Phil here… This holiday season, my readers and their feedback is my greatest gift.
So today, I’d like to take some time to respond.
As always, if you have a question, feel free to drop me a line at [email protected]. Just know I can’t give personalized investment advice.
First up, reader Alan K. wonders how the market algorithms might affect the timing of the cycle…
Hi Phil, thanks for all you do! I am curious to know what you think of all the stock market algorithms out there constantly buying and selling – will their effect mask what is really going on with the 18-year cycle? I could envision a lot of “head fakes” due to their combined effects in the markets. Do they affect how you think about the cycle at all? Thanks again!
– Alan K.
Hey Alan, thanks for writing in. Good question about all the market algorithms and out there constantly buying and selling.
I don’t that will affect the 18-year cycle at all in the sense of timing, but it does make things a lot more volatile. We’ve still able to give a reasonable forecast for what we thought the bottom of the market would be in March.
Another low up to seven months later after that sometime October, that went a little lower than I thought, and then an up move starting from here, going through right through 2024, 2025, 2026.
So from a timing point of view, I don’t think it’s having any effect at all. It is, however, making things a lot faster, which means there’s a lot more to react to.
However, I think if you can look a bit more long-term and the way I do apply timing and key areas to look at and stocks that are going sideways at reasonable highs, still gives us a lot to look at.
And I haven’t had reason yet to change the way I do. So in short, no, I don’t think it will affect the timing much. Thanks again for writing in.
Next, Lisa D. a subscriber to my newsletter The Signal, asks about what I look for in picking stocks…
Dear Phillip Anderson, thank you for sharing your investment strategies with us, I absolutely love your subscription. I am from Australia as well.
In one of your videos you suggested that we look for stocks that are in their all-time highs. I am curious to know if I am on the right track, and whether these are the right stocks for the coming part of the cycle.
– Lisa D.
Hi Lisa, thanks for writing in. Good to know you’re from Australia! Is anything much happening there yet? I’m never sure it does much…
I’m not permitted to give individual stock recommendations in that sort of fashion. But yes, all-time highs. And the best thing you can do, is have a look at what Mr. W.D. Gann had to say in his book, Truth of the Stock Tape. On page 67, he shows the shape of the chart that made him so much money, the Mexican Pete pattern.
I’ll post it up onto The Signal site, under subscriber resources. It’s good reading. You’ll see the shape of the chart that you want there. Thanks again Lisa for writing in.
Next, Astrid C. asks some tough questions about the U.S. dollar, and crypto…
Hi Phil, I read your book. It was the best economic book I ever read. It actually made intuitive sense. Thank you for that. Questions for you: What are your thoughts on de-dollarization and cryptocurrency. Is de-dollarization really going to have a very positive impact on crypto? People kept saying the de-dollarization trend will make everyone go into crypto.
Also, do you think the U.S. government is going to get rid of all cash? Will U.S. dollar cash holders end up being bag holders?
– Astrid C.
Hi Astrid, thanks for writing in. You asked some difficult questions. Thanks for the feedback on the book. I appreciate that. I had a great time writing it, even if it did take up a lot of my life, but I’m happy it got out eventually.
De-dollarization and cryptocurrency, they’re tough questions. We will have to see how the next couple of years unfold on that. I think if there’s one country where people would really rise up about the loss of their cash, it would be the United States.
People love their dollar bills there and I think they will just about forever. So converting it to a digital currency, I think it could only happen when there’s a crisis and it could be on the agenda in 2030 or so, and the way the government would introduce it to people would be to say that one way out of the crisis by then would be to give people cash to spend.
But the only way they’ll do that is to give you cash as digital dollars.
So for people to get that cash that the government might give away to stimulate the economy would be digitally, and that’s the way they’ll eventually get people onto a digital currency, sort of like a forced carrot and stick approach.
That idea without the digital currency was sort of approached in the 1930s, but it never got anywhere. They decided to play with the gold price instead.
I’m not a crypto specialist. Crypto is pure rent, so it could actually do anything.
And if there is a scare on the dollar, who knows? But if it got right out of hand, I think the government would just step in and ban crypto like they did in 1933 when they made holding gold illegal.
So I think difficult things are coming once the land price cycle beefs up from here and then does turn down after 2026.
But to answer some of those questions, we’re going to probably have to see what happens in the next year or two. But rest assured, Astrid, I’m on the case and you’ll be the first to know what I think.
That’s all for today. Feel free to email me at [email protected]. I love getting questions from subscribers.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
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