Maria’s Note: Maria Bonaventura here, Nomi’s senior managing editor. Today, we’re bringing you another insight from veteran market timer Mason Sexton.
In the 1980s, Mason became a star on Wall Street…
Mason got worldwide attention for his uncanny prediction of the 1987 stock market crash. When I say “uncanny,” I mean it. As the Chicago Tribune wrote, he called that crash “practically down to the minute.”
And Timer Digest named him “Top 10 Timer” in 1987, 1988, 1989, 1990, 1992, 1993, and 1994.
If you don’t know the name… there’s a reason for that. For the last 30 years, Mason’s reserved his forecasts for his wealthy clients – including a Forbes top 40 billionaire. They pay up to $10,000 a month to get his insights.
Now, there’s too much at stake for him to keep quiet. On May 23, at 10 a.m. ET, he’ll go public for the first time in 30 years… and release details of an ominous forecast he sees ahead for America.
Click here to register for Mason’s event, and then read on below for more…
I remember it to this day…
In my Long-Term Forecast 1985-1992, published in early 1985, I predicted that “in 1987, the stock market will enjoy its biggest rally in history.”
The Dow Jones opened the year at 1,908 points. At the peak, two months before the crash, it was at 2,722 points.
People often forget the tremendous stock market rally of 1987. They only remember the crash.
As it happens, I predicted that, too.
In an interview I had on August 14, 1987, with CNN, I said (emphasis added):
What we think will happen is that we’ll get an important top somewhere around August 24 or 25.
[…]
If I had to guess the final top, it would be the first or second week of October. When I say “the final top,” that would precede a correction of 15-20% minimum in the [Dow].
On August 20 of that year, I repeated my warning. When I was interviewed by the New York Post, I said:
We are seeing a top in the stock market in a generational sense.
As it happens, the Dow Jones topped out at 2,722 precisely on August 25 of that year. It was the all-time high for 1987. And it was a level that the Dow would not see again until two years later in August of 1989.
I’m sure many of us remember what happened next…
On Monday, October 19, the Dow Jones collapsed by 508 points, or 22.6%. It was, and remains, the worst one-day drop for the index in percentage terms. Black Monday had arrived.
Of course, it’s one thing to make a prediction. It’s something else to follow through and tell people exactly what to do.
That’s what I did.
On October 2, 1987, I advised clients of my Harmonic Research newsletter “to sell all stocks.”
Six days later on FNN (the precursor to CNBC), I advised investors, “Buy puts on the S&P index… Short IBM, GM, PA, XON, and CHV.”
I don’t retell this story to bring up bad memories for those of us who were around for the crash.
But it’s important we understand what’s at stake…
Investors who were prepared for the crash could have made a fortune. In fact, I later had a client brag about how her traders had turned $100,000 into $13 million over the course of a few weeks by following my research.
But for those that were blindsided by the crash, it was devastating…
While the Dow officially reclaimed its 1987 high two years later in 1989, the reality is that many investors waited much longer to be made whole.
Adjusted for inflation, the Dow would not reclaim its 1987 high until 1992. That means it took five years just to get back to even. For those of us in retirement or nearing retirement, that’s an eternity.
Those are the stakes.
I believe a cataclysmic event could be headed for the markets and the economy. And it could start in the next eight weeks.
Those of us that do nothing will find ourselves living through a repeat of 1987, and that’s the best-case scenario.
Worst case, we’re looking at a wealth-destruction event unlike anything we’ve seen in our lifetimes.
What follows will sound shocking, unbelievable perhaps. Some might say it’s “alarmist.” But I am alarmed.
For that reason, I’ve come forward to share my warning. And I urge you to read on to prepare for this event.
But first… Allow me to introduce myself.
Four Decades of Market Forecasting
My name is Mason Sexton. For the better part of four decades, I have made a career for myself forecasting the precise movements of the markets.
I began my career on Wall Street after graduating from Harvard Business School in 1972. I spent three years in the Corporate Finance Department of Morgan Stanley.
I did a stint with Salomon Brothers in M&A. Then I headed the Sales and Research Department of Mabon, Nugent & Company.
In March of 1984, I founded Harmonic Research, a bimonthly newsletter that specialized in making uncanny, specific predictions for the market. The story above was based on my research with Harmonic.
I’m happy to say I have a devoted group of institutional clients that pay tens of thousands of dollars per year to review my research.
Out of respect for my clients, I won’t name names. But I can say several run successful hedge funds. Others have a net worth in the billions of dollars.
I’ve mostly stayed behind the scenes these past few years. And were it not for the alarming nature of my next prediction, I likely would have stayed out of the public eye.
But as I said earlier, something is coming.
For those who are prepared, it could be a generational opportunity. But sadly, I fear many investors will be completely blindsided.
Let me explain…
An Extinction-Level Event
Given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited.
That’s what Ben Bernanke – then chairman of the Federal Reserve – had to say to Congress in May of 2007.
At the time, the housing market had been experiencing considerable strain. In January of that year, mortgage lenders Ownit Mortgage Solutions and American Freedom Mortgage had both filed for Chapter 11 bankruptcy.
But – Bernanke assured us – the brewing crisis was contained.
I don’t have to remind you of what happened next. But it’s curious that – in the wake of today’s financial turmoil – we have Jerome Powell, chairman of the Federal Reserve, making statements like this:
Conditions in [the banking sector] have broadly improved since early March, and the U.S banking system is sound and resilient. We will continue to monitor conditions in this sector.
Powell must have been behind on the news. Precisely two days prior, regional bank First Republic had collapsed. It would eventually be sold to JPMorgan Chase.
And as I write, regional bank Pacific Western appears to be teetering.
Ask yourself, dear reader: Does it feel like the banking system is sound and resilient? Does any of this feel OK?
Human beings have a remarkable intuition for danger. And if we were being very honest with ourselves, we would admit that something is amiss. Something is not right.
As I said earlier, something is coming…
What precisely is coming? And what will it mean for our investments and retirement?
For that answer, I would ask you to join me on May 23 at 10 a.m. ET. On that day, I will be holding a special briefing that I hope you can attend.
During the event, I will share my next prediction. (It’s something far worse than a simple bank failure.) I’ll also detail precisely when I believe it will start and what investors can do to prepare.
If you are at all curious, then I would ask you to mark that date: May 23 at 10 a.m. ET. I hope to see you there.
Regards,
Mason Sexton
Editor, New Paradigm Research