Oct 31

Do It Yourself Asset Management 8

10. Watch out for signs of Market Wrecking:

Intentional Market Wrecking is done by rich and super-rich stock owners. It starts with the sale of some huge block of stock or portfolio. Such a sale will automatically start the entire market on a downward spiral.

The original seller can sop selling after a 5 or 10 point drop, once momentum has been established.

If a long term wrecking is decided upon, as in the 1929 crash, each time the market starts to rally, the rich and super-rich wreckers will sell short on other blocks of stock. Their resources are so great that they can keep doing this for years.

After a while, the frequency of attempted rallies will slow down as the market reaches a point of exhaustion. Margin buyers and those leveraged will be wiped out quite early in this process. Add bank failures, foreclosures on mortgages and other related financial reverses and you can see how a long term depression can be created.

Why would someone do this?
(1) because they can
(2) This is a way the rich and super-rich can remind everyone of the power they wield
3) The people who start this will stop selling early and “ride out” the crash they have created. Once the market bottoms out they can start buying assets at bargain basement prices and the big losers in the crash are all the small investors. Think of this as “A harvesting of the turkeys.”

Remember the words of John D. Rockefeller: “There’s no such thing as an accident. If something happens, you can bet that somebody made it happen.”

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