'Wait a minute, silver doesn't work. It's broken and too volatile."

It's not the ticker symbol but the strategy that has you buy it.  That is what's working for us.

I'm so glad you are here with us. We (the Peck family) are packing up this weekend to fly to Southern California for the UCLA family camp.

My next monthly meeting is coming up September 11th and it's titled "US Elections, Is Your Portfolio Ready?"

Very different things will happen if Romney is elected as to Obama.

Each candidate wants different things to happen to the Federal Reserve.

Very, very different things that will immediately affect the marks on November 6th.

We will talk about that and how to position your portfolio.

I am so glad you are here.  And remember: it's together that we are protecting your money and your wealth.

Take Care.

Is your peer group holding you back? Our peer group defines the upper limits of our wealth. If you want to be wealthier than perhaps it is time to upgrade your investment peer group. Upgrade right here.

Together, we are growing and protecting your wealth,

RC Peck, CFP 

Fearless Wealth | Investment Independence
Helping Individuals Reach Financial Independence Sooner, Faster, Safer.