December 31, 2010 – The ‘Frontier’ Markets are Beckoning

Featured Trades: (FRONTIER MARKETS), (EEM) 3) The 'Frontier' Markets are Beckoning. A quick look at the world's top performing stock markets during the first half of 2010 will not exactly ring bells for many investors. Bangladesh came in tops with a 40.7% gain, followed by Sri Lanka (34.6%), and Venezuela (18%). You have to get down to Chile, number four, to find an … [Read more...]

December 31, 2010 – The Ultra Bull Argument for Gold

Featured Trades: (THE ULTRA BULL CASE FOR GOLD), (GLD) 4) The Ultra Bull Argument for Gold. I am constantly barraged with emails from gold bugs who passionately argue that their beloved metal is trading at a tiny fraction of its true value, and that the barbaric relic is really worth $5,000, $10,000, or even $50,000 an ounce (GLD). They claim the move in the yellow … [Read more...]

December 30, 2010 – Lunch With the Treasury Secretary

Featured Trades: (LUNCH WITH THE TREASURY SECRETARY)   1) Lunch With the Treasury Secretary. When I wake up at 4:30 am each morning to check the overnight markets and review the opening salvo of incoming emails, I often have trouble focusing in my groggy state. So I had to blink twice when the first message in my inbox politely inquired if I had time to meet the … [Read more...]

December 30, 2010 – Apple’s next stop: $1,000

Featured Trades: (AAPL), (STEVE JOBS) 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 product, the … [Read more...]

December 22, 2010 – Notice to Military Subscribers

Featured Trades: (NOTICE TO MILITARY SUBSCRIBERS) 2) Notice to Military Subscribers. To the dozens of subscribers in Iraq, Afghanistan, and the surrounding ships at sea, thank you for your service! I think it is very wise to use your free time to read my letter and learn about financial markets in preparation for an entry into the financial services when you cash … [Read more...]

December 22, 2010 – A Nice Update on Cisco Systems

Featured Trades: (CISCO SYSTEMS), (CSCO) 3) A Nice Update on Cisco Systems. For those of you who caught my trade alert to buy the Cisco Systems (CSCO) $20-$22 bull call spread last week and where hoping to get it at lower prices can forget about it. I spoke to an analyst today whose outlook for the networking giant was even more optimistic than mine. The company has … [Read more...]

December 22, 2010 – Last Chance to Join the December 28 Chicago Strategy Luncheon!

Featured Trades: (CHICAGO STRATEGY LUNCHEON) 4) Last Chance to Join the December 28 Chicago Strategy Luncheon! Come join me for lunch at the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Chicago on Tuesday, December 28, 2010. A three course lunch will be followed by a 45 minute PowerPoint presentation and a 30 minute question and answer … [Read more...]

December 21, 2010 – Why We Need Six New Saudi Arabia’s

Featured Trades: (THE ENERGY CRUNCH)   1) Why We Need Six New Saudi Arabia's. I recently spent an evening with Ambassador Richard Jones, the Deputy Executive Director of the International Energy Agency in Paris, who had some eye opening things to say about the energy space. The IEA was first set up as a counterweight to OPEC during the oil crisis in 1974, and has … [Read more...]

December 21, 2010 – Watch Out for the Chihuahua Glut

Featured Trades: (THE CHIHUAHUA GLUT) 3) Watch Out for the Chihuahua Glut. Yesterday, I wrote about the Nevadan wrinkle in the housing crisis where distressed homeowners are letting their horses go wild to make their mortgage payment. Now neighboring California is facing a Chihuahua glut, where evicted homeowners are handing over their pets to animal shelters. The … [Read more...]

December 20, 2010 – Kiss That Union Job Goodbye

Featured Trades: (WHERE HAVE ALL THE JOBS GONE?)   1) Kiss That Union Job Goodbye. Those of you counting on getting your old union assembly line job back in Detroit can forget it. The recent eight year forecast published by the Bureau of Labor Statistics shows that 4.19 million jobs will be gained in the US in professional and business services, followed by 4 … [Read more...]

December 20, 2010 – China Steps Up Its Nuclear Program

Featured Trades: (CHINESE NUCLEAR PROGRAM) 2) China Steps Up Its Nuclear Program. The Middle Kingdom currently has 12 operational plants generating 12 gigawatts accounting for 2.3% of the country's power. Another 23 are currently under construction. It plans to add ten a year for the next decade, taking them up to 70 Gigawatts by 2020, and a staggering 400 gigawatts by … [Read more...]

December 20, 2010 – Why don’t We Try Chinese Style Securities Regulation?

Featured Trades: (INCARCERATION RATES) 3) Why don't we try Chinese style securities regulation? Former stock trader, Yang Yanming, was recently executed by lethal injection for embezzling $9.52 million from Galaxy Securities during 1997 to 2003. The move was part of a broader effort by the Mandarins in Beijing to crack down on rampant corruption in the securities … [Read more...]

December 20, 2010 – The Bull Market in Mustangs

Featured Trades: (MUSTANGS) 4) The Bull Market in Mustangs. The Western US has found a new wrinkle in the housing collapse, where homeowners are desperately struggling to cut living costs to meet the next doubling of their adjustable rate mortgage payments on their underwater houses. Raising horses can cost more than children, so Nevadans are turning them loose to … [Read more...]

December 17, 2010 – If Demographics is Destiny, Then America’s Future Sucks

Featured Trades: (SPECIAL DEMOGRAPHIC ISSUE)   1) If Demographics is Destiny, Then America's Future Sucks. Desperate homeowners counting on a "V" shaped recovery in residential real estate prices to bail them out better first take a close look at global demographic data, which tells us there will be no recovery at all. I have been using the US Census Bureau's … [Read more...]

December 17, 2010 – Why I’m Avoiding Japan Like the Plague

Featured Trades: (SPY), (EWJ) Japan iShares ETF 2) Why I'm Avoiding Japan Like the Plague. Now look at the world's worst population pyramid, that for Japan (EWJ). These three graphs show that a nearly perfect pyramid drove a miracle stock market during the fifties and sixties which I remember well, when Japan had your textbook high growth emerging market economy. That … [Read more...]

December 16, 2010 – The January 7, 2011 Las Vegas Global Strategy Luncheon

Featured Trades: (LAS VEGAS GLOBAL STRATEGY LUNCHEON)   1) The January 7, 2011 Las Vegas Global Strategy Luncheon. Come join me for lunch for the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Sin City on Friday, January 7, 2011. A three course lunch will be followed by a 45 minute PowerPoint presentation and a 30 minute question … [Read more...]

December 16, 2010 – Panic Buying Hits the (TBT)

Featured Trades: (PANIC BUYING OF THE TBT), (TBT) 2) Panic Buying Hits the (TBT). Buy the rumor, sell the news. That is one of the oldest adages one hears on trading desks, and it was never more true than today. Yesterday we learned that the ratings agency, Moody's, is considering a downgrade of US government debt in the wake of the tax compromise, as it should, … [Read more...]

December 16, 2010 – Be Careful.Your PC is Watching.

Featured Trades: (BEHAVIORAL TARGETING) 3) Be Careful .Your PC is Watching. Hey! You there, staring at this monitor. This is your PC talking to you. No, not you over there standing in the background. I'm talking to the guy sitting in front of me poking at my keys. Ouch! That one hurt! So you thought no one was watching, did you? Let me straighten you out. About a … [Read more...]

December 14, 2010 – The Upgrade Fever Pandemic

Featured Trades: (ECONOMY UPGRADE FEVER), ($SSEC), (SSO), (X), (CU), (COPPER) 1) The Upgrade Fever Pandemic. I knew it, I knew it, I knew it. As soon as Bill Gross at bond giant, PIMCO, announced that it was off to the races with a 1% mark up in his GDP forecast for 2011, upgrade fever would break out all over. I look no further than my alma mater, Morgan … [Read more...]

December 14, 2010 – The Nissan Leaf Roll Out

Featured Trades: (NISSAN LEAF), (NSANY) 2) The Nissan Leaf Roll Out. With great fanfare and celebration, Nissan Motors (NSANY) at long last delivered its first all electric, 100 mile range Leaf to an ecstatic customer at San Francisco city hall today. Long time readers of this letter know that I have been banging the table on this technology for some time, starting … [Read more...]

December 14, 2010 – Quote of the Day

'This is the ultimate Keynesian stimulus. We debated all summer and Keynes won. This is $800-$900 billion of stimulus over the next two years. This guarantees that the economy will surprise to the upside,' said Greg Valliere, chief research strategist at the Potomac Group. … [Read more...]

December 13, 2010 – Soaring With the Eagles

Featured Trades: (SOARING WITH THE EAGLES), (SLV), (AGQ), (GLD), (TBF), (TBT), (XLF), (BAC), (YCS) 1) Soaring With the Eagles. I was sleeping like a rock last night, having one of those great flying dreams. I dove, rolled, and looped through the clouds, and soared with the eagles, my arms stretched out like wings. The phone rang. I looked at the clock. It was … [Read more...]

December 13, 2010 – And What a Year It's Been!

Featured Trades: (SLV), (BAL), (PALL), (JO), (JJG), (CORN), (UNG), (FXE) (WHAT A YEAR!) 3) And What a Year It's Been! Look at the year to date performance of  the asset classes below, and it almost looks like my buy and sell recommendations I put out at the beginning of 2010. I had strong buy recommendations on the top nine performers, including palladium (PALL) … [Read more...]

December 10, 2010 – Only Two Weeks Until the December 28 Chicago Strategy Luncheon

Featured Trades: (CHICAGO STRATEGY LUNCHEON)   1) Only Two Weeks Until the December 28 Chicago Strategy Luncheon. Come join me for lunch at the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Chicago on Tuesday, December 28, 2010. A three course lunch will be followed by a 45 minute PowerPoint presentation and a 30 minute question … [Read more...]

December 10, 2010 – The Lost Decade For Bonds Has Begun!

Featured Trades: (A TECHNICAL UPDATE ON YOUR POSITIONS), (BAC) 2) The Lost Decade For Bonds Has Begun! In order to enjoy your coming weekend, I thought you'd like a technical update of your positions, so feast your eyes on the two charts below. They say that a picture is worth a thousand words, so here is 2,000 words worth. If you have piled on the positions that I … [Read more...]

December 10, 2010 – Testimonial

4) Testimonial. Signing up for your service was the easiest decision that I have ever made knowing the value that I am getting in return. Thanks for making the world of capital markets profitable for non-Wall Street guys that are busy working in other professions. Until now, I have been forced to deal with money managers or 'Company Men' that only push the products … [Read more...]

December 9, 2010 – What a Wild Day!

Featured Trades: (BAC) 1) What a Wild Day! I was looking forward to a quiet day today. I was sitting in front of the fireplace, an oak log that I had lovingly hand carried down from Mt. Diablo crackling away, reading the morning papers. Frank Sinatras' greatest hits was in the CD player (young readers please Google 'Frank Sinatra' and then go buy it). I had … [Read more...]

December 9, 2010 – Instant Gratification Alert

Featured Trades: (TBT), (YCS), (SSO) 2) Instant Gratification Alert. If you are one of the 1,000 recent new subscribers to The Diary of a Mad Hedge Fund Trader, religeously executed every trade I recommended, and ignore the naysayers and the party poopers, well done! As I write this, the leveraged short Treasury bond ETF, the (TBT), has exploded to the upside, … [Read more...]

December 9, 2010 – Please Use My Free Data Base Search

3) Please Use My Free Data Base Search. The original purpose of this letter was to build a database 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...]

December 8, 2010 – Quote of the Day

'There is an extraordinary amount of crowding out that is occurring as a consequence of the United States Treasury preempting the flow of savings in the economy. Approximately one third of the decline in capital investment as a share of cash flow is directly attributable to the crowding out of all other borrowers by the US Treasury,' said Dr, Alan Greenspan, former … [Read more...]

December 7, 2010 – Los Angeles Strategy Luncheon Review

Featured Trades: (LOS ANGELES STRATEGY LUNCHEON REVIEW) 1) Los Angeles Strategy Luncheon Review.  Even though I grew up in Los Angeles during the fifties and sixties, visiting today feels like a trip to an exotic foreign country. It's as if the city was destroyed in some terrible war and rebuilt in a hodgepodge way, as Tokyo and Berlin were after WWII.  Most of what I … [Read more...]

December 7, 2010 – There is @$*% Scalp Here in Financials

Featured Trades: (A SCALP IN THE FINANCIALS) 2) There is @$*% Scalp Here in Financials. Regular readers of this letter are well aware that I despise financial stocks for the worthless pieces of paper that they are. Therefore, I think you should rush out and buy financials stocks right now. There is a method to my 'Madness.' Financials are the preeminent … [Read more...]

December 7, 2010 – Buy the &%$#! Dip

Featured Trades: (BUY THE &%$#! DIP) 3) Buy the &%$#! Dip. For proof that I will leave no stone unturned in my eternal search for market insight, look no further than the video link below of two imaginary fund managers debating how to deal with the current market. I think the message is 'buy the dip.' It is irrefutable proof that the end of year silly … [Read more...]

Lunch With the CIA

Lunch with the Central Intelligence Agency is always interesting, although five gorillas built like brick shithouses staring at me intently didn't help my digestion. Obama's pick of Leon Panetta as the agency's new director was controversial because he didn't come from an intelligence background- upsetting the career spooks at Langley to no end. But the President thought a … [Read more...]

December 6, 2010 – Is Food the New Distressed Asset?

Featured Trades: (IS FOOD THE NEW DISTRESSED ASSET?), (DBA), (MOO), (AGU), (MOO) 2) Is Food the New Distressed Asset? After my entertaining repast with the head of our nation's intelligence service, I had to ask myself this question. During the sixties, new dwarf varieties, irrigation, fertilizer, and heavy duty pesticides tripled crop yields, unleashing a green … [Read more...]

December 6, 2010 – The Real Estate Market in 2030

Featured Trades: (THE REAL ESTATE MARKET IN 2030)   3) The Real Estate Market in 2030. A number of analysts, and even some of those in the real estate industry, are finally coming around to the depressing conclusion that there will never be a recovery in residential real estate. Long time readers of this letter know too well that I have been hugely negative on … [Read more...]

December 3, 2010 – The Mad Hedge Fund Trader’s December 28 Global Strategy Luncheon

Featured Trades: (CHICAGO STRATEGY LUNCHEON)   1) The Mad Hedge Fund Trader's December 28 Global Strategy Luncheon. Come join me for lunch for the Mad Hedge Fund Trader's Global Strategy Update, which I will be conducting in Chicago on Tuesday, December 28, 2010. A three course lunch will be followed by a 45 minute PowerPoint presentation and a 30 minute … [Read more...]

December 3, 2010 – Trade Alert for the (TBT)

Featured Trades: (TBT TRADE ALERT) 2) Trade Alert for the (TBT). It's time to get in on the greatest short play of the coming decade. I have been pounding the table that investors should pile into the (TBT), the 200% leveraged bet that Treasury bond prices would go down, since August. It rose 28% after that, rocketing from $30 to $38.40. Well, the market gods have … [Read more...]

December 3, 2010 – Trade Alert for the (SSO)

Featured Trades: (SSO TRADE ALERT), (NSANY), (TM), (TTM) 3) Trade Alert for the (SSO). After the Dow's impressive 250 point blast off to the upside yesterday, my phone started ringing off the hook. Fundamental and technical analysts around the world were screaming at me that a major breakout was at hand, it was off to the races, and the 'RISK ON' trade was … [Read more...]

December 1, 2010 – The Portland Thanksgiving Strategy Luncheon

Featured Trades: (PORTLAND STRATEGY LUNCHEON) 1) The Portland Thanksgiving Strategy Luncheon. Many thanks to all who attended the First Annual Portland Thanksgiving Strategy Luncheon, whose repartee, give and take, and wide-ranging debate made the event well worth the trip from Fog City. I always take in more from these events than I dish out, which is why I do so many. … [Read more...]

December 1, 2010 – My Anti Review of the Chevy Volt

Featured Trades: (CHEVY VOLT REVIEW), (NSANY), (GM)   2) My Anti Review of the Chevy Volt. In 2011, we will we be deluged by an onslaught of advertising praising the virtues of the electric car, as models like the Nissan Leaf (NSANY) and the Chevy Volt (GM) hit the market. If last week's San Francisco Auto Show at the downtown Moscone Center was any guide, … [Read more...]

December 1, 2010 – Your Engraved Invitation to Sell the Yen

Featured Trades: (JAPANESE YEN), (FXY), (YCS) 3) Your Engraved Invitation to Sell the Yen. It is looking like the worm has finally turned on the Japanese currency. After tickling ¥80.20 for a nanosecond on November 1, it has swan dived. It didn't even rally during Thanksgiving week, when Uncle Buck momentarily sold off against most currencies. We broke the 50 day … [Read more...]