Saturn-Uranus Square Alignment 2021-2022: Investors should “be fearful when others are greedy.”

Correlates with sudden reversals and corrections in markets, and market crashes (often due to liquidity crisis) that results in financial crisis.

The “Buffett Indicator” is a simple ratio: The total market capitalization of U.S. stocks divided by the total dollar value of the nation’s gross domestic product. It first crossed above its previous dot-com era peak in October 2019. Still, it has been trending higher for the past decade, and if there is one mantra Wall Street investors love it’s, “the trend is your friend.”

However, in recent weeks, even that long-term trend fails to justify the metric’s extremely frothy appearance. With the U.S. market capitalization more than double the level of estimated U.S. GDP for the current quarter, the Buffett Indicator ratio has surged to the highest-ever, reading above its long-term trend, suggesting a “strongly overvalued” situation.

Currently, the markets are in a liquidity-driven upcycle. With margin debt at record levels, stock prices in a near-vertical rise, and “junk bond yields” at record lows, the bullish financial media continues to suggest there is no reason for concern.

All told, it appears the current stock market mania has infected everyone from teenagers playing hooky from their zoom classes to day trade options on their Robinhood app, to major institutions trying to piggyback on those trades to Wall Street analysts tripping over themselves to try to justify the highest market valuations in history.

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J.P. Morgan famously said, “Nothing so undermines your financial judgment as to the sight of your neighbor getting rich.” And only in the age of social media could we ever have as many neighbors getting so fabulously rich all at the same time as we do today.

“The object of [financial] speculation may vary widely from one mania or bubble to the next. At a late stage, speculation tends to detach itself from really valuable objects and turn to delusive ones. A larger and larger group of people seeks to become rich without a real understanding of the processes involved. Not surprisingly, swindler and catchpenny schemes flourish.”
– Kindleberger

Note: Saturn-Uranus alignments correlate with contrarian outlook and thinking and contrarian trends in social behavior and commercial activities, along with contrarian trends in investing; by going against prevailing market trends by selling when others are buying and buying when most investors are selling.

Saturn-Uranus Square Alignment 2021 – 2022

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Responses

  1. I’m new here and a little torn regarding stocks and crypto. I’ve listened to a few recordings and I hear a lot about buying bitcoin, gold and silver. A large portion of my holdings are in stocks (Innovation, EV, tech spaces). When you talk about a stock market crash, do you mean S&P, traditional 401k or all stocks…the entire market?