A tour through some of the greatest investment manias in history … the next big one is at our doorstep … how Louis plans to play it … Prediction 2024 tomorrow night
Two lasts of wheat, four lasts of rye, four fat oxen, eight fat swine, twelve fat sheep, two hogsheads of wine, four tuns of beer, two tons of butter, one thousand lbs. of cheese, a complete bed, a suit of clothes, a silver drinking cup.
According to Charles Mackay’s book “Extraordinary Popular Delusions and the Madness of Crowds,” this was the price tag for a single tulip bulb root during the Dutch Tulip bubble of the early 1600s.
Let it sink in…
One thousand pounds of cheese? Two tons of butter?
I asked ChatGPT how many sticks of standard grocery store butter that would be. It’s about 8,800…for one tulip bulb.
While it’s easy to scoff or think of the 17th century Dutch as somewhat primitive, that was hardly the case. They simply got caught up in a good ol’ fashioned investment mania.
The next mania happened about 100 year later when the South Sea Company helped bankrupt one of the most brilliant men in history
I can calculate the movement of the stars, but not the madness of men.
So lamented Sir Isaac Newton, formulator of the laws of universal gravitation, co-developer of calculus, creator of the Newtonian reflecting telescope…
…and horrendous investor.
Newton was a speculator in the South Sea Company stock bubble during the period around 1711-1720. For all his brilliance, he couldn’t protect himself from losing the present-day equivalent of more than $4M on the trade.
In short, Newton got caught up in the frenzy of excitement surrounding the much-hyped South Sea Company. He rode the stock up to filthy-rich levels, but then didn’t sell when the stock began to turn south.
Here’s how that looked…
One more from the modern era and then we’ll jump to our takeaway.
The rise and fall of Cathie Wood and her ARKK fund
For readers less familiar, Wood is the CEO and CIO of Ark Invest.
She’s best known for being the engineer of ARKK, which is her disruptive technology ETF. It holds a basket of high-growth technology stocks including Tesla, Roku, Crispr Therapeutics, and Roblox.
This fund exploded in the years leading into the pandemic.
As you can see below, from January 1, 2017, through February 12, 2021, Wood’s flagship ETF destroyed the S&P 500. ARKK climbed 733% in those four years, which was nearly 10X the S&P’s 76% return.
Source: StockCharts.com
But then, ARKK began to wobble. Small losses turned into bigger losses, yet Wood held, convinced the bullishness would return.
It did not.
As you can see below, from that February 2021 highwater mark though it low of late-December 2023, ARKK lost 81% of its value, while the S&P lost only 3.4%.
Source: StockCharts.com
But more disturbing is the fact that ARKK completed a “round trip” and worse.
In other words, had an investor bought on January 1, 2020, and enjoyed the monster gains that ensued – yet didn’t sell – he/she would have lost every single dime of profits, and more.
That investor would still be underwater today.
Of course, a huge number of ARKK’s investors didn’t buy in January of 2020. Like Newton, they bought near the top, and lost enormous quantities of capital, not profits.
But while the “crash and burn” part of these manias grabs our attention, we shouldn’t overlook the explosive wealth creation that precedes the crash
The final chapters of an investment mania can be a nightmare, but the early chapters? Well, that’s the fantasy we all dream about.
If your initial investment was big enough and you sold near the top, then whether by luck or skill, you created lifechanging wealth.
And this brings us to legendary investor Louis Navellier and his belief that we’re about to watch the last great investment mania of his lifetime.
For newer Digest readers, I don’t use the term “legendary” lightly. Louis is one of the early pioneers of using predictive algorithms to scour the markets for quantitatively strong stocks. He’s been called “Mr. Perfect,” “Wunderkind,” and Forbes even named him “The King of Quants.”
In his 47 years in the market, Louis has spotted and lived through all sorts of manias. So, his prediction about what he sees coming is important to consider seriously:
Wall Street is a manic crowd. It tends to “act first” and “think later.” However, sometimes its manias can result in big gains for investors.
For example, Wall Street’s knee-jerk reactions led to:
- A stunning rally in 2023…
- A massive bull market following the Covid-19 crash…
- The decade-long market that followed the 2008 crash…
- and the dot-com boom.
Today, I have some good news and some bad news for you.
The good news is another financial mania is coming that could open the kind of moneymaking opportunity I haven’t seen in two decades. The closest comparison to what’s coming next is what happened 25 years ago: The dot-com boom.
The bad news is it will likely be the last financial mania of my lifetime. And yours, too, if you’re over the age of 50.
Tomorrow night at 8 PM Eastern, Louis is holding a live event – Prediction 2024 – that pulls back the curtain on what’s developing
Louis’ advanced market quantitative system has helped him spot many financial manias as they’ve developed over the decades. Some of the stock gains from these manias turn out to be warranted, such as Nvidia.
Louis’ quant system found it in May of 2019. His Growth Investor subscribers are up 2,922% as I write. That turns a $10K seed investment into nearly $300,000. Better still, Louis believes this AI leader is going much higher:
We haven’t seen anything yet.
I expect NVIDIA to blow through $4 trillion in market cap this year and then rise to a $5 trillion market cap in 2025.
But not all stocks that soar in a mania are deserving. Their fast gains can disappear even faster when sentiment flips. This makes these frenzied periods of investor delirium rather dangerous.
On that note, while Louis believes this impending mania will make certain stocks explode higher, others will collapse. Tomorrow, he’ll explain it all. He’s even giving away two free recommendations to position yourself ahead of the surge.
To instantly reserve your seat for the event, click here.
Here’s Louis to take us out:
You can either sit back and become a victim of this coming mania, or you can turn this historical moment to your advantage.
Because it’s inside this ongoing gray area between what America looked like before what’s about to happen and what America will look like after where significant new wealth can be made.
I know exactly what to buy – because I’ve been tracking this mania with the same system that allowed me to nail the dot-com era mania and every one since then, from the GameStop chaos to the software-as-a-service boom, and more…
Manis are a lot more predictable than you think. You just need a quantitative secret to spot them early on, and then ride them to potentially generational gains without getting crushed.
And for that I have a secret, which I’ll be sharing tomorrow night at 8 pm ET.
Have a good evening,
Jeff Remsburg
