Sadly, Larry Edelson, the former editor of this publication, has passed away; and I am in mourning for a dear friend and mentor.
(For Larry’s parting words to subscribers, published posthumously,
go to www.weissresearchissues.com/larrys-farewell)
Fortunately, thanks to Larry’s dedicated mentoring over the 15 years I worked with him — plus my own 30 years of experience in financial markets — I was completely ready to step in and hit the ground running as your new editor.
Right now, for example, I’m busy scouring the natural resource markets to find the best opportunities around the world. My team and I are tracking closely the critical cycles that impact our timing. And I have my pulse on all the markets that we’ve been tracking in Real Wealth Report (formerly the Silver and Gold Report) since 1979.
We are in an historic era for precious metals and natural resources. The bottom is in. And although setbacks are always possible, most commodities are now in the early stages of new, long-term bull markets the likes of which we haven’t seen in decades, just as Larry predicted.
The recommendations I will issue here in Real Wealth Report are based not only on my long experience in these markets, but also on my analysis of medium- and long-term technical and historical cycles, thanks to Larry’s patient mentoring.
As we have done every month for the past 38 years, each issue of Real Wealth Report will give you our very best analysis and forecasts with no punches pulled. As always, each issue will help protect you with tangible assets. And in keeping with our 38-year track record, you will continue to benefit from multiple opportunities to create enduring real wealth.
I have been amazed and deeply touched by the outpouring of sentiment and condolences on our special Larry Edelson Tribute page (www.weissresearchissues.com/larrys-tribute) and the Real Wealth editor’s mailbag. It’s very comforting to all of us who had the great honor of knowing and working with him.
If he were sitting here right now, Larry would say “there’s still much work to be done.” In fact, Larry was actively involved in his research until his very last days. Just over one-year ago, he accurately forecast that the global economy was just beginning a “five-year roller coaster ride through hell.”
It is now my mission to carry on Larry’s life’s work … to preserve and pass along his legacy for his loyal readers of Real Wealth Report, and future generations of investors everywhere. Above all, to help you profit from the volatile period just ahead, AND preserve those profits from the next crash.
So let’s dive right in and get to work … this month, I’m going to answer your most urgent questions — which have been pouring into my inbox — in a Q&A format.
Along with my answers, where appropriate, I will discuss the markets, current open positions, my real time forecasts, and more. Let’s get started.
Q: I am so very sorry to hear about Larry’s passing. He will be missed. Can you please tell me how that will affect the Real Wealth Report?
A: Larry was one-of-a-kind and will be sorely missed. He devoted his successful career to the study of cycles, and fortunately, he also had the great foresight to plan ahead and prepare for the cycle of his own life.
He handpicked and trained a team of analysts and traders to follow in his footsteps. Now our goal is to carry on his life’s work, so that Larry’s legacy will live on for future generations, especially for his own young children, Alex age 5, and his newborn daughter Megan.
I met Larry my very first day at Weiss back in 2002. He was already a larger-than-life personality back then, but Larry always took time out to mentor me about his cycles research and technical analysis.
Larry taught me a great deal about markets and investing over the next 15 years; about taking the long view to identify the big, macro trends. An avid student of history and the cyclical nature of markets, he taught me the value of evaluating markets from a historical perspective.
Recognizing the recurring, cyclical nature of financial markets is what made Larry an outstanding analyst. Markets are much more than numbers, Larry would say, markets are people… it’s all about the people.
Indeed, successful investing is about studying human behavior … fear and greed on display daily … and all the emotions that make up market sentiment.
Larry passed this wealth of knowledge and experience on to me and our team. It’s a priceless gift that we intend to pay forward to all of you.
So my short answer is: Nothing will change with the Real Wealth Report.
Each and every month, my team and I will continue to deliver our very best, actionable analysis and trade recommendations covering global markets. Our primary focus will remain, as always, real, tangible assets that have enduring value.
Specific buy and sell recommendations will include natural resources plus high-quality stocks and ETFs that will not only survive, but thrive in turbulent markets. Recommendations will still fall into one of five broad sectors to provide you with maximum diversification and profit potential:
Basic Survival Strategies: Covers gold, silver and other precious metals, as well as any other investments that you must own to grow and preserve your wealth.
Materials, Energy & Agriculture: In this section, we focus on leading natural resource and commodity investments including: Energy, industrial metals, food and more — the necessary raw materials that are most in demand.
Income Investments: In a world of ultra-low, and even sub-zero interest rates, these investments are designed to earn you higher income from stocks and funds paying rock-solid dividends and royalties.
The Speculator: For more aggressive investors looking for speculative but high profit potential trades, this section focuses on specialty investments designed to magnify your profit potential.
Asia: Together with precious metals, Asia accounts for the bulk of my own personal investments. Larry was absolutely convinced that we are in the midst of a great wealth transfer from the Western world to the Far East. So much so, that he moved to the center of it all, Thailand. Although Larry is gone, we continue to benefit from his contacts who live in the region and who provide us with boots-on-the-ground research into Asia’s fast-growing countries and companies, which we intend to feature every month.
Bottom line: Every issue of Real Wealth Report will focus on the most important events that are impacting the investment world, and even more important, my forecasts for key market trends, all based on the pioneering cycle research Larry entrusted to us.
Remember, the global economy is in store for a roller coaster ride for the next several years. The normal “rules” about how to invest will get turned upside down and inside out. Many could see their financial lives ruined. But I want us to be among the fortunate few who come out stronger and wealthier than ever.
Q: A few weeks ago, Larry was going to release his pick of the Junior Minors to buy. Is that still going to be released? And if so, when?
A: The Real Wealth Portfolio features several current gold mining stock recommendations. You can find all the details in the Basic Survival Strategies section. All of them are “buys” at current prices. A new recommendation, in the Income Investments section is Royal Gold (RGLD) which is within range of our buy target now.
Here’s my big picture view and forecast: Gold and silver slipped into a correction over the past month, which we correctly anticipated thanks to Larry’s proprietary AI forecast charts, but also due to three fundamental factors:
#1. The potential for more Fed interest rate hikes, which would …
#2. Trigger another round of strength for the U.S. dollar, and …
#3. A strong stock market rally since November 2016 that has stolen the show away from precious metals.
After a red-hot start this year, gold and silver mining stocks have tumbled 20% since the February peak, which certainly qualifies as a meaningful correction already. But I expect gold and silver could still decline a tad lower near-term, as you can see in the chart below …
This decline may not be much for gold, but it will be magnified in the form of a much larger correction for mining stocks. That’s because miners are highly levered to the price of gold and silver.
Typically, a 1% move in gold translates into a 2-3% move in gold stocks, which makes properly timing your buys and sells so important.
I will be taking my cues from the near-term direction of spot gold, as well as the miners, but If you’ve been waiting for that back-up-the-truck buying opportunity, your next chance is coming soon.
That’s why we’ve already started nibbling at select mining stocks. But for the time being, be patient and wait for this correction to run its course. I’ll be sure to let you know when it’s time to buy with both hands.
Q: I am a long-time subscriber and have been waiting patiently for your promised notification to back up the truck and buy stocks. Meanwhile. the market has had a historic rise since the election. Have I missed your signal to buy stocks?
A: Absolutely not! The stock market has been defying gravity — and our AI model forecast — over the last two months, no question. But no market can continue moving straight up or down in one direction. Markets rise and fall just like the ebb and flow of the tides.
While I’m bullish long-term on U.S. stocks, this market is overbought in the extreme and way overdue for a correction. And mark my words, the longer this post-election sugar high lasts, the more painful the eventual correction will be for stocks.
Here are three good reasons why you should remain cautious on stocks in the near-term, expecting a temporary and healthy pullback:
Bullish sentiment is way too high: The percentage of bulls in Investor Intelligence’s latest survey is 63.1% — the highest since 1987!
Volatility remains low — The S&P’s 65-day rolling volatility is at a record low — this typically happens right before a correction.
The Dow is trading 2,000 points above its 200-day moving average and the S&P 500 is 8% above its 200-day — a sure warning sign of an extended and overbought stock market.
Plus, our AI models still show a pullback coming. As you can see from the chart, the Dow should head lower and bottom in late March.
What’s the worst case? Hard to say right now, but first support is around Dow 20,000. If that gives way, and I suspect it will, look for a decline into the broader support zone at 18,500. In other words, look for a correction of between 5-and-10%. Once it reaches those levels, we will reevaluate, and re-run our AI models to help us determine if stocks will go even lower, or if the low is in. The lower it can get, the better. And I’ll be a buyer at those lower levels.
Longer term, I’m in complete agreement with Larry’s call for Dow 31,000. In fact, that’s looking more and more like a conservative target. We may be looking at Dow 40,000, possibly as soon as 2023.
Why? It’s simple. The most important economic and social/cultural SuperCycles are now converging for the first time in more than 80 years. And when you factor in the rising war cycles, the sovereign debt crisis, and the collapse of the EU, you can easily see why massive amounts of flight capital will flow into U.S. assets. Most of it is funneling straight into Wall Street — the most liquid market on the planet.
But now is NOT the time to back up the truck. I realize that’s hard, especially when CNBC is talking about record highs all the time. But this is the time to be patient and disciplined. When the time is right, you’ll be the first to know.
Rest assured, my team and I — aided by Larry’s Artificial Intelligence, neural net models — are on top of it.
Q: Please help…I am new to Real Wealth Report and I don’t know where to start. I have five different accounts, four personal one corporate. Do I treat each account separately for percentages to buy of each recommendation, or do I look at it as one large account?
A: If you’re new to this service and just getting started with our existing recommendations, here’s the best way to proceed.
First, decide how much of your total investable assets you will set aside for Real Wealth Report trades. It doesn’t matter if you have just one, or multiple brokerage accounts. Just start with your total assets, and earmark whatever percentage you’re comfortable with for my recommendations.
Second, once you have that amount set aside, there are five sectors — or sub-portfolios if you will — featured in Real Wealth Report. They are: Basic Survival Strategies … Income Investments … Material, Energy & Ags … Asia Investments … and The Speculator.
Each is allocated a theoretical $50,000 (or 20%), for an overall “model” portfolio value of $250,000 in total. You can scale this up or down as you see fit. For example, if you have $50,000 total earmarked for Real Wealth Report, consider allocating 20% to each of the five sectors, $10,000 apiece.
Basic Survival Strategies
Here’s my latest update on your existing positions …
The markets continue to rally, conveniently ignoring the potential policy risks. But as strong as the Dow looks and as high as the AI cycles have stocks going over the next few years, do not go all-in on stocks. I believe there will be a better opportunity to get long stocks, so wait for my signal.
Meanwhile …
You should have been filled last month on our recommendation to buy Textron Inc., symbol TXT. Now, go ahead and place a good-till-canceled protective sell-stop at $42.68 on all of your shares.
If not on board, using 3% of your capital allocated to Basic Survival Strategies, buy Textron Inc., symbol TXT, at the market. Place a good-till-canceled sell-stop at $42.68.
Meanwhile, let me update you on your remaining positions …
FIRST, continue to hold your physical gold as recommended. As a reminder: You should have bought on our previous recommendation at $1,207 and more recently at $1,250, 10% each time, your average being roughly $1,228.50.
Gold has retraced some of its 2017 gains, topping out at $1,264.90 late last month. The uptrend from the December low is still intact, and it’s holding nicely around the $1,200 level. Gold needs to hold support above $1,182 to continue to the upside. The next near-term upside target is $1,265, then of course the $1,300 level. After that, I will be looking at the $1,380 level, then a break above $1,470. In fact, I will recommend adding to your physical holdings as soon as these buy signals are elected. Stay tuned.
Remember, these are long-term core emergency holdings. And if you followed our recommendations on these buys for 20% of 20% of the Basic Survival Strategies section, your total allocation should be no more than 4% of your entire liquid net worth (20% X 20%).
If anything changes, or I decide you should hedge your current holdings, rest assured I will notify you immediately in Real Wealth, or via a Flash Alert if necessary.
Continue to hold your …
n Core Gold Bullion (GOLDS), up 215% since originally recommended.
n SPDR Gold Shares (GLD), up 173.6% since our initial recommendation.
n Tocqueville Gold Fund (TGLDX), up 51.4%.
SECOND, hold your Platinum Bullion (XPT) and Palladium Bullion (XPD), which should be very minor in holdings.
THIRD, for spot silver: You should have 5% of your Basic Survival Strategies funds invested in Silver Bullion (XAG) when it hit $16.30 on November 23. You’re up 3.9% on this buy. Hold. I will let you know when to add-to, or hedge the position if need be.
FOURTH, continue to hold Yamana Gold Inc. (AUY), Goldcorp Inc. (GG) and Kinross Gold Corp. (KGC) — with good-till-canceled protective sell-stops at $2.34 … $11.49 … and $2.25, respectively.
I’ll be looking to add to these positions soon, once my key buy signals are elected, as stated above.
Plus, I’m constantly scanning my watch list of high-quality miners with low production costs for new potential buy recommendations. Stay tuned, because I expect to add substantially to your mining stock holdings this year.
FIFTH, keep holding your shares in Vantiv, Inc. (VNTV) with a good-till-canceled sell-stop at $49.74.
If not on board, for whatever reason, using 3% of your capital allocated to Basic Survival Strategies, buy Vantiv, Inc., symbol VNTV, at the market. Place a good-till-canceled sell-stop at $49.74.
