George Gilder: Enemy of Society?

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Friday’s reckoning drew an especially heavy mail.

We vented Mr. George Gilder’s unorthodox opinions about the virus. He claimed its actual threat has been fantastically exaggerated, that the terror has little excuse in the facts.

But George’s arguings failed to fetch the game. In fact readers seized their own shotguns… and peppered George’s backside with buckshot.

Reader Vince W. — for example — instructs us to:

Please tell Mr. Gilder that his stance against the wearing of face masks makes him an enemy of society, and he can go (fornicate) himself. If he brings his sorry a** anywhere near me without a mask, I will consider it assault and respond accordingly.

Alice S. insists George vastly soft pedals the threat. Far more Americans are vulnerable, she says:

We’re not Sweden. More than 40% of our population is obese (No. 1 comorbidity factor associated with death from COVID other than age). More than 40% are hypertensive (No. 2 comorbidity factor). I won’t even go into the millions of diabetics, asthmatics, immunocompromised, etc., who have additional comorbidity factors.

The point is that as a country, our entire country is either elderly and/or ill. Easily more than half our population falls into the “vulnerable” category.

Calls to let the lucky minority who aren’t vulnerable won’t help the economy. It will be liberating for them, and we need to do it, but it is too small a fraction of the population to make a difference to the economic devastation that has already occurred.

And it’s worth noting that the elderly (people over 60 seriously? Elderly?) and the “vulnerable” also comprise a high percentage of highly productive working people, business owners and entrepreneurs. Shunting them into second-class citizenhood status certainly won’t help the economy.

Sam L. raps us smartly across the knuckles for airing George’s packet of lies:

I am very disappointed that you gave Mr. Gilder the opportunity to spread such awful, misleading information.

Meantime, Jane F. is so steamed up she is attempting to cancel her subscription — again:

I canceled my subscription to this newsletter in part because of reasoning like the above. Will cancel it again and hope it works this time.

Alas, we can extend Jane no guarantee. We structure our operations on the model of Dionaea muscipula — the Venus flytrap.

It is far easier to come in than to get out, that is.

But we wish her a successful escape. We will nonetheless miss her if she slips our snare.

But is this criticism of George entirely just?

How Do We Know What to Believe?

George flouts the received wisdom, it is true. But is the received wisdom true?

Authorities initially informed us that masks were fraudulent defenders, that the virus can break the blockade.

They then executed a rightabout-face… and claimed masks in fact formed effective barriers to entry.

But are they correct?

Even now expert opinion divides. Some claim mask-wearing is actually harmful to the mask-wearer. For example:

Dr. Russell Blaylock — a retired neurosurgeon — insists masks concentrate the virus within the nasal passages.

From there it could beat a path clear through to the brain… and proceed against the neurology.

We cannot say if this fellow is correct or if he is incorrect.

But if even mask-wearing cannot gather expert consensus… how do we know what to believe? Or whom to believe?

One expert wars with another. We are all trapped in their crossfire, heads glued to earth, uncertain of its accuracy.

Each day appears to bring a fresh repudiation of a prior claim, of a prior study. That initial claim was a living and breathing truth until the new evidence murdered it.

And so it goes.

In conclusion… that which is known today may be disknown tomorrow.

Perhaps George is far off the facts, as our readers allege. But perhaps he is not.

We simply do not know of course. But does anyone? And who is to say the authorities responded properly to the threat?

Sweden May Have Gotten It Right

We have raised a provisional cheer for the Swedish approach in previous issues. Sweden did not padlock its economy.

The schools, the restaurants, most places of public resort remained open. Mass assemblies were banned, it is true. Yet only the aged and vulnerable were put in quarantine.

That is, the appropriate groups were put in quarantine. Much of the world, meantime, also threw the youthful and vigorous into quarantine.

The Swedish fatality rate exceeded the United States fatality rate — but not overmuch.

Now the virus has torn through the healthful population. Most suffered no symptoms or bearable symptoms.

They developed antibodies… and contrary to fears, most likely a sustained immunity.

Explains Sweden’s ranking epidemiologist, a certain Anders Tegnell:

It is quite certain that immunity does exist… For all the cases we have had in Sweden, there has not been one single person who had this disease twice. And we have a very strict identification system. So there is no way we would miss a person who had it twice. I haven’t heard any reports from any countries where there has been a certified case who has actually had this twice. There’s been rumors about it. But in the end, they have been disclaimed.

And so Sweden is likely on its way to the population immunity. That is, on its way to the “herd” immunity that will lift the siege.

The World May Have Gotten It Wrong

Meantime, the United States elected to hide indoors. Thus the virus did not sweep through the healthy herd.

And so the United States is far from the population immunity that Sweden may be nearing.

But is this herd immunity a heartless immunity that exacts an intolerable death rate?

Not according to another Swede — Dr. Johan Giesecke.

This fellow has been Sweden’s state epidemiologist. He has also been chief scientist with the European Centre for Disease Prevention and Control. From whom:

Most people will become infected by this and most people won’t even notice. We have data now from Sweden that 98–99% of the cases have had a very mild infection or didn’t even realize they were infected. So we have the spread of this mild disease around the globe and most of it is happening where we don’t see it because it happens among people who don’t get very sick and spread it to someone else who doesn’t get very sick… What we’re looking at (with the official number of cases and deaths) is a thin layer at the top of people who do develop the disease and an even thinner layer of people who go into intensive care and an even thinner layer of people who die. But the real outbreak is happening where we don’t see it.

We freely concede that Sweden is not the United States… as reader Alice reminded us.

Yet we find ourselves tied up to the notion that the Swedish approach was the generally appropriate approach.

And that a mass arrest of the healthy and virile was the inappropriate approach.

We are aware that places us outside the main stream. We swim instead in a parallel stream…

Outside of Consensus

This is a publication that likes to graze against the grain, to alter metaphors. And so we often veer sharply from “consensus.”

We prefer to patrol the boundaries of allowable opinion… and launch unauthorized raids across the forbidden frontier.

Thus we skirmish with ideas the mainstream would declare scandalous or outrageous.

We are not The New York Times. We are not The Washington Post. We are not The Wall Street Journal.

Nor do we aspire to be. And you would not read us if we were.

The Story Not Being Told

We are under bonds to you, our reader. Under bonds, that is, to tell you “the story that is not being told.”

It is true, we often report a false story.

We chase phantom leads. We go down ends that are dead. We lose our quarry’s scent.

At other times we take ourselves into water — water that is deep — and occasionally hot.

But sometimes we get it just about right.

And those rare instances make it worth all the while…

Regards,

Brian Maher
Managing editor, The Daily Reckoning

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We’re Sacrificing the Economy for Nothing

This post We’re Sacrificing the Economy for Nothing appeared first on Daily Reckoning.

Dr. Anthony Fauci recently warned the Senate of the possibility of “suffering and death” if the U.S. ended its lockdowns too soon.

For all his acclaimed brilliance, Fauci confessed that the reason for shutting down and locking in the economy and society was not the proven effects of COVID-19 but the possible “worst-case” impact.

As a doctor, above all, he does not want the patient to die. Any extreme measure is justifiable. But prescriptions tenable for individual patients are outrageously inappropriate for entire societies.

Human beings have evolved for millions of years with viruses and bacteria. If they could wipe us out, there would not be 8 billion of us around.

If enterprise were governed by worst-case possibilities, the Wright brothers’ plane could have never taken off, let alone an industrial or biotech revolution.

In that same vein, the so-called Green New Deal would close down the U.S. energy economy in the name of a theoretical peril of climate.

Author Jared Diamond regards overpopulation as the ultimate threat and would halt population growth and thus imperil economic expansion and support for the aged.

And Dr. Fauci would close the economy down for COVID-19 and any other possible plague.

But addressing all possibly extreme threats at once would cripple the economy that is the source of the wealth necessary to remedy any actual threat that occurs.

Dictating a repeated dictatorial response to speculative perils, the cautionary principle is a death sentence for the capitalism and freedom that have made it possible for the planet to support a global population of 8 billion people.

Today, lockdowns threaten starvation for an estimated 260 million people in the Third World who can least afford them.

Closures are ravaging the economy of India and wreaking mass starvation there, for example. The United Nations World Food Program estimates that by the end of the year 260 million people will face starvation.

Michael Levitt, professor of structural biology at Stanford Medical School and winner of the 2013 Nobel Prize in chemistry, says, “There is no doubt in my mind that when we come to look back on this, the damage done by lockdown will exceed any saving of lives by a huge factor.”

I’m not arguing that COVID-19 is not dangerous to the old and those with underlying conditions like heart disease, hypertension, asthma, diabetes and other conditions. Yes, it can be fatal to these people, unfortunately. And even if they live, those with severe cases may have lasting damage.

But we can protect the vulnerable while the overwhelming majority who aren’t vulnerable can get back to their lives.

So please, don’t say I’m insensitive to the people who have suffered and died. I’m not. And let’s just say my own age places me at risk, so I’m not being cavalier about it. But we have to look at the situation in its entirety.

The egregious blunder of the current lockdown illustrates the crippling flaws of bureaucratic management of economics and society.

As I wrote in Wealth and Poverty some 40 years ago, “Modern civilization is hopelessly contingent and problematical, subject to destruction any day by possible climatic reversals, astrophysical mishaps, genetic plagues, nuclear explosions, geological convulsions and atmospheric transformations — all conceivable catastrophes originating beyond the ken of plausible remedy or control.”

If we try to battle all these threats at once, we will end up wasting all our wealth on windmills, strewing them across the environment or tilting with them like Don Quixote. We will resort to ever more stifling controls that will suppress the unexpected benefits of creativity that have always been the source of our prosperity and success.

We will invest in problems rather than in opportunities and end up without either wealth or freedom. The human race has prevailed against the plagues and scarcities of its past, not through regulation or lockdown but through creativity and faith.

State planning killed close to a billion people in the 20th century. Led by the banning of DDT, the resurgence of malaria, the suppression of nuclear power and the retardation of global growth, environmentalist excesses have already killed more people than environmental pollution ever did.

Now the expert response to the coronavirus is on track to exceed even environmentalism in its vast damage of our civilization.

In the name of fighting COVID-19, we are destroying the monetary underpinnings of capitalist markets with untold trillions of dollars of wanton spending and crony bailouts.

We are closing down much of the economy for months on end. We are jeopardizing food supplies and other medical services.

We are giving up world leadership in technology to communists in China. We are condoning a devastating blow to the economies of third-world countries that unlike the U.S. cannot merely print dollars and expect people to take them.

It’s time to end the madness.

Below, I show you 25 findings on the coronavirus from the independent nonprofit Swiss Policy Research. It’s further evidence that the lockdown is far more destructive than the virus. Read on.

Regards,

George Gilder
for The Daily Reckoning

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Government Won’t Solve This Crisis

This post Government Won’t Solve This Crisis appeared first on Daily Reckoning.

I’m not a medical expert. But having watched scores of experts’ YouTube videos and blog posts on the COVID-19 crisis, I feel ready to draw some important conclusions.

I believe the truth on the coronavirus will become obvious fairly soon. That is, the crisis of the epidemic will be over, and it will become merely our chronic political crisis. It will become a crisis of narrative rather than a crisis of knowledge.

The Experts Weigh in

The two experts I have found most knowledgeable and convincing are William “Matt” Briggs, who earned a PhD in statistics from Cornell and taught there, and Rockefeller University and German epidemiologist Knut Wittkowski.

These are two voices in the wilderness shouting against the prevailing wisdom.

I drew ten conclusions. Since I am neither statistician nor epidemiologist nor professor nor politician, I can oversimplify their arguments without violating any academic or professional norms. Here they are:

    1. COVID–19 is basically another respiratory virus like many others. Yes, it can be fatal to the elderly and those with serious health risks. No doubt. But fearsome death rates are largely a function of testing biased toward acute cases. The tests are flawed by false positives and false negatives. Asymptomatic spread is speculative in the absence of antibody surveys that measure immunity.
    2. All respiratory viruses end through herd immunity, whether through direct exposure or artificial vaccination.
    3. Social distancing, closed schools, and obsessive masking prolong the epidemic and ensure a second peak comparable to the first. By flattening the curve, they widen it and thus render it more menacing to more people.
    4. The more that young people get exposed, the better. They are the vessel of herd immunity. Closing schools delays the immunity and tends to expose vulnerably old and frail grandparents in the home.
    5. By delaying herd immunity and assuring secondary peaks in the fall, school closings and other lockdowns will increase the number of deaths among the population of vulnerable and old people.
    6. As Briggs writes: “The H1N1 virus responsible for many deaths is still with us. The 2020 data from the Center for Disease Control (CDC) affirms, “Nationally, influenza A(H1N1) pdm09 viruses are now the most commonly reported influenza viruses this season.”
    7. Given the ease with which coronavirus spreads, it’s reasonable to suppose variants of COVID–19, like common colds and other respiratory distresses, including deadly pneumonia, will be with us for years to come.
    8. Briggs and Wittkowski agree that most testing is unreliable because of false positives, especially in initial testing. Fewer are misclassifications of deaths due to the bug but there is a tendency to suppose that deaths with the virus are caused by it.
    9. The conclusion, says Briggs, “is that it’s nuts to implement large–scale testing on a population. It will lead to huge numbers of false positives — which will be everywhere painted as true positives — and more panic.”
    10. Although closing down the private economy may seem plausible to physicians and politicians, it is an extreme overreaction to viruses that we will always have with us and provides a dreadful precedent for future crises.

Wrong Predictions

The worst projections turned out to be woefully wrong. We were told hundreds of thousands would die even with lockdowns and radical social distancing measures.

The Italians scared everybody with their haphazard health system and one of the oldest populations on the planet.

The crammed-together New Yorkers in subways and tenements registered a brief blip of extreme cases. Intubations and ventilators turned out not to help (80% died), sowing fear and frustration among medical personnel.

But the latest figures on overall death rates from all causes show no increase at all. Deaths are lower than in 2019, 2018, 2017, and 2015, slightly higher than in 2016.

I won’t make light of anyone’s death from this or any other disease, but deaths have been far below initial projections.

It was these wild projections that prompted the panicked lockdown. But it would have been an outrage even if the assumptions were not wildly wrong.

People Need to Get Outside

Flattening the curve was always a fool’s errand that only widened the damage.

In fact, by impeding herd immunity, particularly among students and other young people, the lockdown has prolonged and exacerbated the medical problem. As Briggs concludes, “People need to get out into virus–killing sunshine and germicidal air.”

This flu like all previous viral flus will give way only to herd immunity, whether through natural propagation of an extremely infectious pathogen, or through the success of one of the hundreds of vaccine projects.

Meanwhile, we all heard from politicians about a so–called “ventilator crisis.”

Governor Andrew Cuomo got $80 million worth of the contraptions and suggested he needed $800 million worth.

“More Money Is Always the Answer”

But that’s how governments think. More money is always the answer. More of the same. But what we need is entrepreneurial thinking.

Economist Gale Pooley of BYU in Honolulu and The Discovery Institute alerts me to the development in India of a new $200 smartphone–based ventilator system that fits in the palm of your hand.

Bypassing healthcare professionals, it uses machine learning to adapt to the rhythms of breathing and to adjust air flow to the lung conditions of patients.

It replaces the $2 million manually managed machines that have been widely deployed (ineffectively) to fight acute cases of lung failure from the coronavirus. According to urgent testimony from the front, these costly ventilators may have actually been killing patients as much as saving them.

Besides, the increasing recognition of herd immunity as the key to overcoming viral epidemics represents a huge advance over closing down businesses, schools, and economies.

We can’t leave the big decisions to government. The real solutions will come from the private sector.

The Private Sector Is the Answer

Wealth is knowledge and growth is learning. Learning accelerates in crises. Creativity always comes as a surprise to us. It is the result of free enterprise, which responds more quickly in the face of urgent needs than government.

Government guarantees tend to thwart the surprises of learning and growth. For example, if the government guarantees $2 million ventilators, there is no push to develop $200 devices like the one I mentioned.

The ventilator makers get rich, but no one else really benefits. It only deters innovation rather than spurs it.

On the optimistic side, the coronavirus crisis can well emerge as a time of new learning and economic growth rather than depression and paralysis.

Nassim Taleb’s theme of “anti–fragility” means crisis does not break free economies. It strengthens them, spurring invention and inspiring entrepreneurs.

The key is to leave open as many paths of learning and entrepreneurship as possible. Shutdowns and closures only inhibit the surprises of creativity and experiment that have saved humanity over the centuries of the capitalist miracle.

It’s possible that the economy, and your investments, will ultimately be enhanced by this crisis if we let the private sector work its magic.

Regards,

George Gilder
for The Daily Reckoning

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A Disease of the Mind

This post A Disease of the Mind appeared first on Daily Reckoning.

What are we afraid of? In recent weeks, I have been travelling around the globe and observing the rapid emptying of airports.

Does this mean that most people are in a panic over a new form of highly infectious flu?

It called to mind my studies long ago with the great economist and game theorist Thomas Schelling, who won the Nobel Prize in economics in 2005 mostly for his theories of “micromotives and macrobehavior.”

His book by that title showed that such phenomena as empty airports or traffic-jammed freeways or even segregated communities could reflect only the slightest changes in mindset.

Even small changes in people’s minds, oriented in the same direction, can effect massive changes in people’s collective behavior.

“Though a society can resist epidemics of physical disease,” as I paraphrase philosopher-psychologist Karl Jung in Wealth & Poverty

“It is defenseless against diseases of the mind. Against ‘psychic epidemics’ our laws and medicines and great factories and fortunes are virtually helpless.”

We’re currently facing a disease of the mind as well as a disease of the body.

Before my weekend break, my publisher interviewed me on the impact of the coronavirus.

Hey, I also have views on Tom Brady, quantum computing, President Trump, artificial intelligence, Bernie Sanders, integrated circuits, Pope Francis, 5G, Ronan Farrow, Wi-Fi 6, Kobe Bryant, the electromagnetic spectrum and Harvey Weinstein, among others.

I also have views on women that are too salacious to divulge at my age.

I share with most other commentators a lack of any relevant expertise or knowledge on the subject of the virus.

I suppose that under duress I could tell you the difference between bacteria and viruses. I am not altogether clear why a virus is harder for the immune system to combat, though I suppose it has something to do with the virus hitchhiking on other cells, using its Trojan horse strategy.

You get the picture, an ignoramus with the usual smattering of conventional knowledge — what the great Spanish philosopher José Ortega y Gasset called a “barbarian of specialization.”

I parlay my knowledge of certain particular fields into opinions on subjects on which I know little.

The barbarians are invading everywhere these days, using their confidence as actors, or microchip experts, or lawyers, or doctors of philosophy, or politicians to express confident opinions on subjects they know nothing about, such as God or CV-19.

I have a brilliant daughter who is a physician at a refugee camp in Thailand and may be in charge of its response. She believes anti-malarial drugs may be effective. I have a son who works for American Airlines and a daughter-in-law who works for JetBlue.

They can comment on the impact on the travel industry. It is understandably dire, but air travel is not going to go away.

I’ve had the flu from time to time and I’ve been to China, Italy and London.

Diamonds Form Under Pressure

What I do know something about is capitalism and markets. The barbarians today seem to believe that a crisis is abnormal in a capitalist economy and requires major government intervention to address.

This is an advantage for all of you who know that capitalism, in Nassim Taleb’s coinage, is “anti-fragile.” It gets stronger under pressure.

A crisis is a buying opportunity. It also is a learning process. Since real economic growth is learning, you can learn as you buy. Crises tend to accelerate long-term growth.

As Andy Kessler observes in The Wall Street Journal, crises like this are also inflection points.

“The current market turmoil tells me a new era is breaking, so question everything. Will cable, energy, mobile and social media ever come back? And if not, what’s next?”

Crises change economic leaders, filter out vulnerable companies, strengthen the survivors and open the way to new industries.

I’m involved with a number of biotech companies started by my young genius pal Matt Scholz.

He has many interesting views on the crisis and one of his companies may have already developed a vaccine. And so have various rivals. But the issue is how quickly vaccines can be produced in volume. I think I heard something like a year.

As an alternative, Matt points to existing anti-malarial drugs, which have been shown to mitigate the effects of the virus:

If I were running the country, I’d squeeze a big pharma and pay them to make tons of this stuff tomorrow. Then I’d start giving it to every geriatric person who can safely take it if they have been anywhere near a SARS-CoV-2-positive person as post-exposure prophylaxis!

After that, I’d start giving it to younger patients who test positive and have worsening symptoms. It’s admittedly a bit of a swing for the fences, but small-molecule drug manufacturing is scalable and cheap — health care providers and critical care infrastructure are neither. Even with a modest effect size, keeping the most vulnerable patients healthy could be life or death for the health care system itself. It would also allow younger people to get back to work without undue risk and give us a shot at preventing an economic catastrophe of epic proportions. We already know these drugs are well-tolerated; we’ve given them to healthy travelers on their way to malaria-endemic regions for decades.

It’s true that we don’t yet have proper large double-blind placebo-controlled trials proving they work for this purpose, but by the time we do, we’ll have lost many thousands of lives and billions of dollars.

That’s the problem not developing solutions but mobilizing to manufacture them in a country that the climate cranks, weather bores and chemophobes have rendered direly hostile to manufacturing and chemical companies.

Also, the problem is the health care burden on infrastructure.

Paraphrasing Anton Waldman, giving numbers to a previous judgment from contrarian John Tamny at Forbes, we’re sacrificing trillions of dollars of wealth and income in order to avoid a few billions of dollars on new hospital facilities.

Wealth is actually knowledge, which is the answer to this crisis. And knowledge can accelerate during a crisis.

Technology, for example, rapidly accelerates during wartime. You might not want to, but just look at the atomic bomb.

This crisis will provide many opportunities to invest in the future. Remember, the Chinese character for crisis supposedly consists of danger and opportunity.

Perhaps the crisis will even lead the world back to sound money…

Today, under our perpetually growing government and bloated system of finance, we couldn’t imagine any economic solution for recovering from WWII other than more money manipulation to make it worse.

In our current economic morass, we appear hapless to recover from a dip in markets at all-time highs.

Under my theory, money is time made tangible. True prices are not the nominal paper printed by central banks but the number of hours it takes to earn the money to buy something.

When the Fed cranks out more money without a commensurate increase in production, it takes more time to buy the same goods.

In my book Life After Google, I show that the gold standard was essentially created by Isaac Newton in the early 18th century when he was master of the mint in Britain and when his alchemy proved that gold was “unhackable” from inferior metals.

It still is. And a return to a gold standard would replace the phony, debt-addicted system that’s currently breaking down before our eyes.

Regards,

George Gilder
for The Daily Reckoning

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About What I Said in NYC Last Thursday…

This post About What I Said in NYC Last Thursday… appeared first on Daily Reckoning.

Nilus MattiveDear Rich Lifer,

As I mentioned in one of my issues last week, I attended the first annual Paradigm Press summit in New York City and gave a talk to both live attendees and thousands of additional investors with streaming access to the event.

The entire event was terrific with eye-opening insights from many additional presenters – Jim Rickards, Nomi Prins, Tim Sykes, Ray Kurzweil, George Gilder, Grant Cardone, Robert and Kim Kioyasaki… I mean the list goes on and on.

But for my part, I talked about two very important concepts. One of them was the secretive insurance-related investment I alluded to last week.

The other was the idea of trading “new” stocks for “old” ones at this point in the market cycle.

In a nutshell, my big-picture point is that investors are currently fixated with big-hype names while simultaneously ignoring the older (more profitable) versions of the very same companies.

One example I highlighted?

Beyond Meat (BYND).

To Infinity and BYND?

I’m sure you’ve heard of this “fake meat” company, which makes plant-based alternatives to everything from ground beef to sausage.

Now, look, there’s no doubt that many people are adopting healthier lifestyles.

There’s no doubt that the company’s products are great for what they are (though I would argue they aren’t actually healthy at all).

And there’s no doubt that Beyond Meat has quickly gained national attention and shelf space everywhere from groceries to fast food restaurants.

But as Brian Rose and I told a bunch of paying subscribers back in June, the action in Beyond Meat’s stock wasn’t making any sense at all.

Out with the New in with the Old

After an oversubscribed pre-IPO, the offering price of the shares ended up getting raised to $25.

Then, when they finally hit the market in May, the first trade took place at $46.

At the end of trading that day, the shares closed all the way up at $65.75.

And by the time our alert was going out, they had soared past $160.

Here’s the chart from the actual issue:

RLR

Obviously, that massive rally was great news for anyone who got in early.

But as we said, it didn’t look sustainable or justified at all.

So we told readers to get out if they were in and labeled the stock way overvalued.

At the same time, we pointed to Tyson Foods (TSN) as a much better alternative for several reasons, including:

  • Consistent profitability.
  • Regular dividend payments.
  • A strong business in traditional meat items, which aren’t going away.
  • Plus, an equally promising future in the same alternative meat categories that Beyond was involved in.

In fact, on that latter point: We mentioned that Tyson had actually been an early investor in Beyond and also owned many additional stakes in other “fake meat” startup companies.

For a few weeks, we looked pretty dumb as Beyond Meat kept climbing higher … all the way up to the $230 a share level.

Then, things started unravelling.

Here’s a chart showing the bigger picture through the end of trading last week…

RLR

As you can see, Beyond absolutely cratered after that final blow-off top.

All told, it’s about half of what it was when we issued our warning back in June and off about 65% from it’s all-time high.

Anyone who got out in time banked an awful lot of profits before it was too late. And anyone who bought put options or shorted the stock made an absolute killing.

What’s the Lesson?

But I tell you this story, just as I told it in NYC, for a very important reason…

It’s an extreme example – both in its magnitude and its accelerated timeline – of what I see in many corners of the markets right now.

There is a lot of hype being tossed around companies with hot names, charismatic CEOs, cool business ideas, and other buzzy type stuff.

Meanwhile, some of these same companies have no real long-term competitive advantages … they have very shaky finances … most often, they have zero earnings and are paying zero income to their shareholders.

In contrast, old “boring” names are being written off entirely. Companies that are very profitable. That pay big dividends. That, in many cases, are directly competing with the red-hot stocks that are wildly overvalued.

I don’t have room here to go into all of the specific examples that I shared with my live audience.

Suffice it to say that I’ve seen this whole movie before, back when I was working on Wall Street in the late 1990s and early 2000s.

I know exactly what happens when the tide goes out and the bottoms of the ships are exposed.

I also know how quickly that change can happen…

So my recommendation at this point is starting to take a closer look at what companies you’re currently investing in, how strong their underlying financials and businesses are, and how exposed they might be to any economic hiccup or other unforeseen speedbump.

At the same time, I also suggest looking to some of the widely-ignored, deeply undervalued bargains lurking out there in plain view.

To a richer life,

Nilus Mattive

Nilus Mattive

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