Forgive me if that headline got a scowl out of you.
I get it … 2008 was a party for almost nobody.
For most, it represented the most difficult financial period of their lives.
A 401(k) cut in half. Home value plummeting by the day. Delayed retirements and careers…
I was in wealth management at the time, serving high net worth individuals and families. I saw it all firsthand and it was utterly heartbreaking.
That early in my career, I was essentially handcuffed to the company’s party line “buy-and-hold, 60/40, do or die” style portfolio. All I could do was soothe my clients as we rode the market all the way down. My job was less wealth manager … more crisis counselor.
I was especially frustrated because I knew there was more I could do. I knew there were countless better ways to protect people’s funds and profit during a downturn. But I was powerless to use them without risking my job.
That’s why I left wealth management in early 2009. And I was unshackled.
I learned more alternative trading strategies. I consulted everyone from hedge fund managers and commodity trading advisors to family offices.
My career from then on was dedicated to leaving no stone unturned. I never wanted to be in the position of trapping my clients in losing investments ever again.
And that’s what led me to what I do today: Helping everyone I can make the best of whatever economy we’re experiencing at a given time.
This leads me back to that scowl-inducing subject line…
You see, for a small handful of investors, 2008 was one hell of a party.
And today, faced with what could quickly become another 2008-style event in the banking sector … I have your invitation ready.
Bank Crisis on Repeat
If you were naturally risk-averse, extraordinarily plugged in or just plain lucky, you may have been among the small group of traders that consider 2008 to be the year that changed their lives for the better.
It enriched them far beyond what they thought was possible. And it was all because of the things that no one else managed to pick up on.
You see, for every buyer in the market, there has to be a seller. That means, fundamentally, that one side in a transaction is right and the other is wrong.
A lot of buyers got it wrong in 2008, especially those that dealt in mortgage-backed securities and the credit default swaps. The tiny fraction of right sellers — as we know now — made out like bandits.
I don’t want to dwell on 2008 too much here, though. It’s only to show how similar of a situation we’re in today.
So far in 2023, three major banks have failed. The size of just those three collapses already eclipses the value of 25 banks that failed in 2008.
This has led many to believe (wrongly, in my opinion) that we’ve seen the worst of this crisis. The reality is that this was Act 1 of a three-part epic that’s just warming up.
The conditions that caused these major banks to collapse have not changed, and in fact are only getting worse. Data out last Friday showed the Federal Reserve’s preferred inflation measure actually accelerating. The response from the futures markets was to price in another rate hike at the Fed’s next meeting in two weeks — a hard pivot from the pause everyone initially expected.
And what’s caused all the banking blowups this year? Rapidly rising interest rates on portfolios stuffed with long-duration, “low-risk” Treasurys.
Rate hikes, though, are only one element of the perfect storm brewing.
A far worse, and even more pressing matter is the empty office space stretching into the heavens across U.S. city skylines.
The $1.5 Trillion Real Estate Problem
By the end of next year, a massive $1.5 trillion worth of commercial real estate (CRE) loans are set for refinancing. This comes at a time where small regional banks — the chief lenders of CRE loans — are fighting depositor outflows and a demolished long-duration Treasury portfolio.
Put another way … small regional banks are in the first innings of a potential years-long bank crisis that’s only started to unwind.
This has all the makings of another 2008-style event. It will have far-reaching impacts that most buy-and-hold investors (and their wealth managers) are unprepared for.
The main difference this time is that I’m not stuck being a crisis manager for my clients. Now, I can show you how to actively navigate this coming crisis with virtually no limits on the strategies we can use.
So here’s the plan…
Even before the crisis began early this year, I’ve been researching which of these banks could go under (they weren’t in much better shape before). And based on my latest findings, there are nearly 300 publicly traded stocks that are under threat of going completely bust in the coming months and years.
What I wished I could do back in 2008 was tell my clients to use a special, “off Wall Street” strategy that has all the benefits of trading against weak stocks with a tiny fraction of the risk. That would’ve, at a minimum, cushioned the blow of the losses in their primary brokerage accounts.
Now, 15 years later, this is exactly what I plan to share with you.
Tomorrow, I’m opening the doors for you to join me and start targeting these stocks yourself. Based on past results using this strategy, I anticipate we’ll have the opportunity to more than double our money, time and time again, as we trade the weakest stocks in the market. Put your name on the guestlist for my 1 p.m. Eastern time event here.
If this is another 2008, I’m prepared to do everything I can to help you and your family look back on these years fondly. Pop the champagne, because this party’s just getting started.
To good profits,
Adam O’Dell
Chief Investment Strategist, Money & Markets