And it’s time, time, time
And it’s time, time, time
That you love.
And it’s time, time, time.
– “Time,” Tom Waits
YOUGHAL, IRELAND – Yes, it’s time that you always run out of.
You wish you’d spent more time with your children and grandchildren. You wish you’d saved more for your retirement.
You wish you’d invested in stocks 30 years ago. You wish you’d taken the time to learn to play piano or speak French.
But you’re out of time…
Our old friend Richard Russell was a devotee of Dow Theory. The theory consists of a series of observations.
For our purposes today, Dow Theory says that when the Dow hits a new high – confirmed by the transportation average – it’s time to buy. The “primary trend” is bullish.
Accordingly, we got a buy signal yesterday. CNBC reports:
The Dow closed at its first record high since January on Thursday as gains in Apple and a decrease in trade fears lifted the 30-stock index. […]
Art Cashin, the director of floor operations for UBS, said the Dow’s record should be a bullish confirmation of the high reached by the Dow Transports last week. “That should be a Dow theory buy signal,” Cashin said. “According to the theory, the economy is supposed to be improving and therefore, you have six to nine months of a higher stock market.”
And who knows? Dow Theory could turn out to be right.
Or we could just be out of time.
Donald J. Trump tweeted a big “congratulations” to the U.S., as if high-priced stocks were something to be proud of.
But overpricing assets is an invitation to sorrow, not joy. When compared to economic output, stocks today are more expensive than they were even in 1999. Our Dow-to-Gold ratio clearly tells us, too, that it’s time to get out of stocks and into gold.
Markets and economies have their youth, their seasons, and their sell-by dates. We celebrate our birthdays, but our remaining time shrinks.
Markets grow old, cranky, and forgetful – just like we do. This bull market on Wall Street has been running since March 2009 – for nearly 10 years. As we see below, it’s beginning to forget where it left its keys.
And the expansion of the economy – the recovery from the crisis of ’08 – has been going on since January ’09. It will hit its 10-year anniversary in just three months, making it a Methuselah of a business expansion – the oldest one ever recorded.
Shuffling and hunched over, it, too, must be running out of time.
Out of Time
Summer ran out of time yesterday.
Here in Ireland, a storm blew up a few days ago. The trees bent over. Rain lashed the window panes and rattled the doors. The wind was so strong, it blew a trailer off a cliff, killing a Swiss tourist.
Stormy weather on the Irish coast
(We went up to check on the roof we put on our barn in the summer. We’re pleased to report that it’s still in place.)
Alert readers and long-time Diary sufferers will expect us to draw a parallel… Buying stocks today must be like camping on the edge. And while there might be a thrill in being so close to the wind and water, it may not be worth the risk.
We could also bring up an example – say, Tilray – to show what a mad, mad, mad world Wall Street has become.
After all, Tilray is a dope company. After its CEO appeared on television earlier this week, the stock price nearly doubled. Then, it lost all of those gains within an hour.
Our colleague Chris Mayer reports that, in terms of dollars, the Tilray spike is likely the largest short squeeze in history.
And while there is a lot of money to be made in weed, perhaps someone needs to remind investors that there’s only a lot of profit in marijuana because of the War on Drugs. Make it street-legal, and marijuana becomes like wheat or corn – a commodity with thin margins and no pricing power.
So why would anyone in their right mind pay $22 billion for a $28 million (in revenues) company with margins that are doomed to shrink?
We don’t know. But judging from the action this week, investors don’t know, either.
One minute, they’re looking out on fair skies and weed as far as the eye can see… The next, hurricane-force winds are plastering the plants to the ground, destroying the entire crop.
Time Goes On
But today, we eschew easy and obvious metaphors. Instead, we return to where we were yesterday. That is, we return to time.
You can’t stretch time. You can’t adjust it. The feds can’t fiddle it. The Earth turns. Time goes on… no matter what you think.
Looking at time helps us connect the dots. We saw yesterday, for example, how time gets absorbed by the media and politics.
Different Deep State camps fight it out – red versus blue… liberal versus conservative… Kavanaugh versus Blasey Ford – and you’re expected to pay attention and take sides. With or against. Us versus them.
But what is really at stake in these squabbles? Are they as phony as the War on Trade… the War on Terror… the War on Drugs… or the War on Poverty?
Are they part of the great circus that takes up our time… and distracts us from what is really going on?
If he had more time to pay attention to it, the typical fellow might feel the hand picking his pocket… and notice how the feds and their phony money have eaten away at his time.
As we wrote on Wednesday, the average person now works about 36 hours a week just to live in the average house, drive the average car, and pay for the average share of government – that’s more than twice as much time as he worked in 1971.
But the average workweek in the U.S. is now only 33 hours. So he can’t keep up. He falls behind. He has to borrow time from the future.
Debt is time brought forward. If you owe $100 and earn $25 an hour… you’ve committed (used up) four hours of your time that hasn’t come yet. The more you owe, the more of your future is claimed by the past. Eventually, your whole life disappears into debt slavery.
The feds now owe $21 trillion. There are 250 million adults in America. But only 150 million of them have real jobs, earning an average of $26 an hour.
You can do the math yourself. But what it tells you is that there are no plausible circumstances in which that debt could ever be paid off.
At a reasonable interest rate (the Fed is aiming for 4%), the typical working person will lose about half a day a week just to service the “national” debt.
But it’s impossible. He is already in the hole by three hours a week. He has no time left. All the feds can do is pile up more debt – more claims against his future.
The poor fellow is trapped.
There are not enough hours in his workweek to pay his current expenses (including his share of the government budget).
And the further ahead he looks… the more he sees his time has already been garnished. It’s as if his pay were docked to support a child he never had, never saw, and from whom he never got a hug.
And yet, he will work from now until Hell freezes over to support the little bastard.
TECHNOLOGY INSIGHT: THE NEXT CONSUMER ELECTRONICS CRAZE
By Jeff Brown, Editor, Exponential Tech Investor
We’re on the cusp of the next consumer electronics craze…
I’m not talking about a new iPhone or iPad. It’s something else entirely.
What I’m referring to is the massive trend underway for augmented reality (AR) applications.
You’ve likely already heard of virtual reality.
Virtual reality takes you into a completely artificial space… There’s no natural light, only computer graphics. It replaces the world you see normally with a virtual world you can interact with.
Augmented – or “mixed” – reality is different. With AR, graphics, images, or data are overlaid on top of the world you normally see.
You’re able to view the real world. But it’s augmented, or mixed, with these other visuals.
Why do I say AR will be the next consumer electronics mania?
As a reference, consider the popular smartphone game, Pokémon Go.
The game lets you view the world through your smartphone camera, but it overlays images of these Pokémon – animated “pocket monsters” who “live” in the augmented reality world alongside humans – on top of it.
So you might look at a park and just see a park. But if you look at the same park through Pokémon Go, you might see a little animated character standing in the real-world park.
How a Pokémon Go character appears in your real-world view on your screen
The aim of the game is to catch and catalog the hundreds of Pokémon characters within the game’s world, and battle against other Pokémon characters.
The game was an overnight success. Twenty-four hours after it launched, the number of users was 50 times higher than the developers originally expected.
Google had been tasked with providing the computing and storage power for the game. But the Google servers crashed several times as demand for the game skyrocketed.
The success brought to light the pent-up demand for AR applications. It’s obvious that these kinds of applications are not for a small, niche market. Quite the opposite.
And big tech companies have gotten the message.
For instance, Apple has what’s called ARKit. It’s a platform that lets you create AR apps on top of Apple’s operating system, and sell them in the App Store.
Google also has an AR application platform. It’s called ARCore. It’s a similar idea – a platform that lets third-party developers create AR applications that can run on Android smartphones.
And just this week, Resolution Games, the company responsible for the smartphone game Angry Birds, released a video of users playing the popular game on an AR headset. The video speaks for itself.
All told, the market for augmented and virtual reality is forecasted to grow to $209 billion by 2022.
AR will be the must-have consumer electronics technology of the next two years.
But it won’t stop there. AR technology will eventually replace the smartphone in your pocket.
I know that sounds like a bold claim. But I’ll show you why, and reveal how investors can profit, tomorrow morning in the Saturday Diary.
Be sure to check your inbox then.
– Jeff Brown
P.S. One other thing… Bonner & Partners and I recently published a free research report. It’s called Jeff Brown’s Tech Manifesto. In it, I show you how I spot fast-moving technology companies before they go mainstream. And I’ll also share with you the biggest tech trends I’m following today.
The report is yours for free. All I ask is that you join me on Wednesday, September 26 at 8 p.m. ET for an online webinar. On that date, I’ll show you the one piece of technology that’s poised to revolutionize our modern communications, and make investors rich in the process. Get the details, and your free report, right here.
America’s Trade War Headache
The trade war between China and the U.S. is about to escalate. Starting Monday, 10% tariffs will be slapped on more than $200 billion worth of Chinese goods. And now, the trade war is starting to having real effects on America’s Main Street economy…
How Trump Takes on Big Tech
Last month, President Trump accused Silicon Valley giant Google of “rigging” search results to stifle conservative-leaning viewpoints. Google denies the claim. But now, Big Tech is squarely in the crosshairs of the Trump administration. Here’s how the showdown might shake out…
In the mailbag, dear readers consider how to get rich in the Swamp…
You failed to mention that our beloved Congress actually allows lobbyists to write the bills put before it. Then, it votes those bills into law, unread. Is it any wonder that those bills are full of pork and giveaways to the Swamp critters?
A perfect example is healthcare. The Canadian law that guarantees healthcare to every Canadian citizen is reportedly 13 pages long. And as you said, the mess known as Obamacare runs over 2,000 pages… America is a long way from the universal healthcare that Canadians enjoy. One has to wonder exactly what’s in those other 1,987-plus unnecessary pages.
Does anybody really know? Has anyone actually read the entire thing? “Swamp” isn’t the right word for it. I suggest “Cesspool” or “Septic Tank.” Both are more accurate.
– Dale A.
You say the Swamp remains the same. I beg to differ. Since October 2017, there have been over 6,600 resignations of CEOs, CFOs, and other major players at companies, small and large. Not convincing? How about over 50,000 sealed indictments? Still not enough? At least 50 House members are not seeking re-election or have resigned.
Do some research. Trump – whether you like him or hate him, and judging by your scathing editorials, you do not like him – is draining the Swamp, as promised.
– Roy M.
Meanwhile, after Wednesday’s Diary, “How Politics Poisoned the Earth,” one Dear Reader points out that things might be even worse than Bill fears…
Bill is right in that income has not gone up in terms of purchasing power, and that things cost more in time than they did. But he missed two additional points that make things worse. First, as income goes up (in nominal dollars), the government take goes up as a percentage of the total; the wage-earner loses ground here.
Second, Bill’s Ford F-150 example understates the real cost. Consumer Reports says that base models rarely can be purchased, and that they lack important safety equipment. Fully equipped (who needs it all?), the F-150 tops $60,000.
– Rodger B.
A FREE REPORT FROM JEFF BROWN
Have you claimed your free report from Jeff Brown?
Bill’s go-to technology analyst recently published Jeff Brown’s Tech Manifesto. In it, Jeff shows how he spots the fastest-moving tech stocks before they take off… and how you can, too.