If the market keeps marching higher, despite all of these warnings signs that valuations are stretched and market sentiment is too bullish, what’s in it for the short seller? In the short term, it’s painful to have hedges on, as they detract from performance. We very much live in a “show me now” world where very few think and plan for the long term.
Just like a secular bull market, a secular bear market is one that lasts between five and 25 years. And while the average length of a secular bear market is about 17 years, there may be smaller bull or bear markets within it. Still, the average bear market is much shorter -- usually under a year -- and so definitions of what constitutes a secular bear market vary.
I am primarily a value investor. For me, the algorithms serve as a way to monitor whether my view about valuations is becoming accepted by other market participants. As I have mentioned, I believed earlier this year that we were in the late stage of a cyclical bull market. The markets are finally agreeing and turning the late-cycle bull into an early cycle bear.
But this time it didn't work. The market had been retreating for days and then tumbled 724 Dow points yesterday allegedly on the Donald's $50 billion tariff assault on the China trade. Not surprisingly, the overnight follow-through in Asia was downright bloody with Shanghai down 3.4%,the Nikkei lower by 4.5% and China's NASDAQ equivalent off by more than 5%. Read More
The disability payment and stock option distribution are one-time events which unfortunately inflates the family’s actual ability to contribute to Julie’s education. The disability payment has to provide care for the rest of John’s life, he is currently 53. The stock distribution was used to purchase living quarters that included making the home handicapped ready. This was necessary since his only income is Social Security and his wife earns $14,000 per year. It would be impossible to qualify for a mortgage.
Department of Education 2017-2018 FAFSA changes provided the reinterpretation of the definition of homeless youth. For students older than 21 and younger than 24 who are unaccompanied and homeless or self-supporting, and at risk of being homeless qualify as independent students. This group can now self-qualify on the FAFSA (no need for Financial Aid Administrator approval).
Jan 15, 2018 KEY to the current TOPPING. Two attempts to break through resistance, finally breaking through on the 3rd attempt. In the long, Map of the Market by Magnitude above, notice the aqua circle at the top right, shows the short distance between the current Dow price, and the min upside required to breach the upper parallel, just as in 1929, before a CRASH can occur. Most likely first a false breakdown, as we had in BREXIT, should allow us to sell shorts and re-position at a more advantageous level before the upper parallel is breached. We are at that juncture NOW.
The economies of the world are at an inflection point. Enough data points have now presented themselves to be able to see the outlines of a major shift in the markets of the world. We are at a pay attention moment. There comes a time when a successful investor must make some hard decisions to position himself to be able to take advantage of opportunities down the road. The markets are telling us now is such a moment.
Embrace uncertainty – Anyone who doesn’t follow this momentous maxim in coming years is likely to get one unpleasant shock after the next. Because the stable progression of the world economy since WWII is now coming to an end. What should have been a normal cyclical high in the next year or two, is now going to be the most massive implosion of a bubble full of debts and inflated assets. The system has been “successfully” manipulated for decades by central banks, certain commercial banks, the BIS in Basel and the IMF for the benefit of a small elite. Read More
I’ve read all of Matt Kratter’s books. Why? I used the simple but powerful strategies in Covered Calls, Rubber Band Stocks, Monthly Cash Machine, and Rocket Stocks. The Options strategies realized an annual yield exceeding 12% coupled with Stock Equity strategies yielding an annualized 90%. I simply followed the strategies because I’m a novice, not the brightest bulb. These strategies were adequate for advancing stock markets but there are now signs of an approaching market in decline. The BEAR has been observed prowling so I read Matt’s newest selection Bear Market Trading Strategies. I’m now informed, ready for the declining markets and am enthused. Matt has again gifted his readers with his talent of deconstructing the complex so a rational novice may continue to conservatively place trades. He advises on how to avoid negative-carry and using Options cautiously, trading with the trend. Matt advises of the dangers and promotes rationality and caution. He tells you the best times to buy and sell using simple highest price/closing price indicators. Then Matt tells the reader how to determine when the Bear is returning to the den. He devotes a chapter on how to short momentum stocks using the simple 50 and 200 day moving averages and provides historical data as confirmation. Matt wraps up by providing a strategy of buying certain stocks that other investors are selling. There are strategies in this book that I would be uncomfortable with but there are other strategies that I am comfortable with. I’ll choose and carefully implement those comfortable strategies and, given my past profitable experiences with Matt’s books, I’ll make a few nickels. ...and be sure to view Matt's videos!
Jeffrey thinks that we are headed into a much tougher environment because “the Central Bank balance sheets will stop growing at the beginning of 2018, [and] the liquidity that’s helped drive the market is going to reverse. That is not favorable for risk markets.” As such, Jeffrey and his team at DoubleLine have been de-risking their portfolios and have cautioned investors to do the same.
Food programs are widely considered welfare to the people using them. In fact they are welfare to the food industry: it is a direct transfer of government (tax) bling to the pockets of General Mills, General Foods, Cargill, ADM, Monsanto, and the other Big Food/Big Pharma companies. It is tax bling to the grocers as well. These companies can keep marking up food for profit, squeezing those who pay money for it AND pay taxes so those who can’t afford the food can give Munchy Bucks to their local food vendor, and those dollars are credited to the food industry.
Peoples’ enthusiasm is understandable: From 1965 to 2017, Buffett’s Berkshire share achieved an annual average return of 20.9 percent (after tax), while the S&P 500 returned only 9.9 percent (before taxes). Had you invested in Berkshire in 1965, today you would be pleased to see a total return of 2,404,784 percent: an investment of USD 1,000 turned into more than USD 24 million (USD 24,048,480, to be exact). Read More
The chief bad idea in economics today is that most economists regard the discipline as a “pure science.” Economists have succumbed to what I call physics envy: They want their less-than-precise discipline to be considered a hard science, too. Unfortunately, economics—which concerns itself with unpredictable human behavior—is fundamentally incompatible with science.
The need to minimize the cost of distance has caused businesses and individuals to cluster around urban areas. This trend began during the Industrial Revolution 250 years ago, when millions of people moved to cities to work in factories. As Karen notes “Cities are dense urban hubs that minimize the cost of moving raw materials, labor and finished goods.”
For now the focus is on the US central bank. Investors will be looking for clues from its policy statement on Wednesday on when the balance-sheet run-off will start. After a soft patch in the economy earlier this year, Fed officials have hung on to their forecast for inflation to inch back up to their 2 per cent target, a goal they’ve missed for most of the last five years.
There are many people who don't agree with these bears. PIMCO analyst Joachim Fels, for one, finds a recession to be unlikely over the next 12 months, Barron's reports. However, he adds that a global recession within the next five years has a 70% probability, based on history. Barron's also notes that the forecasting prowess of Jim Rogers and Marc Faber is questionable. They have been wrongly bearish for years, and those who followed their advice in the recent past would have missed out on the bull market. Additionally, Barron's notes that Nobel Prize winning economist Robert Shiller of Yale University, whose models indicate an overpriced market, nonetheless believes that stocks may climb yet higher. (For more, see also: Stocks Could Rise 50%, Says Yale's Shiller.)
The Accountable Capitalism ActElizabeth Warren unveiled her new idea in an op-ed in the Wall Street Journal. It is her new bill, called the Accountable Capitalism Act. Of course, I have said this before, there is no truth in advertising when it comes to legislation. Whenever Congress passes a bill, the name of the bill is generally the opposite ...…
The truth is California has been living off phony home equity gains for 40 years. Nothing was ever produced to create this money, Nothing. But, they all spent this counterfit cash into the economy like it was real. California has flourished under this scheme of ever increasing Real Estate prices, but the free ride is over. Now they’ll have to learn how to actually produce something to have prosperity.
While many analysts focus on the company’s profits or net income, I like to pay attention to its free cash flow. Free cash flow is nothing more than subtracting capital expenditures from the company’s cash from operations. Because the gold mining industry is very capital intensive, the company’s free cash flow is a better indicator of financial health rather than the net income. Read More
Fortunately, we do not have to make predictions right now. We can hedge by shorting the weakest stocks and we can adjust to changes in the technical evidence as needed. This is what I prefer. At the bottom, we should see bullish divergences of new DJI lows: (1) volume should pick up on rallies instead of declines, (2) closes should be above openings and (3) price downtrend-lines will then be broken. How far down the DJI will be at this point, when our Peerless system start giving Buys, I cannot say. But that’s what I am waiting for. Whatever the news is then, the Peerless Divergence-Buys will probably be a good time to buy. At least, that is what history shows. We are not at that point now. So, we have to be very careful about believing the first bounce up right now.
Last Monday, Morgan Stanley made quite a splash with its contrarian call, when in the aftermath of a handful of poor tech results, most notably from Facebook which lost as much as $150BN in market cap due to slowing user growth, the bank's chief equity strategist Michael Wilson boldly predicted that "the selling has just begun and this correction will be biggest since the one we experienced in February."
For Smokey’s 40th anniversary in 1984, he was honored with a U.S. postage stamp that pictured a cub hanging onto a burned tree. It was illustrated by Rudy Wendelin. The commercial for his 50th anniversary portrayed woodland animals about to have a surprise birthday party for Smokey, with a cake with candles. When Smokey comes blindfolded, he smells smoke, not realizing it is birthday candles for his birthday. He uses his shovel to destroy the cake. When he takes off his blindfold, he sees that it was a birthday cake for him and apologizes. That same year, a poster of the bear with a cake full of extinguished candles was issued. It reads, 'Make Smokey's Birthday Wish Come True.'
To the surprise of many investors, the precious metals have rallied while the broader markets continue to sell-off. Currently, both gold and silver are solidly in the green while the major indexes were all the red following a huge sell-off yesterday. The Dow Jones Index has lost nearly 1,000 points in the past two days while the gold price is up nearly $25.
I’ve never liked talking about the future. The Q&A sessions always end up more like parlor games, where I’m asked to opine on the latest technology buzzwords as if they were ticker symbols for potential investments: blockchain, 3D printing, CRISPR. The audiences are rarely interested in learning about these technologies or their potential impacts beyond the binary choice of whether or not to invest in them. But money talks, so I took the gig. Read More
Brokers are the intermediate step between the underwriter and the actual bond holders, the cement-and-pavement financial professionals who answer orders for bond purchases. In most cases, underwriters will communicate and sell their maturities through multiple brokers. The broker seeks to distribute their bonds from the underwriter at a small percentage profit. Given the current legacy systems of the bond market, the distribution and sale of bonds is an exceptionally manual process requiring tremendous labor overhead and paperwork. As such, most municipal bond brokers only sell to high net worth individuals and organizations seeking to buy large quantities of bonds. Many of the people with direct ties to the impacted communities are therefore unable to contribute to their local governments, given little to no access to the profitable bond market.
Older investors who need cash returns like dividends should mostly sit tight, or shift asset mixes more toward U.S. stocks, since the U.S. has the world's most fundamentally strong and stable economy right now. U.S. company dividends are not in apparent danger. But older investors tempted to try to snag some Apple or Facebook on the cheap might want to wait for clearer signs of stabilization before trying to make an opportunity of the sell-off.
The NASDAQ 100 is surging today following the Democrats retaking the House. The reason for the rally? Just days ago, President Trump threatened to file anti-trust cases against the big tech companies and claim they were monopolies. Investors believe that the Democrats will neutralize that threat in the near-term. As tech surges higher, investors should be ready to pull the trigger on the short side when price hits $178.00. This is a major technical resistance and all technical chart…
I’m in the inflation camp. I think it’s coming. I have thought this for a while. People have looked all over for it as if looking for a lost sock or a hairpin: Where did it go? Where is that thing? But I do believe that the central bankers who have been kind of begging for inflation will be surprised at the generosity of the inflation gods over what they will ultimately be handed.