I have co-written a report with Brian Frank, CIO of Frank Capital Partners LLC. The report describes the unprecedented distortions in the stock market caused by Vanguard and other passive investing firms. However, as we show in the report, this bubble is nearing a hard endpoint and the results will be disastrous for most investors. It also clearly explains the reasons why the market rise has been seemingly unstoppable over recent years, despite lackluster company earnings. Fortunately, the end of this trend is in sight but the market will continue to rise until passive fund flows hit their demographic turning point.
Here is a link to the report:
The Coronavirus has the potential to be the catalyst that accelerates the market crash we expect from the end of the passive investing mania. We are not experts on virology but it is the clear global supply chain breakdown and economic impact of businesses shutting down that are key for the markets. We are not sure if this is the moment it all becomes unglued, but we are well-prepared. Given China’s historic credit and banking system bubble, the Coronavirus could be the spark that causes the financial gunpowder to ignite. If so, the impact will be global.
I am happy and excited to discuss this report. Please feel free to contact me with any questions or comments.
-Alfred C. Frank, President
Frank Capital Management LLC