And it’s time for me to make good on my promise to you.
As you know from yesterday, after the Great Recession of 2007-09, the blockheads in the Federal Reserve decided that to fix the problem of not enough children getting a cookie, it’d be best to put the entire cookie jar on the ground.
The bonanza ended by pushing the broad-measured S&P up 548% in about 10 years.
Great. Economic “growth” and “stability” roared through the headlines.
But that decade will later be known as the Age of Irresponsibility.
Little companies with just a dollar and a dream were able to build businesses that were barely (or NOT) turning a profit – because the debt they needed to pay back had barely any interest on it!
Everything was good. Until it wasn’t.
And it wasn’t beginning just a few months ago when the Fed raised rates. They continue to today, and they’ll continue to tomorrow as well.
The worst part (for these deadbeat companies) is that credit risk – the risk of inability to pay back the credit on debt – can be a slow burn.
Interest rates continue to rise, and the unprofitable freeloaders start revealing how much debt they have and how thin their margins really are.
Companies will be slaughtered in the coming months. And it won’t be only a dozen or two. We’ll see a wave of them over the next three months.
The good thing about this for you and me is that there’s a way to profit from them. To extract cash from them, over and over and over again, using a simple strategy.
That’s all part of what I lay out in the research you can check out right here.
I’ll see you there.
Chief Investment Strategist, Money Morning
August 18 2022