The “Warren Buffet Indicator” Warns of Stocks Collapsing by a Staggering 50% in 2014

If rumours in the market were to be believed, then Warren Buffet, the Billion Dollar Investor, could be preparing to confront a possible market crash this year. The “Warren Buffet Indicator” (also referred to as the Total Market Cap to GDP Ratio) has been indicating a sell alert which clearly means that at any moment, the stock market could witness a major collapse (probably by a whopping 50%).

Mark Spitznagel, a hedge fund manager popularly known for his hugely profitable billion-dollar bet on the 2008 crisis, has commented that people “should not be surprised on hearing rumours of a market crash – in fact, they should expect it”. Spitznagel isn’t the only one who is claiming this possibility. Marc Faber, Fund Manager and Swiss Advisor, has stated that the current times bear witness to a huge financial asset bubble which could burst at any moment, considering the dynamics of global economics. The government policies laid by President Obama’s team and the highly risky low rate policies prepared by Federal Reserves are being blamed for the upheaval in the financial sector.

Under such circumstances, what options are investors left with? You could either sell your stock and stash the money away till the turbulence subsides or you could try to ride out the storm by risking everything that you have. However, Alonzo Powell, Founder and CEO of Online Robotic Stock Trader, has come up with a third alternative. Alonzo stated that certain sectors in the stock market have guaranteed potential of performing well over the coming months. While it may seem that getting out of stocks could prove to be useful, Alonzo feels otherwise. In fact, he believes that retreating now could prove to be more costly than holding on to your stocks and moving ahead while targeting the profitable sectors.

But what made Alonzo so sure about this possibility? The secret lies with Automated Trading Systems which have helped him analyse and process millions of financial data and funnel them into comprehensive outcomes. The systems have been integrated with his successful and effective trading strategy and he is always a step ahead of the competition. Not only did the systems alert him of a possible market collapse, but it also provided valuable information with which he was able to arrive at a good resolution which would help him to survive the oncoming market turbulence.

Still waiting out to find the conclusion of the Bear vs Bull fight? You would only be wasting your time. Take a stand, analyse your financial data and relate it to market dynamics. You might come up with a completely new approach to the situation. If you have a suggestion or idea, please feel free to share it with us and give us the benefit of your expertise.