Warren Buffett Would Like a Word With You

By Graham Summers, MBA

Warren Buffett is arguably the greatest investor of all time.

Unlike many of the super wealthy that existed before him (Rockefeller, Morgan, Vanderbilt, Dupont) Buffett wasn’t an entrepreneur who built an oil, steel, banking, or railroad empire. Instead, Buffett was an investor, who allocated capital in such a way that his holding company Berkshire Hathaway, grew to be one of the 10 largest companies on the S&P 500.

Buffett himself grew to be worth over $100 billion in the process.

Put simply, this is a man who got unbelievably rich from the markets. So when Warren Buffet speaks on the subject of stocks, it’s a good idea to listen.

One of Buffett’s best known quotes concerning the markets is that “trannies don’t lie,” meaning that the Dow Jones Transportation Index, which is comprised of companies associated with transportation in the real economy is one of the most accurate economic bellwethers out there.

Put simply, whatever the Dow Jones Transportation Index does, is a solid indicator of what’s happening in the economy.

I mention this because the Transportation index has just broken down from a clear Head and Shoulders topping pattern. This suggests the economy is rolling over in a significant manner.

Now take a look at the Transportation index (red line) overlaid with the broader market as represented by the S&P 500 (black line) in the chart below. The implication concerning the economy is clear. But the S&P 500 has yet to “get it.”

Indeed, in the Big Picture, my proprietary Crash Trigger is now on the first confirmed “Sell” signal since 2008.

This signal has only registered THREE times in the last 25 years: in 2000, 2008 and today.

If you’ve yet to take steps to prepare for what’s coming, we have published an exclusive special report How to Invest During This Bear Market.

It details the #1 investment to own during the bear market as well as how to invest to potentially generate life changing wealth.

This report is usually $250, but we’re giving away 100 copies for FREE to those who sign up for our free daily market commentary.

As I write this, there are less than 40 left.

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Posted by Phoenix Capital Research