Hot Features
Premium
Level up your trading with our powerful tools and real-time insights all in one place.
Talking to Kitco News, investment veteran Clem Chambers says numerous indicators are pointing to an upcoming significant crash affecting all asset classes. This has caused him to sell his positions and move into cash.
- Crash of 25% or more is highly likely before Christmas
- All the American charts say “trouble ahead”
- ‘Market malfunction’ causing abnormal portfolio activity is usually a crash precursor
- In medium-to-long-term market will see 100% inflation
- Crashes can be like avalanches, takes a minor action to set off a cascade
- Stock market ‘miracle’ too good to last
- Crypto is a signal for trouble in China
“I got a warning from the market about ten days ago…so I cleared the decks because I think it’s highly likely, not absolutely certain, but too likely to be in the markets that we’re going to be in for a crash. Normally before a crash, I experience what I call a market malfunction where my portfolio just doesn’t behave as it should.”
Chambers talked of the ‘mind-boggling’ valuations of companies (due to the Fed pumping liquidity into the financial markets) and the resulting fragility of the situation in the lead up to the US election, “where pretty much anything could happen and none of it particularly good.” He believes that if the US market crashes it’s going to “smash” everything else with gold being hit, crypto getting hit and all other assets getting hit, which will result in cash being the only safe haven in the short term.
Writing in Seeking Alpha on September 15th, Chambers had suggested an allocation of 33% cash, 33% stocks and 33% gold/crypto for a deflation/inflation scenario where a major sell-off seemed unlikely. However, with a market crash on the cards, Chambers has revised his allocation and is out of the market completely – bar just three special situation positions (out of 30-40) – and in cash.
Chambers described how a market crash is a short-term blip and he’d be trying to buy the bottom of the crash and revert to ‘normality’ once the market does. Cash isn’t a long-term option as he believes over the next three years the market will see 100% inflation thereby devaluing money.
