Dow Theorist Richard Russell: Sell Everything Liquid, You Won't Recognize America By End Of Year

[Newsjock]

Source: Business Insider

Richard Russell, the famous writer of the Dow Theory Letters, has a chilling line in today's note:

Do your friends a favor. Tell them to "batten down the hatches" because there's a HARD RAIN coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country. They'll retort, "How the dickens does Russell know -- who told him?" Tell them the stock market told him.

... Just as for years I asked, cajoled, insisted, threatened, demanded,that my subscribers buy gold, I am now insisting, demanding, begging my subscribers to get OUT of stocks (including C and BYD, but not including golds) and get into cash or gold (bullion if possible). If the two Averages violate their May 7 lows, I see a major crash as the outcome. Pul - leeze, get out of stocks now, and I don't give a damn whether you have paper losses or paper profits!

Read more: http://www.businessinsider.com/dow-theorist-richard-russell-sell-everything-liquid-you-wont-recognize-america-by-the-end-of-the-year-2010-5

[sui generis]

1. snork

sounds like someone has an exotic liquidation hedge primed and ready to milk . . . .

[Ruby the Liberal]

3. He's a gold bug. Has been for years.

[MilesColtrane]

2. Yeah, I'll take that under advisement.

I might give his opinion some weight if I was retiring any time in the next twenty years.

[xultar]

6. My dad is all in @ 65. i told him to take out everything except what he can risk.

I hope he listens.

[MilesColtrane]

10. After my Dad died, my Mom didn't rebalance their retirement portfolio for over ten years.

She lost a lot in the crash of 2008, and now has overreacted and put it all that was left into a money market account that isn't even keeping up with inflation.

She never took my warnings that she was overexposed to equities before and that she's losing money now.

I hope your pop has a little more respect for your advice.

[AllentownJake]

19. My Dad was burned on Lucent many years ago

Even though I warned him I didn't like their Accounts Receivable balance...

[Warpy]

4. It depends on why you're in the market in the first place

He's right about another crash, the market is far overvalued when you look at historic P/E ratios and compare them to what they are now. There are still too many concentrated wealth dollars looking for places to earn more dollars, though, so the crash is not going to go to zero and probably won't go far enough to get P/E ratios back to normalcy.

He's dead wrong about gold, IMO, since another dump in the stock market is likely to signal the beginning of a rapid deflationary cycle. Gold is what you buy when its price is lagging behind inflation, not when its price has risen far faster than inflation has, which is now the case.

Nobody's going to know what the right thing to do is until this mess is over and has been resolved into a saner, more sustainable economy and everybody counts up what they have left.

[ixion]

20. Indeed, well said.

We need to start focusing on sustainable models, rather than Ponzi schemes, and there needs to be a real reckoning of the books and a return to real market value. Until that happens, we're just whistling past the Texas Chainsaw Massacre guy's place.

[sharesunited]

5. Maybe another 15 percent more downside to fill and test some remaining holes in the cheese.

Then a resumption of the upward charge.

[Statistical]

7. Gold Nut. Broken clock is right twice a day.

[WeDidIt]

8. Get in on the gold bubble pplz before it's too late!!!!!!!

What a con man.

[blue_onyx]

9. I do worry that the recession could get worse

It will take years to recover from the job losses that have already occurred. If the recession gets worse, it probably won't be until the end of the decade before get back to "normal."

[JDPriestly]

11. The fundamental imbalance between pay to working people and

capital available for investment by the rich has not been changed. The whole system will have to be shaken a lot to get it back into working order. Nobody at the top is desperate enough to do what needs to be done.

I have a couple of friends still waiting to be foreclosed. They cannot and will not be able to make their payments. The banks are just holding off so that they don't get too much inventory.

[AllentownJake]

12. We'll see what happens in Europe over the next two weeks

Germany is talking about banning shorts so someone is scared shitless.

[redqueen]

13. He says we're still in the same bull market that started in the 80's. (nt)

[EC]

14. Won't everybody pulling out

cause a crash...therefore insuring his prediction as correct?

[AllentownJake]

15. Germany is about to do something funny

I think the european banking system is being held together with spit, toothpicks, and some duct tape right now.

[greencharlie]

16. what if you already can't pay off debt... and have no assets? nt

[WeDidIt]

17. Then you die

because you can't afford to buy gold from the con man.

[orwell]

18. Richard Russell...

...and the "Dow Theory"? Why don't we just call in the psychics.

Actually, Arch Crawford has a far better track record that Richard Russell and he used astrology to forecast the stock market.

Arch Crawford forgot more about technical analysis than RR ever knew.

Joe Granville anyone?