Often wrong, never in doubt. – Bill Fleckenstein

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Q: ...I often forget that the last bubble occurred when most of todays momentum chasing traders were in the first grade and still wetting their beds...

Q: Hi Bill;
If after listening to William Cohan's interview on RV (1/13)..I would be crazy (or broke) not to own unleveraged gold. Thanks again for all your tips on investing.


Q: Have you heard of Hycroft Mining? My brother who is not quite the goldbug I am brought it to my attention because it was recently acquired by a SPAC vehicle called MUDS and will be brought onto the Nasdaq exchange from being OTC.

My brother was speaking very highly of the entrepreneur/investor Mudrick who apparently also took over an e-cigarette company out of bankruptcy after Juul exploded in value.

Clearly a positive sign that someone who doesn't specialize in metals is entering the space, but if you know anything about the project I'd be curious to know your thoughts!

Q: Hi Bill,
I know you have been on IBM's case and this article supports everything you have written about IBM. I have included only parts of the piece so here is the link: What Went Wrong With IBM’s Watson

What Went Wrong With IBM’s Watson
The A.I. project was supposed to change the state of cancer treatment. Here’s what happened instead.
But while a lot of the problems with Watson are medical or technical, they’re deeply financial, too.

As of 2018, IBM is shrinking: In 2011, when the company first introduced the idea that Watson might be able to one day cure cancer, its revenues were $107 billion. They’ve gotten smaller every year since, ending up at $79 billion in 2017. That presents enormous problems for any CEO, who’s generally charged with growing the company, or, failing that, growing the stock price.

It’s very hard to keep a stock price growing in a company where revenues are falling, because those companies tend to be valued on a multiple of revenues—and that multiple itself will fall. If IBM went from being worth, say, 3 times revenues in 2011 to 2 times revenues in 2017, then its market capitalization would have shrunk by more than 50 percent.

This hasn’t happened, however, because IBM has to some degree counteracted the negative forces and kept its stock price steady through two main strategies. The first is communications: If you can persuade the markets that you’re going to get bigger rather than smaller, then your multiples will grow and your shares will rise......

The second strategy for shoring up a stock price in the face of declining revenues is basic financial engineering, in the form of share buybacks. ......The downside of that strategy is that the more money you spend on buybacks, the less money you have to invest in growth.

As the STAT article put it:

Q: I've been watching the LEAPs on TSLA during this runup. While very expensive, there are puts that trade out to June of 2022. If one thinks of this as gambling money that could easily disappear, isn't the time premium alone on this worth it? I know you've mentioned not to fight the Fed when they're this desperate and willing to do anything, but is buying something with enough time premium in it just waiting for crazy instead of insane worth it?

Q: According to WSJ article:
'Federal Reserve officials are considering lending cash directly to hedge funds through clearinghouses to ease stress in the repo market. But that could be a tough sell for policy makers.'

Didn't realize propping up leveraged hedge funds was part of their dual mandate. When does somebody begin to question the Fed in an open forum, be it journalists at the next Fed press conference or members of congress at a congressional hearing?

How is the Fed not being investigated?

Q: Hi Bill,

Markets have been and are supported and protected by central bank interventions and extensive liquidity. The dictum, "don't fight the fed" has been in full force for over a decade and still is.

When market weakness occurs it is also clear central banks will provide more liquidity thus inducing, or trying to induce, further nominal gains.

At what stage (signals?) would you likely ignore continued and perhaps extensive additional Fed intervention and short a weak(ening) market?


Q: Hi Fleck - Happy New Year!

Just saw this - I'm speechless:

Hedge Funds Could Make One Potential Fed Repo-Market Fix Hard to Stomach: Federal Reserve officials are considering a new tool to ease stresses in the repo market

Hedge Funds Could Make One Potential Fed Repo-Market Fix Hard to Stomach

At at least know we can see that they really do intend to eventually buy equities to keep the market afloat, right? I mean why have a middleman (hedge funds) when you can just do it on your own like the JCB /SNB??

Q: I presume that you consider the Fed moving to an accommodative stance the primary engine of the equity market rally over the last year and the (not QE - Ha!) repo facility the primary reason the equity market has been essentially a straight line since October of last year. Do you think that the Fed can exit this repo facility without there being an equity market dislocation? Do you think there will be any equity market consternation if the Fed balance sheet nears the 4.5 trillion $ peak of QE3? What does Mr. Skin think regarding the above questions?

Q: I do not have a plan to cut back my positions in miners. Would you let us know if you start trimming your positions

Q: Demetri does a great podcast. This one with Jim Grant:

Hidden Forces Podcast

Q: Hi Fleck,

Thanks for the opportunity. Succinct depth, subtle hilarity, a clear articulation of the recent two past bubbles compared to the multi-asset bubble of today; your new Real Vision interview is a true classic. It will be recognized as such, and is much appreciated. Thank-you.