We went to a party on Saturday afternoon, my wife and I.
It was a chance to say farewell to Dr. Joe and Nancy. Joe bought the old Burkett place about a half-mile down the gravel road. He is a new Army Doctor in his 50s, a captain.
He is an interesting character in that he had several careers — shop teacher, karate instructor, and Brazilian truck driver — before joining the Army and going to medical school.
He’s now in his mid-50s and tells stories about trying to keep up with Special Forces — or speed guys, as he calls them — while wearing body armor and a 70-pound pack.
Anyway, the weather was pleasant in Maryland after a heat wave as we sat on the porch drinking homemade wine and watching the deer eat through the woods.
Land had been sold recently, and three giant houses were built as they are these days, invaders in our bucolic setting.
So we had a chance to meet the three new neighbors with their infant babies. It is interesting to note that all three had switched jobs recently for better prospects after long tenures with their past employment. The economy, they said, was looking up.
One of the new people was native Chinese. His previous abode was an apartment near the Wal-Mart in Columbia. The house he built is massive and not much shy of $2 million, fuelling speculation that the Chinese 401(k), where an extended family will pool their money and invest in foreign real estate, is working.
So, anecdotally speaking, the evidence in rural Maryland is that the economy is about to hit another gear.
Shoeshine Tip
There is a famous market story about Joe Kennedy, a rich guy and father of the president. He exited the stock market after a shoeshine boy gave him some stock tips. Kennedy figured that when the shoeshine boys have tips, the market is too popular for its own good — a theory also advanced by Bernard Baruch, another vested interest who described the scene before the big crash of 1929:
Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day’s financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely. Her paper profits were quickly blown away in the gale of 1929.
I remember getting a tip to buy Planet Hollywood, a burger joint, from a taxi driver leading up to the 2000 bust. It was one of the signs I used to take profits.
We aren’t there yet. The heroin addict who haunts the sidewalk in front of work isn’t pushing Shake Shack (NYSE: SHAK). But for the first time in more than two decades, CNBC was on at the Pratt Street Ale House during lunch…
Two More Years of Bull
Again, these aren’t hard facts, but it would suggest that we are in the last third of a bull market, which is when the fun really starts. It’s when valuations get tossed out and the “this time its different” mantra takes hold.
As you can see by this long-term chart of the Nasdaq, it was the last six months of 1999 when the stock market added 2,000 points, or 66%.
That kind of move would put the Nasdaq at 10,624!
No one can predict the future, but the chart looks a lot like 1999. It would not surprise me if the market launched into the fall.
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Oil
When the economy grows, commodities start to move higher as well. We’ve seen price increases in steel, copper, cobalt, lithium, palladium, rhodium, uranium, and oil.
West Texas crude traded above $50 a barrel for the first time since May, while copper rose to a two-year high and iron ore surged.
It’s time to start laying bets on a return of the commodity supercycle. You can find my written dispatch regarding the unique opportunities in Mexico fracking fields here. This is a one-time event, so don’t miss out.
The Mexican government just put out the schedule of the next bid rounds:
To watch the video of how this $0.26 fracking expert has Mexico in the bag, click here.
Regardless, it is time to get ready for the end game, where the profits come fast and furious for those who know how to bet large and have a strict exit plan.
All the best,
Christian DeHaemer
Check us out on YouTube!Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
