Watch Out: FOMO Trading Is Back

How to avoid following the herd off a cliff… [Morning Reckoning] June 13, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Watch Out: FOMO Trading Is Back - Fear of missing out leads investors to make rash (and stupid) decisions… - Can the good times keep rolling? - Or will these trends run into some trouble as the summer heat approaches? [New Biden Bucks Follow-Up Available Now]( Hey, it’s Jim Rickards. Since posting my original Biden Bucks presentation online, millions of people have viewed it. Snopes and the Associated Press have even attempted to “fact check” me and claim my warnings are false: [Click here to learn more]( Point being, my message has raised a storm and caused a lot of controversy. But in the time between my message and now, a lot of new developments have come to light. That’s why I’ve just released an update to my original prediction… one which will likely be even more controversial. [>> Click here now to access my new 2023 Biden Bucks follow-up](. [LEARN MORE]( Baltimore, Maryland June 13, 2023 [Greg Guenthner] GREG GUENTHNER Good morning Reader, FOMO is finally back! Fear of missing out is one of the most powerful forces in the market. When conditions are just right, FOMO latches onto our lizard brains, leading to terrible investing decisions. We chase overbought stocks, fall for dubious stories and scoop up shares of some of the most risky, speculative garbage companies we can find. What could possibly go wrong? Well… everything, of course. To be fair, I’m not knocking stock market speculation. After all, I’m a trader. I have no trouble buying less-than-perfect stocks or flipping shares of fundamentally challenged companies. Different stocks and sectors fall in and out of favor all the time. And improving or deteriorating fundamentals have little to do with short-term performance. Market conditions and narratives are the main determinants of how a stock will perform over shorter time frames. Consider the broader market narratives and how they’ve evolved since late 2022… Many stocks — including mega-cap leaders Apple Inc. (AAPL) and Tesla Inc. (TSLA) — were in free-fall in December. Investors had endured a painful correction lasting the entire year. Not only were the averages in bear market territory — the popular Covid Bubble stocks had been decimated. Anyone heavily concentrated in these names was sitting on huge losses — far deeper than the 20% correction in the S&P and 30% drop in the Nasdaq Composite. It’s safe to say that most (if not all) investors were less than enthusiastic about stocks heading into 2023. Then, a funny thing happened. The market rallied. A few weeks later, stocks were still zooming off their lows. But no one believed it. We’ve talked about these early-stage bull moves before: the disbelief rallies. After a few failed relief rallies leave overeager buyers stuck in their trades, most folks simply give up. Then, when a rally does finally stick, the market’s cried wolf so many times that most investors simply don't trust the move. They sit on the sidelines and wait for the market to prove itself. This perfectly describes the market action during the first quarter. Most analysts, fund managers, and individual investors simply did not believe that the rally would last. Instead of buying stocks, they waited for the market to roll over. But the averages weathered their first meaningful pullback in February. They also survived a banking crisis the very next month — and even rallied into the second quarter. In fact, every single time the so-called experts said the market would roll over, we saw another rally. As the S&P approaches year-to-date gains of 15% and tops its August 2022 relief rally highs, we’re finally seeing investors come around to the idea that the market has turned a corner. But not everyone is happy about it. [New “WiFi Crypto” Token is Going NUTS!]( Only a handful of crypto investors know about this… But there’s a tiny, affordable device… That’s paid investors real crypto – every day, with zero work… Just for having a working WiFi connection! It sounds crazy, but it’s true… And [this 3:28 video]( explains everything. [Click here to view it NOW](. [LEARN MORE]( The Chase is On! “People will hate on this stock-market rally,” a recent Bloomberg Surveillance note begins, “They'll say it's fake, or just a handful of tech stocks making everything look better than it is. But the bottom line is, the S&P 500 and the Nasdaq — and especially the Nasdaq 100 — are up significantly, despite all the naysayers, and that alone is enough to drag cash in.” There’s that FOMO talking again… It’s not only retail investors getting “dragged in” to this rally. The pros are also getting sucked back into stocks. Fund managers who missed the earlier stages of the rally that began in January are significantly lagging their benchmarks. The big-tech Nasdaq 100 has already gained 35%-plus year-to-date! If you’re managing money and you’ve been twiddling your thumbs worrying about elevated valuations in this group, you might be in a bit of trouble here. The runaway performance of the big tech names has created a hold your nose and buy situation that’s powering this rally higher into the summer months. As Citigroup’s Stuart Kaiser explains in that very same Bloomberg piece, “We are reluctantly staying in the tech trade.” In other words, get onboard — or your job might be in jeopardy. Now, we have the strongest stocks attracting even more attention. Mega-cap tech, semiconductors and artificial intelligence names are rolling as summer approaches. Can the good times keep rolling? Or will these trends run into some trouble as the summer heat approaches? Buying Into the Summer Doldrums Now that the herd is backing up the truck and pushing many market leading stocks to new 52-week highs, we should take a moment to see how the S&P fares during a typical pre-election year. Here’s a look at the S&P 500’s year-to-date performance, overlaid with a typically pre-election year: [chart] A couple of key takeaways from this comparison… First, don’t get too hung up on the S&P’s performance perfectly mirroring the pre-election year composite. The trend is what counts. And so far this year, it’s closely followed a typical pre-election cycle. Next, take a look at how the composite behaves at the end of the second quarter. In a pre-election year, the S&P typically tops out at the end of June and remains in a range until an end-of-year push in November - December. Will the market follow the blueprint this year? I doubt it will match up perfectly. But the composite does give us a general idea of what we could expect as this rally matures. Plus, it’s fitting to see so many investors scrambling to buy just as the cycle is potentially topping out into July. The market loves to get everyone bulled up at the wrong time. No one wanted anything to do with stocks when they were ripping in January. Now, they’re buying with both hands into a potential short-term top. What do you think? Is the market running too hot? Or, will the good times roll through the summer? Let me know by emailing me [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Over 62 And Collect Social Security? Take Action Immediately!]( [Click here to learn more]( [If you’re over the age of 62 and currently collect Social Security, you need to prepare now](. Because Biden has given our country the worst inflation in decades – and many warn things will only get worse from here. Worse yet, the Social Security check you receive now may not keep pace with inflation… [Which is why, if you don’t act now, you could fall behind in the months ahead](. Is your retirement at immediate risk? [Click here now to get the simple, step-by-step actions to survive inflation](. [LEARN MORE]( In Case You Missed It… Oh, Rats! NYC, We Have a Problem! Sean Ring, Editor [Sean Ring] SEAN RING Good morning Reader, Greetings from the home of the rat race run daily, New York City. This week, I’m here teaching interns at one of the big US banks. It’s a short three-day program, so I’ll be back home Saturday morning. You’d think after the government-mandated private sector shutdown of 2020-2021, New York’s biggest problem would be to get people to come back. But they have, to a certain extent. I still think my Paradigm colleague James Altucher is right, rather than Seinfeld, in that NYC’s heyday is long gone. My problem is that I’m anchored in Giuliani-era New York. I graduated in 1996 from Villanova, so I came to NYC when it was Disneyified. Note: “Disneyfied” in the 1990s meant “cleaned up,” rather than its 2020s meaning of “turned to crap.” Examples: 1996: “Oh my God! Times Square has been Disneyfied! It’s so clean compared to the 80s!” 2023: “Oh my God! Kathleen Kennedy Disneyfied Star Wars! Now no one wants to watch it!” I can’t believe I’m writing about rat infestations in major cities. But teaching last year in NYC blew me away. So far, nothing this year has changed my mind. Last August in NYC I spent a full month in New York last July and August teaching graduate programs for two of the megabanks here. I hadn’t been back in years, and I was keen to see my colleagues, so I enthusiastically accepted the assignment. We were staying Downtown, so I thought my British and Irish colleagues would enjoy a drink at Fraunces’ Tavern. That’s where George Washington announced he’d resigned his commission and would return to civilian life. Shortly before noon that day, Washington assembled about thirty soldiers to the Long Room at Fraunces Tavern for his last goodbye. There is only one known complete account of this event, [written by Colonel Benjamin Tallmadge](. In his 1830 memoir, he recounts: “We had been assembled but a few moments when his excellency entered the room. After partaking of a slight refreshment in an almost breathless silence the General filled his glass with wine and turning to the officers said, “With a heart full of love and gratitude I now take leave of you. I most devoutly wish that your latter days may be as prosperous and happy as your former ones have been glorious and honorable.” After the officers had taken a glass of wine General Washington said, “I cannot come to each of you but shall feel obliged if each of you will come and take me by the hand.” General Knox, the closest officer to Washington, walked up to the General and the two hugged and kissed with tears running down their faces. Tallmadge recalls, “In the same affectionate manner every officer in the room marched up and parted with the general in chief. Such a scene of sorrow and weeping I had never before witnessed and fondly hope I may never be called to witness again.” It’s a wonderful pub, with a museum attached. I thought it’d be a great idea to drink over our shared history. We noticed there were open seats in front of the pub on the street. As it was a glorious night, we thought we’d sit outside and enjoy it. Little did we know we were encroaching on claimed territory. Not five minutes after we sat, the rats came out in full force. No joke… these rats were running from one sewer hole to another, with the route running under our chairs. It was positively revolting! We ran back inside to finish our drinks and then hightailed it out of there. I’m sure it’s not Fraunces’ fault. It’s crap city management. That opinion was confirmed when NYC Mayor and Chief of Uselessness Eric Adams appointed a “rat czar.” [Urgent: Currency Wars Alert]( “Worst case scenario is almost inevitable” -Former Pentagon Insider Jim Rickards [Click here to learn more]( In my 2011 book, I warned that the U.S. was engaged in a currency war. And that these wars: “Degenerate into sequential bouts of inflation, recession, retaliation and actual violence as the scramble for resources leads to invasion and war. ” Now with Putin invading Ukraine…Rising tensions with China… Inflation, recession, and supply chain issues all hitting the U.S. economy at the same time. It seems as if some of my worst fears have finally come true. [That’s why I’ve recorded an urgent video message.]( To update you on exactly what you need to be doing to protect yourself. Because if history is any indicator, this will not end well. [Click here to view my urgent video message.]( [LEARN MORE]( What’s a Director of Rodent Migration? I guess we don’t hate the Russians so much to stop using the term “czar.” But if the unions only let innovation have its way, we’d probably not need one. For instance, when I was in Florence earlier this year, I noticed the Florentines innovated their trash stash and collection. It was so cool! [trash removal in Florence] Credit: Sean Ring Basically, the garbage cans are attached to the top of a huge underground trash box. When it’s time to collect the garbage, the garbage truck lifts up the box by the can with a crane. Then the trap door underneath opens and the trash goes into the truck. No garbagemen! Now that’s innovation. Alas, NYC doesn’t innovate in such ways. So Mayor Adams appointed Kathleen Corradi as New York City’s first-ever director of “rodent mitigation.” From [The New York Times]( Ms. Corradi is not a trained rodentologist. A former elementary school teacher, she developed the city’s Zero Waste Schools initiative while at the Education Department and led the agency’s rodent reduction efforts. She will oversee the city’s existing army of rat experts. The city’s Department of Health and Mental Hygiene already has a rodent biologist on staff, the renowned urban rodentologist Robert Corrigan, who has been busy installing movement sensors on city streets to monitor rat behavior. The health department also has an Office of Pest Control, and there is a citywide rodent task force. Mr. Adams said Ms. Corradi will connect those bodies with agencies like the Department of Sanitation, in a concerted push to help battle some of the city’s longest-tenured and most notorious residents. “You’ll be seeing a lot of me and a lot less rats,” said Ms. Corradi, who will be paid $155,000 a year. I can think of a lot of places where $155,000 could go. But we wouldn’t want a repeat of The Black Death, would we? The Black Death of 1347-1350 Rats played a significant role in the spread of the Black Death, the devastating pandemic that occurred in Europe between 1347 and 1350. Also known as the Bubonic Plague, the bacterium Yersinia pestis caused it. The primary carriers of Yersinia pestis are fleas that infest rats, specifically, the species known as the black rat (Rattus rattus) and the brown rat (Rattus norvegicus). During the Middle Ages, these rat species were commonly found in cities and towns throughout Europe. The transmission of the disease occurred in the following way: fleas would infest rats and feed on their blood, ingesting the Yersinia pestis bacteria. When infected rats died, fleas would seek new hosts, including humans. When a flea bit an infected rat and then bit a human, it transmitted the bacteria into the person's bloodstream. The dense rat populations in urban areas, combined with unsanitary living conditions, provided the perfect environment for the rapid spread of the disease. Rats would infest homes, streets, and markets, bringing infected fleas into close proximity to humans. Additionally, rats' tendency to travel on ships facilitated the spread of the disease between different regions. The Black Death devastated Europe, with an estimated 25 to 50 million deaths during the epidemic. The disease spread quickly, causing high mortality rates and significant social and economic disruptions. It would take Europe centuries to recover. Besides our historical lesson, there are some very real reasons to keep the rats at bay. [Man Who Predicted Bitcoin Warns: “Don’t Buy Bitcoin!”]( [Click here to learn more]( James Altucher first predicted Bitcoin all the way back in 2013… And ever since, he’s been one of the biggest advocates for it. But now, he’s warning Americans that buying Bitcoin could be a big mistake… [Click here now to see why](. [LEARN MORE]( The Genuine Dangers of an Out-of-Control Rat Population Let’s face it. We children of the modern and postmodern eras have merely thought trash laying around is “disgusting” or “ugly.” It’s rare to have the prescience to think it’s a health hazard. After all, we haven’t had to worry about that for a good, long while. Sewage systems and trash collection were invented a long time ago. And it was working just fine up until recently. So let’s refresh ourselves on why an out-of-control rat population is a real danger: - Health Hazards: Rats are carriers of various diseases transmitted to humans. They spread bacteria, viruses, and parasites through their droppings, urine, and bites. Some of the diseases associated with rats include leptospirosis, salmonellosis, hantavirus, rat-bite fever, and plague. These diseases cause severe illness and death. - Property Damage: Rats have strong teeth that continually grow, leading them to gnaw on various objects to control the length of their teeth. They cause significant damage to buildings, infrastructure, electrical wiring, and pipes. Chewed wires result in electrical fires, and structural damage weakens buildings, posing risks to occupants. - Contamination of Food Sources: Rats are notorious for contaminating food supplies in storage facilities, warehouses, restaurants, and homes. They can chew through packaging, leave droppings and urine on food items, and spread pathogens. This contamination poses a significant risk to public health, leading to foodborne illnesses. - Damage to Agricultural Areas: Rats are awful for agricultural areas surrounding cities. They destroy crops, feed on stored grain, and damage farm equipment. This results in losses for farmers, lower availability, and lower affordability of food. - Negative Impact on Tourism and Business: A city plagued by a severe rat infestation suffers from a damaged reputation. The presence of rats in public spaces, restaurants, or hotels deter tourists and visitors. Additionally, businesses lose financially because of rate damage and the subsequent expenses to fix the problem. - Ecological Disruption: Rats have adverse effects on local ecosystems. They prey on native bird eggs and compete with other small mammals for resources, disrupting the balance of local wildlife. This leads to a biodiversity decline. Wrap Up Only in America? Nah, it could happen anywhere with pisspoor government oversight. I wonder if Mayor Adams even thought of privatizing garbage collection. Why not? It would almost certainly be better than this government service. But more than that, rampant rats dent NYC’s reputation and keep people away. And no big city can afford that post-government-mandated private-sector shutdown. Let me know what you think by emailing me [here](mailto:feedback@dailyreckoning.com). Have a good rest of your week! All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com Twitter: [@seaniechaos]( Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](