| Hello Reader, Lately, I've been spending a lot of time on the radio. I host my own show where I—you guessed it—talk about personal finance and the markets, but I also guest spot on radio shows across the nation as a financial analyst. I was a guest on 26 shows in January alone. Each show has an audience of hundreds of thousands of people. And every host had the same question for me: What is going on with GameStop and what does that mean for the broader markets? The answer is an easy one: Mass Euphoria + Inexperienced Traders = Disaster. A couple of weeks have passed, and you may feel like what happened with GameStop is old news. Yah, a few million neckbearded basement dwellers—who still probably yell upstairs to ask their moms for snacks—lost their shirts in a bad trade. Why do you care? You care because this type of trading hysteria is an indicator of a market bubble. And when your Costco clerk, your Uber driver, and your grandkid's preschool teacher are all talking about GameStop and “getting into the market”... The market has reached its peak, and is about to pop. When hordes of inexperienced investors pile into the market they always pile in at the top. Everyone's excited. Stocks are going up. Money is being made. "Yay." ...at least that's what they think is happening. I sent out this chart earlier in another email, but you may have missed it. Here's what's actually happening right now... We're having a party on the deck of the Titanic… And things are about to get real. (As you can see, back in 1999 euphoria in the markets was at all-time highs. Shortly thereafter, the bubble popped and the markets ate it. Fast forward to today… market euphoria is even higher, shockingly so. The only way to go from here is down. Thankfully, there is a way to position yourself smartly that could help you avoid a dramatic drawdown in your own account. There is even a way to potentially profit. If you read this letter you’ll see how I plan to do this.) That's why I've dumped long-growth investments from the Street Freak portfolio, increased the cash allocation, and put the rest of our money into allocations that thrived during the last two downturns. Because, make no mistake, there are portions of the market that thrive when the rest of the market breaks down. My Street Freak readers are positioned in those sectors right now, and you can be too. I'm inviting you to join us. You can read my entire strategy here. It will take you 5 minutes to read, and could keep you from losing your shirt in the coming months. That's a good trade for 5 minutes of your time. Keep your shirt and read my letter now.
Jared Dillian
Editor, Mauldin Economics | 