Run From The Stock Market Zombie!

You’re probably asking yourself why I’m calling the stock market a zombie. After all, the stock market has made an amazing comeback after shedding nearly a third of its value in March due to COVID-19.

We should all be celebrating right? Not exactly. I’ll tell you why the stock market is a zombie.

It’s a zombie because it came back to life unnaturally. It’s a dead man walking because there are no underlying economic reasons for it to be trading this high.

I’ll explain why:

What about the latest crash/recovery cycle?

After hitting an all-time high in February of this year, the Dow Jones nearly reached that mark in August fueled by a surge in retail investor trading. This latest recovery took a mere SIX MONTHS to return to the market’s previous highs after crashing in March. Something’s not right.

This latest recovery is not supported by strong underlying fundamentals like past recoveries. 

The GDP is still way down and unemployment is still high. That’s why I call the stock market a zombie. It’s alive for the wrong reasons.

Here’s one area of concern:

The Dow has historically traded at an average price/earnings (PE) ratio of 15. The PE ratio measures the average of the Dow company stock prices compared to their earnings.

A high ratio indicates stock prices out of touch with underlying economic fundamentals. The Dow is currently trading at a PE ratio near 28 – nearly double the historic average. Stocks are clearly overvalued and bound to come crashing back to earth.

I’m not the only one warning investors about the stock market.

Many experts are also sounding the alarm. So-called bond king Jeffrey Gundlach, CEO of DoubleLine Capital, recently had this to say about the surge in the stock market:

“This is a terrible sign for the condition of the market for anybody who’s experienced a significant number of cycles, which I’ve definitely experienced,” Gundlach said.

In another sign that you should avoid the stock market, Warren Buffett recently made headlines for sidelining billions in cash after liquidating massive amounts of his equity positions through his company Berkshire Hathaway.

So what explains the stock market surge if the underlying economics don’t support it? The simplest explanation? Noobs.

In video game speak, noobs are inexperienced players who thrust themselves into online game sessions. Many experienced players are annoyed by noobs because they break up the flow and predictability of the gameplay that most players are accustomed to. This exact same phenomenon is happening in the stock market.

Stimulus checks and social distancing have created a massive new breed of noob investors. The pandemic fueled a massive surge in new accounts to online brokers as noobs dove in – seeking to get a piece of a potential market comeback.

Charles Schwab, TD Ameritrade, Etrade, and Interactive Brokers all saw record new sign-ups, while millennial-favored Robinhood, which offers free trading, saw a historic 3 million new accounts in the first four months of 2020.

The influx of inexperienced day traders has resulted in greater volatility and unpredictability in the markets.

Experienced traders are annoyed by the onslaught of noobs. These noobs are undisciplined – buying and selling stocks on a whim. They’re also jittery and ignore any economic principles or analysis.

That’s why experts are raising the red flag on their trading behavior as they pick up some of the riskiest stocks on the market including bankrupt and penny stocks. Like in video gameplay, these noobs are bound to get hurt.

I’ve been sounding the alarms about Wall Street for years and have avoided its volatility but the level of volatility in the markets this year from inexperienced traders is at levels I’ve never experienced before.

I feel a duty to warn the public as I have no doubts that the market is bound for a huge correction and lives will be ruined as trillions will be wiped out in short order.

Smart investors avoid Wall Street volatility and the noob effect by investing behind a walled garden where certain experience and income and net-worth levels are required to even be considered for entry. That’s why savvy investors prefer private markets.

With long lockup periods of a minimum of 5-7 years, private investments impose discipline. It prevents noobs from buying and liquidating at will.

This is not to say that private investments are shut off to new investors, it’s just that these investors are different than the new investors invading the public markets. These investors usually have already been successful in other fields and also understand the consequences of illiquidity of their private investments and are still willing to commit their capital.

In the private markets, smart investors know that the alternative assets they invest in are still guided by basic economic rules – unlike the stock market where any semblance of economic discipline has been completely upended.

They know that with private investments, as long as they stick to certain fundamentals, they can’t go wrong.

That’s why they leave nothing to chance by concentrating on assets:

Why trust your investing fortunes to noobs?

Run from the stock market zombie!

Seek shelter in the walled garden of the private markets.

DISCLAIMER

This is neither an offer to sell nor a solicitation of an offer to buy the securities described herein.

THE OFFERING IS MADE ONLY BY THE PRIVATE PLACEMENT MEMORANDUM. THIS MATERIAL MUST BE READ IN CONJUNCTION WITH THE PRIVATE PLACEMENT MEMORANDUM IN ORDER TO UNDERSTAND FULLY ALL OF THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES ASSOCIATED WITH AN INVESTMENT IN THE SECURITIES TO WHICH IT RELATES AND MUST NOT BE RELIED UPON TO MAKE AN INVESTMENT DECISION.

The offering of securities described herein will not be registered under the Securities Act of 1933 (the “Securities Act”) or the securities laws of any state and the securities are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and such laws. Neither the Securities and Exchange Commission nor any other federal or state agency has passed upon the merits of or given their approval to the offering of the securities, the terms of the offering or the accuracy or completeness of the offering materials. The offering of securities is being made only to Accredited Investors, as defined in Rule 501(a) of Regulation D of the Securities Act. An investment in the securities is highly speculative and involves substantial investment and tax risks. All prospective investors must review the Private Placement Memorandum in its entirety, including the section entitled “RISK FACTORS” before investing.

An investment in Four Peaks Capital Partners, LLC is highly speculative and involves substantial risks, including, but not limited to: (1) Four Peaks Capital Partners, LLC success depends upon the performance of the Manager in managing Four Peaks Capital Partners, LLC and its investments, including decisions involving investment of Four Peaks Capital Partners, LLC’s capital and the acquisition and disposition of properties and there is no guarantee Four Peaks Capital Partners, LLC will raise enough capital to perform its investment objectives; (2) There can be no assurance that a prospective investor will receive any return on investment in Four Peaks Capital Partners, LLC and/or realize any profit on a prospective investor’s investment in Four Peaks Capital Partners, LLC and a prospective investor could lose all or a substantial portion of its investment; (3) The Manager has limited or no net worth and there can be no assurance that the Manager will have sufficient funds to meet its obligations to Four Peaks Capital Partners, LLC or to otherwise financially support Four Peaks Capital Partners, LLC; (4) The Class A members and Class B members have no power to take part in the management of Four Peaks Capital Partners, LLC and have limited voting rights and will not have the opportunity to evaluate or approve any of Four Peaks Capital Partners, LLC’s investments; (5) The Class A Interests and Class B Interests will be illiquid, and the transferability of the Class A Interests and the Class B Interests will be substantially restricted; (6) Four Peaks Capital Partners, LLC may not have the cash flow necessary to make distributions to its members; (7) Four Peaks Capital Partners, LLC will not diversify its investments and, therefore, the success of Four Peaks Capital Partners, LLC will be dependent upon the success of the properties; (8) There are substantial risks associated with real-estate investments and ownership of storage facilities and mobile home parks; (9) There are various potential conflicts of interest among the Manager and its Affiliates and their principals.
Investors must read and carefully consider the discussion set forth under the section entitled “RISK FACTORS” in the Private Placement Memorandum for a complete discussion of these and other risks pertaining to this investment.

These projections are speculative and based on specific assumptions, which, if incorrect, would cause the actual returns to differ materially from the projected returns. You should review the entirety of the assumptions and risks set forth in the Private Placement Memorandum.

Any underlying assumptions and any forward-looking statements herein may not be accurate, the projections herein shown may not occur, and actual results could differ materially due to risks and uncertainties that are beyond the Company’s ability to control or accurately predict. To the extent, the information in this communication conflicts with the information in the Private Placement Memorandum, the information in the Private Placement Memorandum shall govern.

The securities offered are an illiquid investment and involve a high degree of risk; Investors should be able to bear the loss of some or all of their investment. Investors should read and understand all of the risks and the entire Private Placement Memorandum before making a decision to invest. Past performance is no indication of future results and there can be no assurance that Four Peaks Capital Partners, LLC will be able to execute the investment objectives for the Properties or the Offering.

This material is for general information purposes only and does not constitute legal, tax, investment or other professional advice on any subject matter. Information provided is not all-inclusive and should not be relied upon as being all-inclusive.
Any capitalized terms used but not otherwise defined in this Presentation shall have the meanings set forth in the Private Placement Memorandum.

Any reference to “Four Peaks” “we” “our” or “fund,” regardless of capitalization, shall refer to Four Peaks Capital Partners, LLC, and its Affiliates.

For additional risks and disclaimers, visit https://www.fourpeakscapitalpartners.com
Four Peaks Capital Partners, LLC

2024 © Four Peaks Capital Partners™