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The crash is coming

The crash is coming

Fred Hickey, editor of the influential investment newsletter «The High-Tech Strategist», compares today’s state of the stock market with the peak of the dotcom bubble in the year 2000 and spots bright opportunities in the gold sector.

Few investors have a deeper understanding of the tech sector than Fred Hickey. All the more concerning is his warning when it comes to the outlook for US equities. The renowned editor of the popular investment newsletter «The High-Tech Strategist» draws alarming parallels to the bursting of the dotcom bubble in the year 2000 and spots high risks in stock market darlings like Amazon (AMZN 1864.42 -1.34%) and Apple (AAPL 223.77 -0.23%). For the industry veteran, one important reason to be concerned are rich valuations. He also sees troubles ahead with respect to the rise in interest rates and the growing mountain of debt around the world. Against this background, the outspoken contrarian sees bright opportunities in gold and in attractively priced mining stocks.

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Fred Hickey: Why A Lifelong Technology Expert Favors Owning Gold

Fred Hickey: Why A Lifelong Technology Expert Favors Owning Gold

It’s the safest & most undervalued asset today

Fred Hickey, frequent cited expert on Bloomberg News and Barron’s Roundtable, has been publishing his author extremely well-respected investment newsletter, The High-Tech Strategist, for 31 years. And he is more worried about the state of the financial markets today than he’s ever been.

While his primary focus has been on analyzing Tech stocks, over the years he has expanded into macro trend analysis as the central banks starting increasingly intervening in world markets and distorting the price of money.

He now finds asset prices dangerously overvalued (within Tech and without) and worries — as we do — about the risk of a major market correction and possible currency crises.

Ironically, this lifelong expert in “all things technology” has concluded that gold (the “barbaric relic”) is the sanest asset to put one’s capital in these days — both due to its safety factor and it’s current level of undervaluation. He expects the precious metals to fare well during the downward market volatility he foresees, and he is now tracking the mining stocks closely as he predicts they will experience dramatic appreciation from here.

What’s happening to gold mining stocks right now is an amazing story. They’re extremely undervalued. Just this year, we’ve seen the price of gold hold up during this market decline, yet the miners have been getting slaughtered.

One of the things we look at is the HUI-to-gold ratio, or the gold miner index to gold. That is down to 0.133. Now, that’s lower than it was at the 20-year bear market bottom in 2000. It was slightly lower than that at the end of 2015, but we’re talking about near record lows here when the price of gold is up. It looks to me that gold is in a bull market.

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Olduvai IV: Courage
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Olduvai II: Exodus
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