…One of his greatest investing mantras of Warren Buffett is to be greedy when others are fearful and fearful when others are greedy. Never has more sound advice been given.
This article is an edited ([ ]) and revised (…) synopsis by bmgbullion.com of an article by John Whitefoot to ensure a faster & easier read. It may be re-posted as long as it includes a hyperlink back to this revised version to avoid copyright infringement.
With 2017 half over, and despite gridlock in Washington, drama in the White House, and barely-there economic growth, the S&P 500 remains bullish. It has advanced 9.8% and is in record territory. It is up more than 14% since Trump won the election in November 2016.
Wall Street remains optimistic despite what`s going on within the US. Meanwhile, tensions in the UK, North Korea, the Middle East and terrorist attacks will all have an effect on the U.S. economy and the stock market.
Whitefoot discusses in his unedited and unabridged original article:
- how the Warren Buffett Indicator shows that stocks are significantly overvalued;
- how other indicators show that stocks are significantly overvalued;
- how Buffett is sitting on a record pile of cash; and
- how Buffett`s actions point to a stock market crash.
As it stands, everything is in place for a serious stock market correction; the question is when. With markets in record territory and momentum strong, the next crash may not be around the corner but, with valuations getting further and further out of whack, stocks will have further to fall when a crash comes.
…While a stock market crash induced by bad US economic indicators is not all that likely in the coming months, there are black swan events that could send stocks into a tailspin. This is where the Oracle of Omaha shines, when investors are fearful and running for the exits.
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