Who can resist that headline, right? If for no other reason than you want to check and see if maybe you own that “next major U.S. stock” that former Reagan budget director David Stockman thinks is going down.
That’s the headline from latest ad from Stockman’s Bubble Finance Trader newsletter service, which was launched fairly recently (I think) by Agora… and it is another small sign that the newsletter teaser market is turning now as the stock market falters, we haven’t seen many of these “next stock to crash” teaser pitches about short bets on individual names in almost five years (though the “all the world is about to collapse” ads are pretty evergreen).
Now that we’re seeing all those stories about short sellers making huge profits as the stock market “corrects”, the greed impulse is starting to emerge on the short side of the market… and greed sells newsletters. Fear does, too, but greed seems to work better.
So what is Stockman talking about? Here’s the intro to his ad:
“The Washington and Wall Street iconoclast who saw Wall Street’s 2008 collapse coming now says…
‘Today, I’m Revealing the Next Major U.S. Stock to Crash’ — David A. Stockman
“With over 50 million square feet of U.S. real estate and 220,000 employees, one company is set to crash. It could drop like an A-bomb on unsuspecting shareholders as soon as January 28th.”
Stockman has made a (new) name for himself over the last couple years as one of the doomsayers — he thinks US capitalism is so corrupted by politics and cronyism that it is largely unfixable, and was very vociferous about “getting out of the market and hiding in cash” three years ago when his book was published (The Great Deformation: The Corruption of Capitalism in America). That wouldn’t have worked as a market call as of now (the market is still 20% higher than it was back then), but who knows, maybe he’ll turn out to be right.
I think he’s right about some general things — the broken and corrupt system of elections and campaign finance, at least — but that doesn’t mean I’m confident he can tell me where the market’s going in the next five years, or whether we’re entering a recession, or whether a particular stock is going to go down. But he has to do something loud like this to get attention in the extremely competitive marketplace of pundits and soothsayers — people who have moderated views or express uncertainty don’t get attention… and authors and newsletter editors who don’t get attention don’t sell books or get subscribers, so they don’t get paid.
But with that caveat, I am at least curious to see what stock he thinks will crash… so what is it? More from the ad:
“I’m going to expose one of the biggest bubbles in corporate America.
“It’s my sincere hope you read this in time and take decisive action.
“Action to get out of the way of what could be a speeding train wreck… while positioning yourself correctly for one of the biggest potential windfalls of your life.
“You don’t have much time…
“On January 28th, 2016, just a few short days from now… I believe one company’s management could drop a bombshell on unsuspecting investors.
“I should be clear from the get-go: This company isn’t Apple… Facebook… Google… Netflix… or anything like that.
“Instead, it’s one of the most well-respected and important businesses in modern American history.”
He thinks that the company’s next announcement, in one week now, will send it “tanking by as much as 70% or more over the next 11 months” … and that investors who heed his advice and “buy one simple type of investment” could generate 300% returns.
So that’s the bigger picture. What other clues and hints do we get? First he moderates that prediction a little bit…
“My conservative estimate is you could make AT LEAST 50-80% by December, 2016 by betting against this stock right now.
“Though I’d be very surprised if it didn’t give you at least have the chance to triple your money.”
And then we get some more details…
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