June 30, 2010 – Financial Reform has More Holes than Swiss Cheese!

Featured Trades: (FINANCIAL REFORM), (GS), (MS), (CBOE) Financials Select Sector SPDR ETF   1) Financial Reform has More Holes than Swiss Cheese. Whew! That was close! After 18 months of threats, saber rattling, and posturing about the demise of the competitiveness of the American banking system, we finally have a financial reform bill, although it has more … [Read more...]

June 30, 2010 – Trolling for Bargains in the Alternative Energy Space

Featured Trades: (PWER) 2) Trolling for Bargains in the Alternative Energy Space. I am always on the lookout for interesting alternative energy plays and stumbled across one the other day. Camarillo, CA based Power-One (PWER) is in one of the world's largest producers of power conversion and management devices, which are going to play a crucial role in the … [Read more...]

June 30, 2010 – Business is Booming at “Ruff Times”

Featured Trades: (HOWARD RUFF), (GLD), (SLV) SPDR Gold Shares Trust ETF 3)  Business is Booming at "Ruff Times". Following Howard Ruff for the last 33 years has always been eye opening, if not entertaining. The irascible Mormon is the publisher of Ruff Times (http://www.rufftimes.com / ), one of the oldest investment letters in the business, and one of the original … [Read more...]

June 30, 2010 – The Tea Leaves for China Look Ominous

Featured Trades: (FXI) iShares FTSE/Xinhua China 25 Index ETF 4) The Tea Leaves for China Look Ominous. The truly significant move in the capital markets last night was the atrocious performance of the Shanghai market (FXI), which plunged 3.4%. The index is now off more than 30% in the past 14 months, and 21% this quarter alone. Why should I care? Because the Chinese … [Read more...]

June 30, 2010 – Quote of the Day

'The housing sector is going back into the tank'”there is no doubt about it. Bank credit is in free fall,' said David Rosenberg, chief economist at Gluskin Sheff. … [Read more...]

June 29, 2010 – Why Silver Could Outshine Gold

Featured Trades: (SILVER), (SLV) iShares Silver Trust ETF   1) Why Silver Could Outshine Gold. The latest round of risk reduction by global hedge funds bashed silver (SLV), knocking $2.50 off of the $19.50 high seen in the heady days of May. Today we have made it back to $18.67, indicating that the white metal is holding up far better than it has in past sell … [Read more...]

June 29, 2010 – Your Power Future is in California

Featured Trades: (POWER IN CALIFORNIA), (EIX), (PGE) 2) Your Power Future is in California. California has a long history of making great leaps to push the envelope on standards, like seat belts, catalytic converters, emissions, and mileage, which are then adopted nationally and globally. It looks like it is going to be no different with electric power. In 2006 … [Read more...]

June 29, 2010 – Quote of the Day

'You always see people making ridiculous forecasts for Apple, and they always come true. They just constantly invent new customers with everything they come out with,' said Steve Grasso, head floor trader at Stuart Frankel. … [Read more...]

June 28, 2010 – A Grim Week for the “V” Crowd

Featured Trades: ('V' SHAPED RECOVERY), (YCS) Proshares Ultra Short Yen ETF 1) A Grim Week for the 'V' Crowd. Even the most optimistic permabulls have to be rethinking their scenario after looking at writing on the wall that is so obvious, they can see it with their own blinkered, tunnel visioned eyes. First, the nonfarm payroll delivered a paltry 41,000 private jobs … [Read more...]

June 28, 2010 – Australian Dollar Owners Make a Killing

Featured Trades: (FXA), (EWA) Currency Shares Australian Dollar Trust ETF Australia iShares ETF 2) Australian Dollar Owners Make a Killing. Those who took my advice to buy the Australian dollar at the $.80 handle (click here for the call) are no doubt now shopping for the next vintage Ferrari to add to their collection, a contender for next year's triple crown, or a … [Read more...]

June 28, 2010 – The Spotlight Moves to Petraeus

Featured Trades: (GENERAL PETRAEUS) 4) The Spotlight Moves to Petraeus. I have not been called a war criminal for at least 35 years. But that's what was screamed at me when I muscled my way through a crowd of chanting anti-war protesters on my way to a briefing from General David Petraeus, Commander of the US Central command. Every senior military officer in … [Read more...]

June 28, 2010 – Quote of the Day

'The banks are effectively zombie banks, because their consumer and commercial assets are not growing and their fee businesses are getting crushed. You're looking at very low return vehicles,' said Meredith Whitney, CEO of the Meredith Whitney Advisory Group. … [Read more...]

June 25, 2010 – The Only Certainty in Life: Taxes are Rising

Featured Trades: (TAXES INCREASES) 1) The Only Certainty in Life: Taxes are Rising. If you are looking for irrefutable proof that we're all screwed, take a look at the chart below from my friends at Clusterstock. It shows that $2,000 in tax increases will be needed per household to cover increased government social service spending by 2015. This figure then soars to a … [Read more...]

June 25, 2010 – A Peek at Your Energy Future

Featured Trades: (NEE), (PGE), (ALTERNATIVE ENERGY) 2) A Peek at Your Energy Future. If you want to get a preview of what an electric power utility of the future looks like, take a look at the old Florida Power and Light, which has reinvented itself as Nextera (NEE). Its shares have morphed from the high dividend kind that was the domain of widows and orphans, to a … [Read more...]

June 25, 2010 – Bring on the Housing Double Dip

Featured Trades: (RESIDENTIAL REAL ESTATE) 3) Bring on the Housing Double Dip. This is another 'I told you so' piece, so if that sort of thing annoys you, skip on. Yesterday's 300,000 figure for new home sales was absolutely diabolical, 26.8% lower than the 410,000 that was expected and the worst since 1963. This is down a flabbergasting 78% from the … [Read more...]

June 25, 2010 – The Ultimate Book on the Middle East

Featured Trades: (MIDDLE EAST BOOK REVIEW) 4) The Ultimate Book on the Middle East. I just finished reading Power, Faith, and Fantasy: America in the Middle East from 1776 to the Present by Michael B. Oren, an encyclopedic recent history of the Middle East. As an investor, you are going to have to be knowledgeable about this hot spot, because headlines from there … [Read more...]

June 25, 2010 – Quote of the Day

'There is a massive, rotting pool of mortgages on bank balance sheets.'¦There is no doubt there is going to be a double dip in housing,' said Meredith Whitney, CEO of the Meredith Whitney Advisory Group. … [Read more...]

June 24, 2010 – Going Back into the Ags

Featured Trades: (SOYBEANS), (SOYBEAN MEAL), Teucrium Agricultural Trust Corn Fund Teucrium Agricultural Trust Soybean Fund Teucrium Agricultural Trust Wheat Fund Teucrium Agricultural Trust Sugar Fund 1) Going Back into the Ags. OK, I can't stand it anymore. After staying out of the agricultural sector for the past six months I'm going back in. I'm not betting the … [Read more...]

June 24, 2010 – Thank Goodness I don’t live in Sweden

Featured Trades: (GLOBAL TAX RATES) 2) Thank Goodness I don't live in Sweden! I pulled the chart below off of Paul Kedrosky's ever insightful website, Infectious Greed, showing world tax rates as a percentage of GDP for the past 40 years. Sweden suffers the world's heaviest tax burden at 51%, compared to only 27% in the US. Surprise! Surprise! The US … [Read more...]

June 24, 2010 – Pushing Electric Cars on Capitol Hill

Featured Trades: (ELECTRIC CARS), (NISSAN LEAF) 3) Pushing Electric Cars on Capitol Hill. FedEx founder and CEO Fred Smith, an ex Navy pilot who I admire enormously, was on Capitol Hill yesterday lobbying for electric cars. In 2009, the US spent $188 billion on crude oil imports, far and away our largest, and 70% went to transportation. If we devote $100 billion to … [Read more...]

June 24, 2010 – New Ag ETF’s to Hit the Market

Featured Trades: (CORN), (WEAT), (SOYB), (CANE), (UNG), (USO) Teucrium Agricultural Trust Corn Fund Teucrium Agricultural Trust Soybean Fund Teucrium Agricultural Trust Wheat Fund Teucrium Agricultural Trust Sugar Fund 4) New Ag ETF's to Hit the Market. Teucrium Trading LLC has at long last plugged a gaping hole in the ETF line up by announcing the launch of three … [Read more...]

June 24, 2010 – Quote of the Day

'The really big problem here is that we have 10% unemployment now. If you drop it 1/2% a year for ten years, we're not going to reach full employment before we reach the next recession,' said Lachmann Achutman, managing director of the Economic Cycle Research Institute. … [Read more...]

June 23, 2010 – The Bond Market is Blind to Risk

Featured Trades: (TREASURY BONDS), (TBT) ProShares Ultra Short Lehman 20 Plus TBT 1) The Bond Market is Blind to Risk. After promising to deliver you a nicely marbled, medium rare, prime rib, I am the first to admit when I actual come up with a piece of tasteless, salt water injected Costco turkey. I am talking about my suggestion that Treasury bond prices would fall … [Read more...]

June 23, 2010 – The Value Player’s Take on BP

Featured Trades: (MDR), (BP), (RIG), (HAL), (GZPFY.PK), (XOM), (RDS/A) 2) The Value Player's Take on BP. OK, I promise I won't talk about BP again until the stock breaks one way or another. But no sooner do I put out the call to buy the pariah stock at $29, than I hear Whitney Tilson of T2 Partners, one of the giants of the value corner in the hedge fund … [Read more...]

June 23, 2010 – Looking for Energy Babies Thrown Out With the Bathwater

Featured Trades: (MDR), (BP), (RIG), (HAL) 3) Looking for Energy Babies Thrown Out With the Bathwater. The great game among hedge funds now is to find the babies that have been thrown out with the bathwater because of the Gulf oil spill disaster. The halving of the share Price of BP (BP), Transocean (RIG), and Halliburton (HAL), is totally understandable because … [Read more...]

June 23, 2010 – Watch Out for Those Dinosaur Turds

Featured Trades: (DINOSAUR MARKET) 4) Watch Out for Those Dinosaur Turds. The dinosaur bone market has crunched. Once a favorite collectable of high flying hedge fund managers, the prices of everything from tyrannosaurus rex to brontosaurus fossils have skidded. A recent auction of a triceratops skeleton failed to reach its minimum bid of $1 million. Even prices for … [Read more...]

June 23, 2010 – Quote of the Day

'It's time to go back to the old ways. This world of transaction based banking, where algorithms trade umpteen shares in microseconds, would have appalled (British banker from the thirties to the seventies), Sigmund Warburg. We ought to go back to relationship based banking,' said The Ascent of Money author and Harvard business school professor, Niall Ferguson. … [Read more...]

June 22, 2010 – Oil Patch Gossip About BP

  Featured Trades: (BP), (CHK), (DVN)   1) Oil Patch Gossip About BP. Over the years, I have invested so much time wildcatting in the oil patch that I will never be wanting for great steaks at Nick & Sam's in Dallas, skyboxes at Cowboys games, and personally signed 8 X 10 glossy photographs of George W. Bush. So to get the skinny on the BP mess, I … [Read more...]

June 22, 2010 – Natural Gas Indigestion

Featured Trades: (NATURAL GAS) 2) Natural Gas Indigestion. I always thought that a great strategy for a new hedge fund would be to only buy positions from existing hedge funds that were blowing up. That fund would buy securities subject to margin calls and distressed liquidations, which are by definition at six standard deviation extremes. It would not trade very … [Read more...]

June 22, 2010 – Buy Those Who Sell Shovels, Not Miners

Featured Trades: (WFC), (UNP), (ISE), (ICE) 3) Buy Those Who Sell Shovels, Not Miners. A careful study of the history of California's 1849 gold rush shows that while almost all the miners went broke, those who provided the picks, shovels, transportation, and banking services made the real money. Those fortunes became so vast, they live on today in names like … [Read more...]

June 22, 2010 – What The Yuan Realignment Means For You

Featured Trades:  (CHINESE YUAN FOLLOW UP), (BTU), (FCX), (X), (FXI), (YCS), (YEN) iShares FTSE/Xinhua 25 China ETF ProShares Ultra Short Yen ETF 4) What The Yuan Realignment Means For You. Since it's rare that we get a realignment as significant as the revaluation of the Chinese Yuan, I thought it would be interesting to review the global market response. The one … [Read more...]

June 22, 2010 – Quote of the Day

'$200 down is going to hit before $50 up,' said Tom O'Brien, Editor of the Gold Report, warning about how much scrap the gold for cash business is generating. … [Read more...]

June 21, 2010 – Special Chinese Yuan Revaluation Issue

Featured Trades: (CHINESE YUAN) Wisdom Tree Dreyfus Chinese Yuan Fund ETF iShares FTSE/Xinhua China 25 ETF   1) Special Chinese Yuan Revaluation Issue. Specifically, China has announced that it will 'further reform the RMB exchange rate regime and enhance RMB exchange rate flexibility.' To me, this is Chinese for 'let it go up.' If you think you can get more out of … [Read more...]

June 21, 2010 – Here Comes the Double Dip in Housing

Featured Trades: (RESIDENTIAL REAL ESTATE), (DHI), (PHM), (LEN)   2) Here Comes the Double Dip in Housing. The great thing about the residential real estate market is that it floods us with tons of hard data. The bad news is that all of these tea leaves have again started pointing to a turn for the worse. The monthly index published by the National Association … [Read more...]

June 21, 2010 – “Waltzing Matilda” Hits the Top Ten

Featured Trades: (FXA), (FXC), (AUSTRALIAN DOLLAR), (AUSIE/YEN CROSS), (AUSIE/EURO CROSS) Currency Shares Australian Dollar Trust ETF Currency Shares Canadian Dollar Trust ETF 3) 'Waltzing Matilda' Hits the Top Ten. The Russian Central bank today said it is moving a portion of its reserves into Australian (FXA) and Canadian dollars (FXC). They join a procession … [Read more...]

June 21, 2010 – Time to Cash in on the RIG Bounce?

Featured Trades: (TRANSOCEAN), (RIG) 4) Time to Cash in on the RIG Bounce? Those who took my advice to buy Transocean (RIG) at $52 can now get out with a 5% profit. The addition of the Swiss based company's shares to that country's stock index created a temporary boost as funds loaded up to track their benchmark. You didn't know that denizens of the … [Read more...]

June 18, 2010 – The Summer Rally Is Here

Featured Trades: (SPX)   1) The Summer Rally is Here. Now that we are above the 200 day moving average, it looks like our summer rally has begun. But don't expect too much. After delivering a neat triple bottom at 1,040, the S&P 500 has been grinding up in a low volume rally, complaining and protesting every step of the way. I warned you that something … [Read more...]

June 18, 2010 – How US Job Losses Will End

Featured Trades: (VNM), (FXI), (PIN), (EWY) 2) How US Job Losses Will End. I am not in the habit of regularly lifting data out of the Wall Street Journal, but even a blind squirrel occasionally finds an acorn. I was tempted by the comparative Asian wage data they published yesterday, which I just have to get into my data base. Textile workers earn $2.99 an hour in … [Read more...]

June 18, 2010 – Please Use My Free Date Base Search

3) Please Use My Free Data Base Search. The original purpose of this letter was to build a data base of ideas to draw on in the management of my hedge fund. When a certain trade comes into play, I merely type in the symbol, name, currency, or commodity into the search box, and the entire fundamental argument in favor of that position pops up. You can do the same. Just type … [Read more...]

June 18, 2010 – The ETF Trend Following Playbook

Featured Trades: The ETF Trend Following Playbook 4) The ETF Trend Following Playbook. Turn over any rock these days, and you'll find Tom Lydon of ETF Trends (click here at http://www.etftrends.com/ ) extolling the virtues of exchange traded funds (ETF's) and exchange traded notes (ETN's). So I thought it would be timely to read his book on the subject, The ETF Trend … [Read more...]

June 18, 2010 – Quote of the Day

'People are starting to feel better here. They don't feel like they have to have Dr. Kevorkian on speed dial anymore,' said Scott Nation, president of Nation Shares. … [Read more...]

June 17, 2010 – Is It Time To Buy British Petroleum?

Featured Trades: (BP), (RIG)   1) Is it Time to Buy British Petroleum? The daily spill estimate has been ratcheted up from 1,000 barrels a day to 35,000, and now 60,000! Fitch downgraded its debt a stunning six notches from AA to BBB. Obama's oval office salvo was directly aimed at the firm.  $20 billion has been forced into an escrow account to cover damages. … [Read more...]

June 17, 2010 – Here Comes the “Bathtub” Economy

Featured Trades: (THE ECONOMY) 2) Here Comes the 'Bathtub' Economy. Goldman Sachs' chief US economist, Jan Hatzius, can articulate my own view of the economy better than I can, so I will just repeat what he said yesterday. The boost the economy received from an inventory rebuild is now over, and the best we can expect is an anemic H2 GDP growth rate of only 1.5%. If … [Read more...]

June 17, 2010 – Learning to Love Hedge Funds

Featured Trades: (HEDGE FUNDS) 3) Learning to Love Hedge Funds. The Wall Street Journal has put together the best history of hedge funds I have found so far. They start with the legendary Fortune Magazine editor, Winslow Jones, who created the first fund out of a shabby office on Broadway in 1948, and generated monster returns over the next 20 years. I learned for … [Read more...]

June 17, 2010 – Quote of the Day

'You don't want to give the manager of a nuclear power plant an incentive bonus,' said Nassim Taleb, author of the highly controversial book, The Black Swan. … [Read more...]

June 16, 2010 – A Poolside Report on the Las Vegas City Center

  Featured Trades: (LAS VEGAS CITY CENTER), (MGM)   1) A Poolside Report on City Center. I write this to you from my poolside cabana at the Aria at City Center, the newest and hottest hotel in Las Vegas, against a background of blaring rock music and helicopters buzzing overhead every five minutes. It's amazing what passes for a swim suit these days, and … [Read more...]

June 16, 2010 – Grains See the Light at the End of the Tunnel

Featured Trades: (CORN) Teucrium Agricultural Trust Corn Fund 2) Grains See the Light at the End of the Tunnel. I am a huge long term bull on the grains, but abandoned my trading call in January when the USDA published a spectacularly bullish forecast for most crops for 2010. Not only were plantings up, so were yields per bushel. Since then, the ags have been in a … [Read more...]

June 16, 2010 – Where is the Gulf Oil Going Next?

Featured Trades: (BP), (RIG) 3) Where is the Gulf Oil Going Next? The National Center for Atmospheric Research has posted a nifty video on their website projecting the route of the British Petroleum's (BP) oil spill for the next six months. The good news: much of the oil will miss the Gulf Coast. The bad news: it will get dumped on the east coast instead, no … [Read more...]

June 16, 2010 – Coffee Perks Up

Featured Trades:  (VNM), (IDX), (JO) iPath Dow Jones-AJG Coffee Total Return Sub-Index ETN 4) Coffee Perks Up.  Coffee prices rocketed to a seven month high last week after the International Coffee Organization published a report predicting a serious decline in global supplies this year. Exports from Vietnam (VNM), the world's largest supplier of low grade coffee, … [Read more...]

June 15, 2010 – The Mad Hedge Fund Trader Interviews Vivian Lewis of Global Investing on Hedge Fund Radio

1) Vivian Lewis of Global Investing Gives Her Take. Vivian Lewis says that Poland is attractive, gold (GLD) is looking toppy, and there are great long term opportunities in Thailand. She should know. Vivian is the publisher of Global Investing, one of the oldest international investing newsletters in the business. Thailand is a manufacturing and export powerhouse where … [Read more...]

June 15, 2010 – Is This Currency Making a Top?

Featured Trades: (YCS) 2) Is This Currency Making a Top? As I am a fundamental guy, I don't normally pay attention to technical analysis mumbo jumbo, except when the conclusions are screamingly obvious. I may be wrong, but isn't there a head and shoulder's top setting up of the yen chart below? If Charles Nenner is right, and we do get a summer rally (click here for … [Read more...]

June 15, 2010 – A Humorous and Worthwhile Read

Featured Trades: (TOM STANDAGE) 3) A Humorous and Worthwhile Read. I have just finished leisurely reading Tom Standage's book The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century On-Line Pioneers. Standage discusses the creation and development of the telegraph system and how it revolutionized communication in the nineteenth … [Read more...]

June 11, 2010 – Don’t Get Sucked Into the Bond Bubble Either

Featured Trades: (SHY), (TUZ), (TBT) PIMCO 1-3 Year U.S. Treasury Index Fund ETF ProShares Ultra Short Lehman 20+ Year Treasury ETF 4) Don't Get Sucked Into the Bond Bubble Either. I hate to see retail investors buy bubble tops because they work so hard for their money, it's a pity to see it all disappear like a puff of smoke. That is exactly what is … [Read more...]

June 14, 2010 – 2010 Asset Allocation Review

I am feeling pretty good about my New Year call, which I sent to you on January 4, so I am sending them to you again. As long as you kept trailing stops on you longs, you did great. My controversial call on the economy is proving coming to fruition. The big miss was in the 30 year Treasury bond, which went up instead of down. But I still made good money on the TBT before we … [Read more...]

June 11, 2010 – Hedge Funds Crash in May

Featured Trades: Technology Select Sector SPDR ETF PowerShares QQQ Trust ETF   1) Hedge Funds Crash in May. Hedge funds suffered a disastrous month in May, showing an average 3% decline in net asset values, and some funds like Eddie Lampert's ESL Investments got clocked for a 15% loss. If you had to describe the global hedge fund position on May 1, it was long … [Read more...]

June 11, 2010 – Look at Gold in Yen

Featured Trades: (GOLD IN EUROS), (GOLD IN YEN) 2) Look at Gold in Yen. This is one of those 'I told you so' pieces, so if that sort of thing turns you off, read no further.  On May 26, I recommended that you buy gold against Euros at ¬970 (click here for the call ). Yesterday it hit ¬1,035. Since I have been flooded with requests to explain how to put this on, I'll … [Read more...]

June 11, 2010 – Don’t Get Sucked Into Natural Gas

Featured Trades: (UNG), (NATURAL GAS) 3) Don't Get Sucked Into Natural Gas. When natural gas was trading at $6 at the beginning of the year, I warned readers to stay away because it would take years to discount the discovery of a new 100 year supply through the new 'fracting' technology (click here for the call). Gas then launched into an agonizing, three month … [Read more...]

June 10, 2010 – Where to Play the Dead Cat Bounce in Europe

Featured Trades: (PLND), (EPOL) Market Vectors Poland ETF iShares MSCI Poland Investable Market ETF 2) Where to Play the Dead Cat Bounce in Europe. The currency is in free fall, and the continent is about to enter a new dark age, as enforced deleveraging brings economic collapse and widespread civil unrest. To me, this all means it's time to start sifting … [Read more...]

June 10, 2010 – Gold Crucifies Doubters

Featured Trades: (GLD), (SLV), (PPLT), (PALL) SPDR Gold Trust Shares ETF iShares Silver Trust ETF ETFS Physical Platinum Shares ETF ETFS Physical Palladium Shares ETF 3) Gold Crucifies Doubters. Gold (GLD) blasted through to an all time high last night, doubters and naysayers carping all the way up that it was overpriced. The white metals of silver (SLV), platinum … [Read more...]

June 10, 2010 – Fears of Rare Earth Shortages Rise

Featured Trades: (AVA.TO) 4) Fears of Rare Earth Shortages Rise. Fears that Chinese hoarding of rare earths would lead to global shortages hit the market this week. The government has stopped issuing licenses for new exploration until mid 2011. It has also capped production at 892,000 tonnes for this year. This comes in the wake of efforts to shut down widespread … [Read more...]

June 10, 2010 – Quote of the Day

'We are still in the gravitational pull of the Great Recession. I would have to put the likelihood of a double dip recession now up to 50%,' said my old UC Berkeley economics professor, Robert Reich. … [Read more...]

June 9, 2010 – New Website Launch

Featured Trades: (NEW WEBSITE LAUNCH)   1) With much fanfare and celebration, I am happy to announce my new state of the art website for www.madhedgefundtrader.com . The ground up rebuild offers vastly enhanced functionality and ease of use. For a start, the old website, Hedge Fund Radio, and the blog have been consolidated into a single site. There is a … [Read more...]

June 9, 2010 – Gotta Love Those Lean Hogs

2) Gotta Love Those Lean Hogs! Those hapless investors who ignored my advice to sell in May and go away certainly paid the price. Take a look at the chart below of year to date asset class performance showing the shakeup that spring wrought in all its gory detail. The shift last month from green to red columns is more than conspicuous. Those with a sweet tooth for sugar … [Read more...]

June 9, 2010 – Short Sellers Turn an Instant Profit in For-Profit Education

Featured Trades: (APOL), (COCO), (DV), (CECO), (BPI), (EDMC), (APEI), (WPO), (CPLA), (ESI)   3) Short Sellers Turn an Instant Profit in For-Profit Education. One of the great things about the Internet is that when you put something out there, often what comes back at you is ten times better. Last week I posted a piece on how hedge funds were zeroing in on … [Read more...]

June 9, 2010 – Only Buy Companies You Hate

Featured Trades: (BP), (GS), (C), (PFE), (MO), (AAPL) 4) Only Buy Companies You Hate. The Wall Street Journal published one of the funniest investment strategy pieces I have ever read. Dilbert cartoonist Scott Adams argues that you should invest in companies you hate because only the most unprincipled and rapacious firms make the greatest profits. Moral bankruptcy is a … [Read more...]

June 9, 2010 – Quote of the Day

'Technical analysis'¦.has exactly the same scientific validity as pretending you are a witch and forecasting market moves from chicken droppings,' said humorist, Scott Adams, of Dilbert fame. … [Read more...]

June 7, 2010 – Technical Analyst to the Stars, Charles Nenner, Says the Market Won’t Crash Until the Fall on Hedge Fund Radio

  Charles Nenner, technical analyst to the stars, says it is safe to buy the S&P 500 (SPY) this week for a trade because the big crash isn't coming until the fall. You should use the current bout of weakness in the Australian dollar (FXA) to load the boat, probably sometime in July. Oh, and while you're at it, short gold (GLD) as soon as it dips below … [Read more...]

June 7, 2010 – Quote of the Day 1

''Free choice is not relevant in financial markets because there are too many players. A stock with a million holders is much more predictable than one with five,' said Charles Nenner, of Charles Nenner Research in Amsterdam. … [Read more...]

June 7, 2010 – Where's the Beef?

Featured Trades: (MAY NONFARM PAYROLL) 1) Where's the Beef? That was the thorny question wracking the brains of investors Friday morning on the heels of the hugely disappointing nonfarm payroll report showing that 430,000 jobs were gained in May. Never mind that this was the best report in several years. The problem arises when you dig deeper and find that 411,000 … [Read more...]

June 7, 2010 – My Favorite Secret Economic Indicator

Featured Trades: (U-HAUL) 2) My Favorite Secret Economic Indicator. It is the end of the school year at the University of California at Berkeley, and the unenviable task of moving my son, a junior, out of his hovel for the summer fell to me. When I arrived, I was stunned to find nothing less than a war zone. Both sides of every street were lined with mountains of … [Read more...]

June 7, 2010 – The Worst Trade in History

Featured Trades: (THE WORST TRADE IN HISTORY), (AAPL) 4) The Worst Trade in History. Say you owned 10% of Apple (AAPL) and you sold it for $800 in 1976. What would that stake be worth today? Try $22 billion. That is the harsh reality that Ron Wayne, 76, faces every morning when he wakes up, one of the three original founders of the consumer electronics giant. Ron first … [Read more...]

June 4, 2010 – British Petroleum: The Nuclear Option

Featured Trades: (BP), (THE NUCLEAR OPTION)   1) British Petroleum: The Nuclear Option. I have never been able to use my talents both as a securities analyst and a nuclear weapons designer simultaneously, but British Petroleum (BP) has at last enabled me to rise to the call. Back before personal computers, the Internet, and hedge funds were invented, most … [Read more...]

June 4, 2010 – The May ETF Score Card

Featured Trades: (EDV), (SDS), (UUP), (TBT) Canada iShares Trust ETF Currency Shares Canadian Dollar Trust ETF iPath S&P 500 VIX Short-Term Futures ETN ProShares Ultra Short S&P 500 ETF Vanguard Extended Duration ETF PowerShares DB US Dollar Index Bullish Fund 2) The May ETF Score Card. I always find it useful to review the best and worst performing ETF's … [Read more...]

June 4, 2010 – The Loonie Takes Flight On Bank of Canada Move

Featured Trades: (CANADA), (FXC), (EWC) Canada iShares Trust ETF Currency Shares Canadian Dollar Trust ETF 3) The Loonie Takes Flight On Bank of Canada Move. The Bank of Canada finally raised interest rates yesterday, the first G-7 country to do so, taking the overnight rate up 0.25% to 0.5%.  The central bank said it took the move to cool off a white hot real … [Read more...]

June 4, 2010 – The Best Financial Book Ever

Featured Trades: (THE ASCENT OF MONEY) 4) The Best Financial Book Ever. I have just finished reading the best financial book ever, and I have read most of them. It is The Ascent of Money: A Financial History of the World by Harvard professor Niall Ferguson. It gives you a great explanation of how the broad sweep of history delivered us to the doorstep of today's … [Read more...]

June 3, 2010 – The Yen Short is Back in Play

Featured Trades: (YCS) ProShares Ultra Short Yen ETF 1) The Yen Short is Back in Play. The surprise resignation last night of Japanese Prime Minister, Yukio Hatoyama, has suddenly thrust my yen short back into the limelight. Coming in on a landslide only eight months ago, the hapless leader of the left of center Democratic Party of Japan (DPJ) couldn't help … [Read more...]

June 3, 2010 – Apple’s Next Stop: $1,000

Featured Trades: (AAPL), (MSFT) 2) Apple's Next Stop: $1,000. When I took a young, cocky, long haired, Levis wearing Steve Jobs around to meet Morgan Stanley's institutional investors to pitch an Apple share offering 28 years ago, I vowed never to buy anything from the man. He was such a great salesman, and possessed such a messianic devotion to his … [Read more...]

June 3, 2010 – The New California Gold Rush

Featured Trades: (GOLD), (GLD) Spider Gold Trust Shares ETF 3) The New California Gold Rush. The gold rush is back on in California. On my way back from Lake Tahoe recently, I saw that every bend of the American river was dotted with hopeful amateur miners, looking to make a windfall fortune. Weekend hobbyists were there panning away from the banks, while the … [Read more...]

June 3, 2010 – Quote of the Day

'80% of the world's GDP growth last year came from stimulus. It's not real. Our current debt/GDP is 360%, we have $55 trillion in total debt, and $108 trillion in unfunded liabilities. I think not only are we are going to hit the old low, but there is a pretty decent chance we are going to make a new low,' said Ron Carson of Carson Wealth Management. … [Read more...]

June 2, 2010 – Hedge Funds Are Now Targeting For-Profit Education

Featured Trades: (APOL), (CPLA), (DV) 1) Hedge Funds Are Now Targeting For-Profit Education. Hedge funds have been circling for new carrion to devour in the next economic slowdown and have found a big fat target in the for-profit educational sector. The industry is ripe for the taking. For two decades, for-profit schools have lured gullible students with inflated … [Read more...]

June 2, 2010 – Another “W” Warning

Featured Trades: (FXI) ISHARES FTSE/XINHUA CHINA 25 FUND 2) Another 'W' Warning. China traders (FXI) were sucker punched this morning by the shocking decline in the country's May purchasing managers' index, which plunged from 55.7 to 53.9. That leaves the coincident indicator teetering above the 50.0 boom bust level. The news threw a bucket of … [Read more...]

June 2, 2010 – Here Come the Water Wars

Featured Trades: (WATER), (PHO), (ITT), (DHR), (NLC), (VE) POWERSHARES WATER RESOURCES PORTFOLIO 3) Here Come the Water Wars. Long time readers of this letter know well that I have been a big fan of the water play (click here for my last report). The world is rapidly running out of fresh water, possible within five years. The issue is so serious that both the Defense … [Read more...]

June 2, 2010 – Watch the “Grapes of Wrath” Replay in California

Featured Trades: (CHERRIES) 4) Watch the 'Grapes of Wrath' Replay in California. It's another sign of the times when the weekend fruit picker population is doubled by people hard hit by the economy, looking to save money on food costs. After driving through miles of undulating brown hills studded with oak trees, passing mile upon mile of horse ranches, rusted out cars, … [Read more...]

June 2, 2010 – Quote of the Day

'The irony is that every government is trying to regulate the price of energy, but down the line, the price of energy is going to regulate these governments,' said Mark Fisher of MF Asset Management. … [Read more...]

June 1, 2010 – Bring on the Right Shoulder

  (SPECIAL MARKET TIMING ISSUE) Featured Trades: (GS), (AAPL) 1) Bring on the Right Shoulder. That is the refrain I am hearing from a number of technical analysts this morning. They believe that last week's dead cat bounce in US stocks was nothing more than short covering ahead of the three day Memorial Day weekend and month end window dressing.  The surge is … [Read more...]

June 1, 2010 – How Overvalued Are Stocks?

(SPECIAL MARKET TIMING ISSUE) Featured Trades: (DOW) 2) How Overvalued Are Stocks? The chart below was passed on to me by a reader showing an inflation adjusted Dow since 1900. Bulls may be forgiven for getting that kicked in the scrotum feeling because it shows the index is 3,000 (43%) points higher than trend. I can buy the argument that a surge in stock … [Read more...]

June 1, 2010 – Pssst! Hey! Check Out…

(SPECIAL MARKET TIMING ISSUE) Featured Trades: (RHODIUM), (AAUKY.PK) , (PAL), (SWC) 3) Pssst! Hey! Check Out '¦.When I was at the Hard Asset Investment Conference in New York a few weeks ago, every hour someone would stop by my table, mention the word 'rhodium', and walk away. My interest piqued, I decided to look into this mysterious metal. Rhodium (Rh) is in fact … [Read more...]

June 1, 2010 – Refrain: I’d Rather Have a Poke in the Eye with a Sharp Stick than Buy Equities

(SPECIAL MARKET TIMING ISSUE) Featured Trades: (EWM), (EWP), (EEM), (EWY), (EWZ), (FXI) ISHARES MSCI MALAYSIA INDEX ISHARES MSCI SPAIN INDEX ISHARES FTSE/XINHUA CHINA 25 INDEX ISHARES MSCI BRAZIL INDEX ISHARES MSCI SOUTH KOREA INDEX 4) Refrain: I'd Rather Have a Poke in the Eye with a Sharp Stick than Buy Equities. I'm feeling pretty good about my January 4 … [Read more...]