With the stock market hitting all-time highs recently, many investors are wondering if it’s finally time to put their money back on the table.
The answer is a resounding “no,” if some of the smartest minds on Wall Street are any indication.
Quietly, a handful of Wall Street’s most powerful hedge funds have been dumping stocks in nine specific companies at an alarming rate. Most troublesome for investors is the fact that a large percentage of these stocks have been American companies. . . . If they collapse, the entire market could collapse.
One controversial economist, Robert Wiedemer, author of The New York Times
best-selling book Aftershock
, warned, “Get out now. The stock market is in a major bubble. Big investors know that, and are already selling.”
Robert Wiedemer correctly predicted the collapse of the U.S. housing market of 2006 and stock market breakdown of 2009, and he now says, “This country faces a 90 percent stock market crash starting as soon as this year.”
Related: Wiedemer Explains Why Billionaires Are Dumping Stocks and How to Prepare
And while Wiedemer’s predictions may strike some as impossible, a quick glance at the nine stocks that Wall Street is dumping makes a strong case that Wiedemer is once again on the right path.
According to recent filings, some of the largest hedge funds on Wall Street are completely abandoning their holdings of major oil companies. SAC Capital Advisors, run by Steve Cohen, and billionaire Stanley Druckenmiller both sold all their shares in Exxon Mobil (XOM). Druckenmiller also sold all his shares in Chevron (CVX), as did Citadel Investment Group, run by Ken Griffin.
If they, like Wiedemer, believe the country is facing another devastating recession, the move makes perfect sense. During a recession, demand for oil falls, and along with that the profits of the oil companies.
But that’s just the tip of the iceberg.
Another major indicator that these hedge funds may be worried about a major economic slowdown is their abandoning of stocks that rely on consumer spending to drive profits.
As is widely reported, consumer spending drives about 70 percent of the U.S. economy. Three hedge funds, including Lone Pine Capital, Omega Advisors, and Third Point sold off their entire positions in Apple (AAPL). Omega Advisors also sold its position in Walgreens (WAG), and Trian Partners, led by Nelson Peltz, disposed of its position in Kraft Foods (KFT).
Rounding out the list of stocks that Wall Street is dumping right now is Microsoft (MSFT) and Hewlett-Packard (HPQ) by Baupost Group, Yahoo (YHOO) by Bridgewater Associates, and Wells Fargo (WFC) by Citadel Investment Group.
While no one knows for certain exactly why these hedge funds are selling their shares, it’s possible that these professional investors foresee a devastating market collapse, just like the one that Weidemer describes during a controversial interview for his latest book, The New York Times
In the interview, Wiedemer provides disturbing evidence that the country not only faces a massive stock market collapse, but also a worst-case scenario of 50 percent unemployment and 100 percent annual inflation.
When the host of the interview expressed disbelief in Wiedemer’s claims, he calmly displayed five indisputable charts to back up his predictions (click here to see those exact charts
The interview has become a wake-up call for those unprepared (or unwilling) to acknowledge an ugly truth: The country’s financial “rescue” devised in Washington has failed miserably.
The blame lies squarely on those whose job it was to avoid the exact situation we find ourselves in, including current Fed Chairman Ben Bernanke and former Chairman Alan Greenspan, tasked with preventing financial meltdowns and keeping the nation’s economy strong through monetary and credit policies.
At one point, Wiedemer even calls out Bernanke, saying his “money from heaven will be the path to hell.”
Wiedemer also makes a clear case for why he thinks hedge funds like SAC Capital Advisors, Citadel Investment Group, and Omega Advisors could be dumping U.S. stocks:
“Companies will be spending more money on borrowing costs than business expansion costs. That means lower profit margins, lower dividends, and less hiring — plus, more layoffs.”
No investors, let alone Wall Street billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why the hedge funds are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
But Main Street investors don’t have to see their investment and retirement accounts decimated for the second time in five years.
Wiedemer’s video interview also contains a comprehensive blueprint for economic survival that’s really commanding global attention. It offers realistic, step-by-step solutions that the average hard-working American can easily follow.
Editor’s Note: See the 5 signs the stock market will collapse in 2013. Click here now
“[The interview] was originally filmed for a private audience,” explained financial publisher Aaron DeHoog, who is unapologetic about the release of controversial footage. “People were sitting up and taking notice, and they begged us to make the interview public so they could easily share it.”
Since that day, more than 50 million concerned citizens have tuned in to prepare for “the unthinkable.”
DeHoog was asked recently whether he’s concerned in the event that Wiedemer’s predictions don’t come true. “Absolutely not. The best-case scenario is that Wiedemer is wrong . . .
“Unfortunately, he has been dead-on thus far. No, our real concern is this, and it’s the more likely scenario — what if just half of Wiedemer’s predictions come true? Bottom line, it is imperative that Americans be prepared, and that is why we will continue to air this powerful interview.”
Editor’s Note: For a limited time, Newsmax is showing the Wiedemer interview and supplying viewers with copies of the new, updated Aftershock book including the final, unpublished chapter. Go here to view it now.
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