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Why Investors Should Prepare For A 50% Drop In Stock Prices
This is Porter’s Daily Journal, a free e-letter from Porter & Co. that provides unfiltered insights on markets, the economy, and life to help readers become better investors. It includes weekday editions and two weekend editions… and is free to all subscribers.
Winston Churchill’s famous “The Few” speech… The S&P 500 could drop 50% or more… Never has the spread between haves and have-nots been this great… Even the wealthy are spending less… This recession indicator says “not yet”… |
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While Porter is fishing in Panama with his son Seaton (keep up with his adventures on Instagram), The Big Secret On Wall Street analyst Ross Hendricks is picking up the baton to write today’s issue of the Daily Journal.
In August 1940, British Prime Minister Winston Churchill delivered to the House of Commons one of the most rousing wartime speeches of all time.
In what became known as “The Few” speech, Churchill praised the heroic efforts of the UK’s Royal Air Force, outnumbered three to one against the German Luftwaffe during the pivotal Battle of Britain.
The signature line of the speech went down in history:
“Never… was so much owed by so many to so few.”
Something similar could be said of the U.S. economy and stock market, including:
Never has the engine of America’s economy been so dependent upon a relatively “few” wealthy households
Never has the financial health of these households been so dependent upon the gains from a rising stock market
Never before has the U.S. stock market been so dependent upon the performance of a small handful of stocks that are trading at sky-high valuations
But unlike Winston Churchill’s speech, which roused a nation to emerge victorious in the Battle of Britain and in the war, “the few” who are currently propping up the U.S. economy cannot support the nation much longer – macroeconomic data is now showing clear signs of consumer distress among all sectors of the population. In fact, U.S. Treasury Secretary Scott Bessent recently described the need for a “detox” period to cleanse the U.S. economy of its imbalances.