Port Phillip Publishing’s Magnetic Field Flip

The Earth, as I’m sure you know, has a magnetic area. Now I’m no professional, but if I recall my senior high school geology correctly, this is generated by churning liquid iron close to the solid core of our world. This magnetism results in the Earth having a northern and a south pole.

And that’utes why you can depend on a compass needle to point north. A fact that’s come in quite handy for those moving uncharted territory in the days before the Gps navigation.

But, according to Scientific American, every few hundred thousand years the magnetic rods flip. That means that your compass needle will point south instead of north. And, according to the article, ‘Earth’s permanent magnetic field flip could happen sooner than expected.’

But don’t go throwing out your own trusty compass just yet. Even if the flip does happen sooner than expected, we’re still talking hundreds of years from now.

Why do I bring this particular up? Because a number of the editors have done their own magnetic area flip recently. And this hasn’capital t taken hundreds of years, either.

The magnetic field flip

‘You’re traveling through another dimension, a dimensions not only of sight and sound but also of mind and heart. A journey right into a wondrous land whose boundaries are that of feeling and imagination. Look quickly. That’utes the signpost up ahead — your subsequent stop, The Twilight Zone!’

The Twilight Zone, CBS, 1959

Over the last few weeks here at Port Phillip Publishing’s headquarters, quite a few editors’ investment compass needles have moved highly away from their magnetic northern.

Perhaps the biggest shift came from Kris Sayce. For years he’s been bullish on the stock market, dismissing one false ‘crisis’ after another. And he’s been spot on. But over the last couple weeks Kris has taken a different read on the situation.

He sees a number of negative elements lining up that could well cause a marketplace crash as early as October. He’utes given the full details to customers of Tactical Wealth. Plus a number of inventory recommendations to hedge your portfolio against any major drop in the markets.

In short, it must do with rising interest rates as well as falling company earnings. And when Kris is right, this could well be the combination that drags the markets down by 20% or more.

Of program Kris hasn’t recommended you sell all of your stocks. In fact, over at Microcap Trader, Kris and analyst Shae Smith still uncover tiny Aussie listed companies that should do well regardless of how the wider market moves. Three of their four ASX outlined stocks are currently up. One of them by an eye-popping 196% since they tipped it on 23 June.

Our resident bear

Then there’s our resident bear, Vern Gowdie, the editor of Gowdie Loved ones Wealth.

You’re probably familiar with Vern. He’s a former financial planner who got out of the industry within 2006, after he cautioned his clients about the difficulty facing the markets. He was about two years early on that warning. But his clients — at least those who took their advice and moved their own wealth into cash — overlooked on the GFC market panic and the resulting 50% plunge in the ASX.

Since the launch of Gowdie Family Wealth two years ago, Vern has advised his customers to stay out of the inventory and bond markets, and out of commodities. He views the markets as extremely overvalued, supported by unsustainable levels of private and public debt, not to mention government intervention.

Vern’s long advocated a 100% cash placement, advising patience. After the market crashes, losing 50% or more in value, there will be plenty of discount hunting to be done.

That crash has yet to occur. So you can imagine my surprise when I read Vern’s August issue and discovered he has just made his first stock recommendation in nine years! (Cue the music from Twilight Zone.)

Now to be clear, Vern has not gone bullish. Far from it. But he does see some potential short term gains in one particular area. Here’s what he told his subscribers last week:

‘My criteria with regard to investing, are simple — low risk/high come back.

‘This is another way of saying buy reduced and sell high.

‘These opportunities do not come together everyday. You have to wait and wait some more for the buying opportunity. And then you have to wait around and wait some more for that market to eventually move the cost.

‘For more than a year and a half right now, I haven’t made any sort of investment recommendations to you — aside from my personal advice on how to get the best as well as safest returns on your cash — because the market prospects have all already been high risk/low reward.

‘But that has recently changed.

‘Although the truly low risk/high incentive prospects have yet to materialise, there is 1 beaten down commodity that represents the first opportunity to move part of our holdings out of cash, at least for a while.’

Vern’s also currently operating around the clock on a brand new project. I only just had my own close look at this last week. I can’t share any of the details along with you yet, but I can tell you that from what I’ve seen, this could be the most important investment advisory around australia.

We’ll fill you in on all the details towards the end of this month. Stay tuned.

Regards,

Bernd Struben,
Managing Editor, Money Morning