Dear subscribers, dear readers, dear kindred spirits:
To my great chagrin, and with a very heavy heart, I will be suspending site publications for the foreseeable future by month’s end. At the same time, the current site content will remain online, also for the foreseeable future. Said is particularly apt given my “restart publications when possible” intention.
The reason is simple and straightforward: I keep spending a lot of time on site content without any compensation while I keep incurring considerable costs (the hibernation will cut costs by 50% – 60%).
I can no longer afford to do this. Commensurately, this will be my last post pending the manifestation of the inevitable global asset valuation reset that I have often referenced, and have tried to shed light on, via various publications (posts, reports, and YouTube videos — IF I record any new ones, they will appear on the site thanks to existing links) that extend back over three years.
That reset, which I predict will go down in financial history books as the “mother of all resets,” should bestow upon me the resources with which to restart publications — including un-audited, theoretical performance calculations with the same theoretical portfolio — without “financial considerations.” Frankly, and consistent with my publications, I believe such a reset will happen sooner rather than later. In fact, it is way overdue and could commence at any time. Overnight. Literally. They won’t “ring a bell.”
Caveat: I would be less than honest if I didn’t also state the obvious, namely that I have thought this for years. Specifically, given our entrenched and increasingly destructive political, financial, and economic situations — both domestically (in America) and globally — our increasingly long-in-the-tooth asset (OECD nation) valuation disconnects/asset bubbles should have ended/popped years ago. When I say bubbles, I’m referring to bonds, stocks, and real estate. When I say “reset,” I’m referring to much lower future valuations (NPVs) of bonds, stocks, and real estate triggered by much higher interest/discount rates on the one hand, and what will likely prove to be markedly lower sustainable earnings power on the other hand. Talk about a one-two punch.
Reversion beyond the mean (not to the mean), or asset valuation history, will come into sharp relief, once again. This time, however, unprecedented levels of debt, unheralded pension underfunding, tougher demographics (aging), failing productivity (which is why we have out-sized debt growth in the first place), increasingly more difficult to access and progressively less affordable “24/7” energy, consistently more eviscerated property right protections, domestic litigation insanity (2.6x Europe’s), and a stark and ongoing decline in the rule of law are largely global realities that suggest an “unimaginable to many” valuation swing, from boom to bust, is in the cards.
This is both a huge risk for those that hold pricey assets bought at pricey valuation levels, and a historic, reset-based, strategic return opportunity that can be capitalized on in terms of portfolio allocations/re-allocations. That is, if requisite re-allocations are accomplished prior to an overdue “reversion beyond the mean” bust as regards overvalued assets, which will provide the “intact funds” to purchase “bust valuation” assets as they become available. Should you have an interest in more granularity beyond the links that I provide here, please see publications on this very topic and on related topics on the site. The content selections offer considerable depth and quite some breadth.
Moreover, please consider the pivotal role timeless and true save haven assets (not massively overvalued government bonds issued by bankrupt OECD governments!), namely physical precious metals in your possession purchased at attractive prices (AS IN RIGHT NOW, on October 25th, 2018!), are likely to play as Frankenstein Finance (financial repression) inevitably begins to fall apart at the ugly, sutured seams.
As you do so, dwell on the fact that fiat money, especially the incredibly vulnerable, overvalued US dollar*, will be under mounting currency debasement pressure as central banks (CB), due to political realities and CB ownership interests, double-down on balance sheet expansion, thereby “saving” debtors as they continue to “screw” savers by revisiting ZIRP and even NIRP. Trouble is, with global debt at peerless levels (nearly $250trn at last count) in both absolute and in percent of GDP terms, a creditor revolt is all but a given. Translation: puny central banks/central planners, you will lose control, which interest rates at the long end will reflect, and with a vengeance. Yes, Virginia, history will repeat.
Life can be a funny thing. I’ve been “bootstrapping” it (and I have also had an extremely supportive family) trying to bang the valuation pots and pans. Should I still have a stout, healthy pulse, which I fully expect will be the case, that reset that I keep referring to (I know, a bad word, but at least it’s just “one word”) will enable me to “chime back in” at a time when my food for thought will have much less urgency and much lower potential return prospects than are on offer today. Like I said, life …
In closing, I thought it only proper to let you know. In addition, I also want to take this opportunity to thank my family in the strongest possible terms; without their help, I could have never given this a big push. Plus, I’d like to thank one dear, nearly life-long friend, Doug, for his endless invaluable input, wisdom, sage advice, help, and solidarity. Moreover, I’d like to thank my great webmaster; those that became subscribers; those that read/listened to my publications; those that thought highly enough of the overall site content to spread the word; and, most of all as regards the site, those “intellectual brothers” populating the ethical, constitutional corridors of my beloved alt media universe that a) I have been privileged enough to get to know and b) have seen fit to give my pieces invaluable lifts by providing DK Analytics post links on their precious digital real estate, i.e., on their sites.
Dan Kurz, CFA
* – How much would you pay for a heavily indebted, perpetually more indebted, perennially hugely negative free cash flow stock? Well, America’s the corporation, and the dollar is its stock.
This commentary is not intended as investment advice or as an investment recommendation. Past performance is not a guarantee of future results. Price and yield are subject to daily change and as of the specified date. Information provided is solely the opinion of the author at the time of writing. Nothing in the commentary should be construed as a solicitation to buy or sell securities. Information provided has been prepared from sources deemed to be reliable but is not a complete summary or statement of all available data necessary for making an investment decision. Liquid securities can fall in value.