This Market Sell-Off Is Like an In-Game Reset

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. Maria’s Note: Maria Bonaventura here, Rogue Economics’ senior managing editor. Today’s Inside Wall Street comes from colleague Teeka Tiwari. Teeka is no stranger to crushing price swings. Like Nomi, Teeka operated at the highest levels of Wall Street for over a decade. Earlier in his career, he saw the same kind of carnage we’re seeing today in the markets… also as a result of the Fed’s actions. In the three decades or so since he left Wall Street, Teeka has dedicated his life to helping Main Street folks profit. And last night, he held a special online event. He shared the details of a rare opportunity to recapture gains you’ve lost in the markets this year… and potentially position yourself to make much more. To watch the replay of Teeka’s event… and find out how you could make 21 years’ worth of gains within 12 weeks… [just click here](. Then read on below for today’s guest essay. Teeka shares the key investing lessons he learned early in his career… --------------------------------------------------------------- This Market Sell-Off Is Like an In-Game Reset By Teeka Tiwari, Editor, Palm Beach Daily [Teeka Tiwari] What I saw made me sick to my stomach… The market was coming off a huge rally. Stocks and bonds were up 17% and 34%, respectively, for the year. The year before, we had fabulous economic growth. The overall sentiment couldn’t have been better. And then… all hell broke loose. Russia invaded its neighbor. Inflation was heading higher. The Fed hiked rates to rein in rising prices. Then one day… just like that – bam! My computer screen started bleeding red. All my positions were down… big. It was a nightmare. I received ear-splitting calls from angry clients. My office was in a tizzy. Investors panicked. Stocks plummeted. Overall, the S&P 500 fell 9% in two months… Sounds familiar, right? But everything I just told you is exactly what I experienced back in 1994. Recommended Link [Florida man leaves crypto crowd speechless…]( True story. Florida man walks into a packed crypto conference… Pulls out his phone… And then this amazing thing happens… [image]( [Click here to watch!]( -- At the time, I was 24. I’d been working on Wall Street for six years, but nothing prepared me for that carnage. In 1993, the U.S. economy was humming along… GDP was growing at an inflation-adjusted 2.8%… And the market was hitting all-time highs. Then the Federal Reserve rained on the parade… Worried about the economy and a modest uptick in inflation… the Fed turned hawkish. Starting in February 1994, the central bank nearly doubled its policy rate to 6% in seven rapid-fire hikes over 12 months. The rate hikes spooked investors, and the markets tanked. After hitting an all-time high of 482 on February 2, 1994, the S&P 500 dropped 9%… a hair’s breadth away from “official” correction territory… [Chart] Later that year, Russia invaded the Republic of Chechnya, creating more volatility into 1995. [Featured: Goldman Sachs Alum Sounds Alarm on “Next US Crisis”]( At the time, it felt like the world as I knew it was ending. But I – and everyone else at the time – was dead wrong. The world wasn’t ending. Instead, it was the absolute best time to buy stocks. After its 9% fall, the S&P 500 climbed 248% by the year 2000… [Chart] Here’s why I’m telling you this… The market activity between 1994 and 1995 parallels what we’re witnessing today. To me, that suggests another bull run is right around the corner… Recommended Link [Americans Forced to Become ‘New Rich’ Or ‘New Poor’]( [image]( PhD & former Goldman Sachs managing director reveals: [“The biggest heist against the American people, in history.”]( A strange force quietly creeping under the roots of the U.S. financial system that soon may transfer $40 trillion out from under America’s middle class… Funneled to the financial elite. One of the nation’s leading economists traveled to Delray Beach, Florida to uncover exactly what’s happening. She says: “This is NOT a historic crash… it’s NOT inflation… it’s FAR worse… A reshaping of our global financial system has ignited a $40 trillion transfer of wealth from the middle class to the rich… that could forever split the entire nation into two groups… [‘the new rich’]( or [‘the new poor’]( – you will have to make a choice.” [Click Here To Watch.]( -- History Is Repeating Itself In retrospect, I now know what happened from 1994 to 1995 was merely a short-term positive to negative shift in sentiment. In other words, it was merely the start of a “cyclical” bear market, not a “secular” one. “Secular” markets are long-term, one-way directional moves up or down. They typically last between 12 and 20 years. Within each secular market, there are short-term moves opposite to the main trend. These are the “cyclical” markets, which tend to last nine to 18 months. The chart below shows a history of secular and cyclical markets measured in the Dow Jones over the past century. [Chart] As you can see, individual secular markets have lasted for as long as a quarter-century. The big-picture moves can be higher (the green sections) or sideways/lower (the red sections). But short-term, cyclical moves happen throughout. [Featured: Caught on Camera - Florida man leaves crypto crowd speechless…]( During the 1982-2000 secular bull market, we experienced seven cyclical bear markets. Each involved geopolitical uncertainty and/or financial crises. The average peak-to-valley drop during those cyclical bear markets was 17%. However, the average recovery to new highs was just 94 days. The period between 1994 and 1995 is the one most like today… And as far back as October 2014, I said we were in the middle of the next secular bull market… one that would last until 2028. [Chart] Now, this bull run hasn’t been a straight shot up. We’ve seen corrections and crashes along the way, including the most recent pullback… The latest cyclical sell-off started in January 2022… After reaching an all-time high of 4,796, the S&P 500 is down 17%. But at the same time, the S&P 500 is up 77% since March 2020. So if you just bought an index that tracks the market back then, you’d have double-digit gains. To me, it’s eerily like what we saw in 1994. Just like then, years of strong growth have caused higher inflation… the Fed is raising rates to cool the economy… And the markets have tanked. It’s the perfect recipe for a short-term bear market within a long-term bull market. It’s painful and scary… but it’s also an absolute gift. Here’s why… Recommended Link [How to trade in today’s volatile market]( [image]( For nearly 4 decades, I’ve showed people from all walks of life how to retire wealthy. These are everyday folks… People with almost no financial experience. But I haven’t done it the usual way… My method is different… And it works in any market condition. The more bearish, the better. Right now, we’re offering it for just $19. That’s the lowest price my publisher has EVER offered for a trading research service. [Watch this 32-second “live demo” to see how it works. I even give you the name and the ticker.]( -- This Sell-Off Is Like an In-Game “Reset” You should do only one thing in the middle of a cyclical bear market… Buy great names and hold them. That’s it. In my opinion, the 1994-95 downturn was the single-best buying opportunity of the entire decade… If you dared to buy blue-chip stocks back then, you would’ve made a killing over the following five years. The risk/reward ratio was fantastic. Remember, the market fell 9% overall in 1994. The sell-off hit world-class companies hard. Pepsi, General Electric, and IBM fell 27%, 16%, and 14%, respectively. There was no fundamental reason for the sell-off. They were high-quality companies with high-quality earnings. They made billions in revenue. If you recognized these were world-class assets… you could’ve made a fortune buying them when everyone else thought they were toxic. As you can see below, Pepsi, General Electric, and IBM saw gains of 217%, 345%, and 564%, respectively, in less than five years. [Chart] These cyclical bear markets are like an “in-game reset”… If you missed the beginning of this bull market, these in-game resets give you a rare chance to start over and capture all the upside as the secular bull market resumes. You just must tune out the negative news and focus on acquiring great names at bargain prices. That’s it. My research suggests we will be in a secular bull market in stocks until 2028, so there’s still plenty of upside to capture. I know that’s an outrageous prediction to make… especially given all the volatility this year. And I realize this isn’t the message you might want to hear. Your portfolio’s down… food prices are climbing because of inflation… and watching the news each night is terrifying. So I get it if my message is making you uncomfortable… I got a similar reaction in 2014 when I said we’d be in a secular (long-term) bull market in stocks. Very few people believed me then. But those who followed my research made a ton of money. Like then, I promise to tell you what you need to hear… not what you want to hear. It’s exactly what I demand from fund managers who handle my money. It’s the same yardstick I hold myself to in all my newsletters. And what you need to hear right now is that it’s not the time to sell. Instead, consider this… Despite record-high inflation and a painful market pullback, there’s a catalyst on the horizon that could return 21 years of S&P 500 returns in as little as 12 weeks… all from blue-chip stocks… And it could begin as soon as this month. That’s why last night, [I held a free urgent event]( to explain all the details… This catalyst is a rare opportunity to recapture any gains you’ve lost in the market this year… and position yourself to make much more. But you need to act now… Because this opportunity could be gone before the end of the month. So click here to watch the replay… and you’ll even get a free list of stocks to play this catalyst. I hope to see you then. Let the Game Come to You! [signature] Teeka Tiwari Editor, Palm Beach Daily --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG The green energy conversation continues… with some readers questioning the reliability of green energy… Reader Thomas wrote… Nomi, all the symptoms you mentioned here are part and parcel to the world embracing the “green new deal.” The energy that fires the earth forward is fossil fuel based, period. Trying to replace fossil fuels (with current technology) in the short term is a fool's errand. – Thomas M. This reader agrees with Thomas and looks to other examples of countries that have made the switch to green energy… I think Thomas is correct. Look at the Germans who went all in on green energy. They shut down their nuclear power plants and shut down a lot of their fossil fuel generating plants for electricity. Of course, they kept getting their supplies of natural gas (fossil fuel) from Russia. Oops. Now they are taking cold showers and will soon be freezing in the dark. Even if Russia resumes natural gas supplies, wind and solar did not do the job to replace their current electric capacity which they intentionally shut down. They have even reopened coal power plants (direst of the fossil fuels) to keep people from marching in the streets. In Texas, some of the major cities under Democratic rule went green replacing fossil fuels with green energy. Now we have an electric grid problem that cannot produce enough electricity because in the extreme heat the wind is not blowing sufficiently to provide wind powered electricity. When electricity is needed the most, the power is not available. I am all for cleaner electricity sources but it has to be ready for prime time before you shut down the reliable power. The political leaders are executing a plan for their agenda. The end user will be crippled with skyrocketing costs or lack of availability to actually have electricity to run their household or business. – Lawrence P. And another reader sees merit in both Nomi’s argument and fellow reader Thomas’ ideas… but wonders what will happen if we rely solely on fossil fuels… I was at first dubious about yet another newsletter from someone giving their tuppence worth of insight into the day's issues, but have to say have been more than a little impressed with the level of discussion so far. Regarding EVs and green energy, I think both you and Thomas M.'s arguments are flawed to some extent. Yes, clean/green energy EVs would provide us with a better future all round. And yes, the world currently only moves forward based on fossil fuels. BUT, to believe that electric vehicles along with vastly reduced industrial emissions provides a silver bullet to current climate change problems is both short-sighted… and possibly a con to make people think they are doing something positive to alleviate this situation. And regarding the world running on fossil fuels, if nothing is done to change this, does Thomas think that would not have a continuing, increasingly ill effect on the world's climate? Air temperatures? Weather events (hurricanes, tornadoes, flash flooding, etc.)? Sea levels/ice melt? This is all happening now – just watch the news from around the world. – Mike Z. Do you agree with Lawrence that the government pushing green energy is just a political play? Are EVs just a "con" to make people think the government is "doing something positive" to alleviate the climate change problems, as Mike suggests? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: This Market Sell-Off Is Like an In-Game Reset). IN CASE YOU MISSED IT… [If the talking heads in the mainstream media have you seeing ghosts of 2008...]( You’ll want to pay close attention... A former Wall Street managing director who walked away from a million-dollar career, Nomi Prins, is now a prolific author and one of the world’s most respected Investigative Journalists. You might recognize her from appearances on Fox Business... CNBC... Bloomberg... PBS... or CSPAN... She’s exposing a bombshell story about a strange phenomenon in our financial system... A $150 trillion transfer of wealth she calls "The Great Distortion", could soon trigger a historic windfall for some Americans... [Click here to see what it means for your money.]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. 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