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Business/Finance See other Business/Finance Articles Title: Using Credit Cycles to Put the Odds on Your Side Using Credit Cycles to Put the Odds on Your Side Mike Larson | Monday, May 9, 2016 at 4:30 pm Not long after you read this, I’ll be hopping on a plane for the MoneyShow Las Vegas. I’m looking forward to delivering a pair of presentations on the markets there, as well as to participating in an interactive lunch panel. Hopefully, I’ll even get to meet a few of you in person! These days, Las Vegas resorts feature a little bit of everything — dazzling, high-production-value shows …big-name entertainers … five-star restaurants backed by celebrity chefs, you name it. But let’s be honest. Vegas is still a town that gaming built. So if you want to have the best chance of making it home with a few bucks in your pocket, you have to play the odds. Don’t throw all your cash down on games where the house advantage is huge. Instead, focus on those like blackjack where the odds are much better for you. There are plenty of differences between gaming and investing, of course. But that principle of “playing the odds” is important for both. Investing isn’t exactly gambling, but you do want to play the odds. For instance, I’ve been talking a lot about the credit and economic cycles. I’ve argued that we’re past the peak expansionary period for both. I’ve also highlighted how a wide variety of asset prices got wildly inflated, but are now starting to deflate. And I’ve pointed out that we just experienced the second-longest bull market run in U.S. stock market history. Now, does any of that guarantee the stock market is going to fall apart? No. But does it tilt the odds in your favor, assuming you’re looking to profit from downside moves via inverse ETFs, put options, short sales, or other similar strategies and investments? You bet! “I’m continuing to advocate a cautious stance for your core investment money.” So I’m continuing to advocate a cautious stance for your core investment money … and continuing to look for overvalued, vulnerable turkeys that deserve to get plucked. I’m finding more and more of the latter these days, given where we are in the cycle, and I’ll have more details for you here and in my investment services. Until then, see you in the desert! Or if you can’t join me, please do share your thoughts about this market environment in the discussion section. I’ll do my best to respond to as many comments as I can. Post Comment Private Reply Ignore Thread
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