What the Past Can Teach Us: Record Valuations, Rock Bottom Interest Rates & Bull Market Peaks

Surviving a Bear Market

Legendary writer and investor Dennis Gartman is fond of saying that the person who loses the least money in bear markets wins. KCR does not believe we can time the market. Yet we do believe a cursory review of stock prices can help those who may want to begin preparing for a bear market.  As our bear traders post showed – the damage of drawdowns should not be underestimated.

KCR has written a vast amount of research around stocks priced for the impossible. The most egregious examples are those stocks that violate the Sun Microsystems quote, which made the importance of valuation painfully obvious.   We have also cautioned against engaging in what we believe is rank stock speculation.

In October of 1928, The Sunday Courier And Journal of Evansville Indiana published the below graphic and the text on their front page. The article admonished investors in blunt language.  “Don’t be deceived by statements that are preposterous…Don’t trust the lying promises of get rich quick advertisers.”  When it comes to surviving a bear market, KCR believes this advice is as important today as in 1928!

October of 1928 The Sunday Courier And Journal of Evansville Indiana

Source: Newspapers.com,  “Feeding the Hippopotamus,” The Evansville Courier, October 14th 1928[1]

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The Best Investments during a Bear Market are Often the Ones you Do Not Make!

To reiterate: KCR is not trying to time markets, nor are we making a market call.  We are simply acknowledging that the combination of soaring geopolitical tensions and soaring oil prices is  suboptimal, with equities at record valuations and fixed income offering limited returns and significant risk.

The first chart below shows…

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[1] Source: Newspapers.com,  “Feeding the Hippopotamus,” The Evansville Courier, October 14th 1928

Disclaimer

The information, data, analyses, and opinions presented herein (a) do not constitute investment advice, (b) are provided solely for informational purposes and therefore are not, individually or collectively, an offer to buy or sell a security, (c) are not warranted to be correct, complete or accurate, and (d) are subject to change without notice. Kailash Capital, LLC and its affiliates (collectively, “Kailash Capital”) shall not be responsible for any trading decisions, damages or other losses resulting from, or related to, the information, data, analyses or opinions or their use. The information herein may not be reproduced or retransmitted in any manner without the prior written consent of Kailash Capital. In preparing the information, data, analyses, and opinions presented herein, Kailash Capital has obtained data, statistics, and information from sources it believes to be reliable. Kailash Capital, however, does not perform an audit or seeks independent verification of any of the data, statistics, and information it receives. Kailash Capital and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your tax, legal, and accounting advisors before engaging in any transaction. © 2021 Kailash Capital, LLC – All rights reserved.

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