- Written by Andrew Snyder, Editorial Director, Inside Investing Daily
- Hits: 411
Strategies are changing rapidly in the New America. Investors who can't keep up are in for a rough ride.
Earlier this week Bill Gross -- the camera-addicted money manager who can't shut up -- said we're watching the "death of equities."
As our group's alternative-investing guru, I love the rhetoric. Nothing would be better than watching $37 trillion suddenly flow into the "unconventional" space.
I'd be a hero.
But alas... Gross is only doing what he does best -- spooking the herd and corralling it toward safety. What else would you expect from the "bond king"?
Traditional strategies like buying "the market" and holding from now until the Grim Reaper quietly raps on your front door may be done for, but equities certainly aren't dead.
As Twain would say... those reports are greatly exaggerated.
Instead, we need a fresh twist on equities. In the New America, we need to follow a different route.
Let me light the path...
[I]t's real interesting to watch. About 11 p.m., customers start to come in and shop, fill their grocery basket with basic items... and mill about the store until midnight. Our sales for those first few hours on the first of the month are substantially and significantly higher. If you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they've been waiting for it.
Those are the eye-opening words of William Simon, the CEO of the American division of Wal-Mart (WMT:NYSE).
The scene he describes is appalling... desperate... and disturbing. They call it "food stamp rush hour."
From a recent Reuters article:
At about 11:50 p.m., long, winding lines start to form at the three open checkout lanes. The manager takes to the storewide PA to summon all cashiers to their posts. As the clock strikes 12, the lines move slowly forward. Almost all the customers pay with swipe cards and linger over brimming carts to double-check foot-long receipts for errors.
It's a monthly event, and a sign of the times. On the last day of every month, at 24-hour Wal-Marts, food stamp recipients line up to make essential purchases just as their federal benefit cards recharge for the new month.
While you and I sleep, countless Americans watch the clock. With each tick of the second hand, their monthly reprieve creeps closer. They live month to month... and often, that's not enough.
What's most interesting about all this, though, is this chart:
As the American economy implodes on itself, Wal-Mart's value has soared. Shares are up 50% over the last 12 months.
Several years ago, I angered readers when I said Wal-Mart's cutthroat business practices were subsidizing the American economy. In many ways it's even more prevalent today.
But now we can argue the government is subsidizing Wal-Mart.
After all... a record 46 million Americans are signed up to get food stamps... and 85,000 fresh names were added to the disability roster in June.
My point with all this is not to incite anger or debate the merits of government aid. Lots of folks need it... but plenty of folks don't.
And my goal is not to incite you to buy shares of Wally World and its stream of dirty money. You can do better.
My point is to show you America has changed.
We all know the stuff of Graham and Dodd is dead. When Warren Buffett gets hauled off in his gold-plated casket, we'll bury the last great value investor.
So what comes next? What's after buy cheap... and hold forever?
Earlier today, I used the ideas from above to show Unconventional Wealth subscribers three alternative equity strategies that allow us to take advantage of the market's latest evolution.
Every one of them involves equities. And every one of them is available to ordinary investors. And each of them has the potential to significantly boost your annual gains.
It's like I told my subscribers; turning toward alternative assets -- like art, coins and land -- is a great tool. But let's face it: Not everybody has the means.
But I argue alternative strategies are just as valuable as alternative assets.
When the herd is stuck in its long-only mentality, we can sidestep the action and turn the volatility in our favor.
This is not your granddaddy's America. Sorry about that. What worked for him won't work for you.
Instead, we've got to play all the angles.
Take advantage of a government gone wild. Use Bernanke's printing press in your favor. And never be too timid to take a profit... no matter the source.
In the New America... equities are anything but dead. It's the old, tired strategies that have gone extinct.
From the Inside,
P.S. This little-known law is about to turn America upside down. One esteemed business professor warns it could send stock prices plunging by a whopping 50%.
But there are some simple moves you could make right now to protect your savings and actually make money... Click here right now for the details...