Dear Reader, Last October, Vern Gowdie issued FOUR ‘Code Red’ market warnings. So far, he’s dead on the money with each one. The idea behind his multiple threat warning is this… If one or two of these Code Reds fire, watch out. That’s a telling sign 2022 could be the year it all finally tips for the markets. If all four start to head south…that’s an even stronger sign a prolonged down market is coming. In such a scenario, it’s ALL in the firing line… Superannuation funds. Individual share portfolios. Crypto wallets. Property values. Corporate bond holdings. Even gold. All the things that add up to a person’s current net worth are at risk of being worth a whole lot less come Christmas 2022. So… What’s happened since Vern first gave these decisive warnings last October? Code Red #1 is growth tech stocks Vern warned… ‘Yet another generation of growth investors is walking into a well-set trap. ‘And, just like with the GFC, a very small number see exactly what’s coming. ‘They’re either selling — and leaving the dumb retail investors holding the bag (as always happens at the end-stage of an up-cycle). ‘Or…they’re making moves to actually PROFIT when the trend turns. ‘All the signs are indicating we’re in the late and highly-dangerous stage of the cycle with tech stocks.’ He specifically targeted Cathie Wood’s ARK fund as the ‘canary in the coal mine’. It has given investors 40% annual returns for five years before 2021. Since my 22 October warning, Ark has fallen a further 18.6%. Its total losses in 2021 are 34%. Close to $40 billion. Mainstream observers are now following Vern’s lead where there were virtually none last October… ‘Slowing Big Tech performance “a telltale sign of things to come”’, wrote CNBC Markets on 10 December 2021. Code Red #2 is cryptos No need for me to spell out what’s happened since there. You can’t have missed it. Colossal liquidations in the crypto markets commenced within two weeks of Vern’s 22 October warning. One Bitcoin [BTC] trader lost $2.5 billion in a single day in December. His 22 October warning was unequivocal about Tether. Vern warned this ‘Fed of the crypto world’ was the Trojan horse of the whole system. By 11 December, Investing.com was asking: ‘Is Tether the Biggest Risk to Cryptocurrency?’ Code Red #3 is bonds Bonds are thought of as ‘safe’. Vern warned ‘the bond market is going to be disaster zone. But just like it was in late 2007, no one is yet pricing in this outcome.’ Several months since this initial warning, it appears they may be starting to do exactly that. US Junk Bonds just experienced their biggest sell-off in more than a year. Yield curves are flattening ominously. ‘Bond market flashes warning sign over global economic growth’, The Financial Times is now reporting. The final Code Red Vern flagged last October was China At that time, the guessing game was still on. Would China’s Evergrande be the next Lehman Brothers? Would the debt-laden property developer be thrown a lifeline at the 11th hour? If it did, what signal does that send about greed and moral hazard? Since then, Evergrande has defaulted. But the jury is still out on what this is going to mean in 2022 for the world economy... What we do know is that if we see that big ‘reversion in the markets’ this year, China won’t be immune. The Middle Kingdom will be right in the middle of this next meltdown… And so, we’ve seen fairly decent down moves in each of Vern Gowdie’s Code Reds. So far… But they are yet to converge into a full-force crash in the markets. What happens next, in Vern’s view? And what’s a plan you can implement — now — to prepare for a ‘Great Reversion’ while the crowd remains in denial? This could be one of the most important pieces of financial advice we publish over the next 12 months. Click here to read it now. Regards, James Woodburn,
Publisher, Fat Tail Investment Research | 