The Bottom Building Process Has Begun

John Thomas - Young Man - Armed

I have an arrangement with several large hedge funds where they pay me a small fortune every month for the privilege of calling me one day a year. Wednesday was that day. It was a day when the $20 billion hedge fund waited on hold while I got off the phone with the $100 billion hedge fund. And that’s not including urgent calls from the White House, the office of the Joint … [Read more...]

Friday, October 24 San Francisco Strategy Luncheon

San Francisco

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in San Francisco on Friday, October 24, 2014. An excellent meal will be followed by a wide-ranging discussion and an extended question and answer period. I’ll be giving you my up to date view on stocks, bonds, currencies, commodities, precious metals, and real estate. And … [Read more...]

Revisiting Cheniere Energy (LNG)

Destroyed Town

I am constantly asked if there are any ways investors can take advantage of the fracking and horizontal drilling boom in natural gas. You don’t want to touch the gas producing companies, like Chesapeake (CHK) and Devon (DVN), because prices are probably going to stay down for years. Good firms that benefit from the increased volume of gas pumped are few and far between. … [Read more...]

October 17, 2014 – Quote of the Day


“The red light on a television camera going on has the same effect on members of congress as a full moon does on werewolves,” said former Secretary of Defense, Robert Gates. … [Read more...]

October 16, 2014

Global Market CommentsOctober 16, 2014Fiat Lux SPECIAL AIRLINE ISSUE Featured Trade:(DELTA AIRLINES IS CLEARED FOR TAKEOFF),(DAL), (UAL), (AAL), LUV), (USO), (TLT) Delta Air Lines, Inc. (DAL)United Continental Holdings, Inc. (UAL)American Airlines Group Inc. (AAL)Southwest Airlines Co. (LUV)United States Oil ETF (USO)iShares 20+ Year Treasury Bond (TLT) … [Read more...]

Delta Airlines is Cleared for Takeoff

John Thomas Croatia

When I was a young, clueless investment banker at Morgan Stanley 30 years ago, the head of equity sales took me aside to give me some fatherly advice. Never touch the airlines. The profitability of this industry was totally dependent on fuel costs, interest rates and the state of the economy, and management hadn't the slightest idea of what any of these were going to do. If I … [Read more...]

October 15, 2014

Global Market CommentsOctober 15, 2014Fiat Lux Featured Trade:(KEEP AMERICAN EXPRESS ON YOUR SHORT LIST),(AXP), (V),(BECOME MY FACEBOOK FRIEND),(OIL ISN’T WHAT IT USED TO BE),(USO), (DIG), (DUG) American Express Company (AXP)Visa Inc. (V)United States Oil ETF (USO)ProShares Ultra Oil & Gas (DIG)ProShares UltraShort Oil & Gas (DUG) … [Read more...]

Keep American Express on Your Short List

John Thomas-16 yrs old

I remember that the highlight of my 1968 trip to Europe was always my visit to the nearest American Express (AXP) office to pick up my mail. In those pre Internet and email days, it was the only way that a fresh faced 16 year old could stay in touch with a hand wringing family while traveling around the world. They just wrote “John Thomas, American Express, Paris, France,” and … [Read more...]

Become My Facebook Friend


If you would like to get a free headline service from The Diary of the Mad Hedge Fund Trader, then please join my 1,561 friends. Every day we are posting headlines along with summaries of the stories on our Facebook page. As soon as you open your own Facebook page, you will receive our latest headlines as newsfeeds. To “friend me”, please go to my home page at … [Read more...]

Oil Isn’t What It Used to Be

John Thomas

With the International Energy Agency cutting global consumption by 200,000 barrels a day in 2014 and 300,000 barrels a day in 2015, all eyes were on the oil market today. I had to slap myself when I saw the $81 handle for West Texas intermediate, it had gotten so cheap so fast. Virtually every stock market analyst has been puzzled by the seeming immunity of stock markets to … [Read more...]

October 14, 2014

Global Market CommentsOctober 14, 2014Fiat Lux Featured Trade:(10 REASONS WHY THE BULL MARKET IS STILL ALIVE),(SPY), (TLT), (TSLA), (IWM),(BIDDING FOR THE STARS), (SPX), (INDU),(TESTIMONIAL) SPDR S&P 500 ETF (SPY)iShares 20+ Year Treasury Bond (TLT)Tesla Motors, Inc. (TSLA)iShares Russell 2000 (IWM)S&P 500 Large Cap Index (SPX)Dow Jones Industrial Average (^DJI) … [Read more...]

10 Reasons Why the Bull Market is Still Alive

John Thoms - Black Swans

Well, so much for the 200 day moving average! It’s like that girlfriend who has been ferociously loyal for the last year, and suddenly she is busy every weekend and never returns phone calls. Not that this ever happens to me. Ahem. I knew there would be trouble when the perma bulls on TV told me the market would bounce hard off this inviolable line in the sand, with the (SPX) … [Read more...]

Bidding for the Stars

Fishing Nets

A few years ago, I went to a charity fund raiser at San Francisco’s priciest jewelry store, Shreve & Co., where the well-heeled men bid for dates with the local high society beauties, dripping in diamonds and Channel No. 5. Well fueled with champagne, I jumped into a spirited bidding war over one of the Bay Area’s premier hotties, whom shall remain nameless. Suffice to … [Read more...]


John Thomas

Hello John Thomas, Your Trade Alert service has changed my life. Some fight for their country, some talk for their country, and some write for their country. But you, John Thomas, have thought for us all. I admire, as do all my family, the wonderful imagery and the vivacity of your letters. Some minds wear well, but yours doesn’t appear to wear at all. Live well my … [Read more...]

October 14, 2014 – Quote of the Day

New $100 Bill

“He who sacrifices freedom for security deserves neither,” said Benjamin Franklin, the Revolutionary War US ambassador to Paris and signer of the Declaration of Independence. … [Read more...]

October 13, 2014


America’s Demographic Collapse and Your Stock Portfolio


As a long term observer of America’s demographic picture, I was shocked to hear of a recent report from the US Census Bureau (click here for the website). The US population grew by a scant 0.72% in 2012, the lowest since 1942. You can’t start or expand a family when an essential partner in the process is off fighting WWII, and there were 17 million of them. This is far below … [Read more...]

October 13, 2014 – Quote of the Day

Sahara Desert marching

“If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand,” said Nobel Prize winning economist, Milton Friedman … [Read more...]

October 10, 2014

Global Market CommentsOctober 10, 2014Fiat Lux Featured Trade:(10 REASONS WHY I’M WRONG ON BOND),(TLT), (TBT), (LQD), (MUB), (ELD), (LINE),(A SPECIAL NOTE ON EXERCISED OCTOBER OPTIONS) iShares 20+ Year Treasury Bond (TLT)ProShares UltraShort 20+ Year Treasury (TBT)iShares iBoxx $ Invst Grade Crp Bond (LQD)iShares National AMT-Free Muni Bond (MUB)WisdomTree Emerging Markets … [Read more...]

October 9, 2014

Global Market Comments October 9, 2014 Fiat Lux Featured Trade: (HOW TO EXECUTE A VERTICAL BULL CALL SPREAD) (AAPL) (TEN TIPS FOR SURVIVING A DAY OFF WITH ME) Apple Inc. (AAPL) … [Read more...]

How to Execute a Vertical Bull Call Spread


For those readers looking to improve their trading results and create the unfair advantage they deserve, I have just posted a new training video on How to Execute a Vertical Bull Call Spread. This is a pair of positions in the options market that will be profitable when the underlying security goes up, sideways, or down small in price over a defined period of time. It is the … [Read more...]

October 9, 2014 – Quote of the Day

John Thomas with Tom Freidman

“The Clinton and Bush administrations had it right with regards to our relations with China. We need to draw red lines when necessary, and build bridges when possible,” said my friend, columnist Tom Friedman, of the New York Times. … [Read more...]

October 8, 2014

Global Market CommentsOctober 8, 2014Fiat Lux SPECIAL ENERGY ISSUE Featured Trade:(HOW LOW IS LOW FOR OIL?),(USO), (XOM), (COP), (OXY) United States Oil ETF (USO)Exxon Mobil Corporation (XOM)ConocoPhillips (COP)Occidental Petroleum Corporation (OXY) … [Read more...]

How Low is Low for Oil?

TI Europe

With the recent collapse in oil prices, down a whopping $20 in just four months, I am starting to get a lot of emails from followers looking for Trade Alerts to buy the energy companies. After all, energy is one of my three core industries in which to invest over the next two decades. Why not now? The short answer is: Not yet. Don’t ever confuse a stock that has gone down a … [Read more...]

October 8, 2014 – Quote of the Day

Smart Guy

“When you think you know more than everyone else about the consumer, you’re in trouble,” said Mickie Drexler, the legendary CEO of J Crew and Apple board member. … [Read more...]

October 7, 2014


Last Chance to Attend the Thursday, October 9 Incline Village, Nevada Global Strategy Luncheon

Lake Tahoe View

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in Incline Village, Nevada on Thursday, October, 2014. An excellent meal will be followed by a wide-ranging discussion and an extended question and answer period. I’ll be giving you my up to date view on stocks, bonds, currencies, commodities, precious metals, and real … [Read more...]

An Update on Gilead Sciences


I spoke to a friend of mine the other day who works for a health care venture capital firm, and I thought I’d pass through a few tidbits. Gilead Sciences (GILD) is basking in the glow of the most profitable drug launch in history. Its blockbuster Sofobuvir treatment for hepatitis C, launched in 2013, inhibits the RNA polymerase that the hepatitis C virus (HCV) uses to … [Read more...]

October 6, 2014

Global Market CommentsOctober 6, 2014Fiat Lux Featured Trade:(THE CORRECTION IS OVER),(SPY), (TSLA), (BAC),(TESTIMONIAL) SPDR S&P 500 ETF (SPY)Tesla Motors, Inc. (TSLA)Bank of America Corporation (BAC) … [Read more...]

The Correction is Over

Men in Black - Jones-Smith

5%. A lousy 5%. That’s all we managed to clock in the latest correction in the greatest bull market of all time. It’s not the 6% hickey we had to endure in February, nor as modest as the 4% setback in August. Call it a middling type correction, a kind of correction light. The buyers do still have itchy trigger fingers. All it took to bring it to an end was a September … [Read more...]


John Thomas - Hiking

Dear John, You gave me a profit this year well into six digits, which has me so addicted to your service that I'm considering taking out life insurance on you from Lloyd's of London. I admit I get VERY nervous every time you adventure off to climb the Matterhorn, or vagabond through the High Sierras within stalking distance of mountain lions, or drive that Tesla further than … [Read more...]

October 6, 2014 – Quote of the Day


“No matter who wins the election, we still have a lot of wood to chop. There is no way we continue to run huge deficits without a severe market consequence,” said my old friend and former client, Leon Cooperman, CEO of mega hedge fund Omega Advisors.   … [Read more...]

October 3, 2014

Global Market CommentsOctober 3, 2014Fiat Lux Featured Trade:(MAD HEDGE FUND TRADER TOPS 35% GAIN IN 2014),(SPY), (IWM), (TLT), (TBT), (TSLA), (BAC), (FXE),(OCTOBER 8 GLOBAL STRATEGY WEBINAR),(A COW BASED ECONOMICS LESSON) SPDR S&P 500 ETF (SPY)iShares Russell 2000 (IWM)iShares 20+ Year Treasury Bond (TLT)ProShares UltraShort 20+ Year Treasury (TBT)Tesla Motors, Inc. … [Read more...]

Mad Hedge Fund Trader Tops 30% Gain in 2014

John Thomas

It looks we are going to have to start watching the appalling Zombie shows on TV and in the movies. That is so we can gain tips on how to survive the coming Apocalypse that will unfold when the Ebola virus escapes Texas and spreads nationally. I’m not worried. I’m actually pretty good with a bow and arrow. Thank you United Airlines! I happy to report that the total return … [Read more...]

October 3, 2014 – Quote of the Day


'There is one peculiarity about mass psychology in that when you are in a bubble, you can't see it. Bubbles are invisible when you are inside the bubble,' said the charming Jim Dines, of The Dines Letter. … [Read more...]

October 2, 2014

Global Market CommentsOctober 2, 2014Fiat Lux Featured Trade:(INTRODUCING THE MAD HEDGE FUND TRADER TRAINING VIDEOS)(BE CAREFUL WHO YOU SNITCH ON),(THE LONG VIEW ON EMERGING MARKETS),(EEM), (RSX), (EPHE), (PIN),(TESTIMONIAL) iShares MSCI Emerging Markets (EEM)Market Vectors Russia ETF (RSX)iShares MSCI Philippines (EPHE)PowerShares India ETF (PIN) … [Read more...]

Introducing the Mad Hedge Fund Trader Training Videos

John Thomas

I am pleased to announce the introduction of the Mad Hedge Fund Trader Educational Video Service. An incredibly broad range of individuals subscribe to my services. They include everyone from the beginning college students attempting to educate themselves though online model trading portfolios, to the hardened $20 billion hedge fund manager swinging around huge chunks of … [Read more...]

October 2, 2014 – Quote of the Day

Clowns - French

“The French have more fun in one year than the English do in ten,” said John Adams, America’s second president, and one time ambassador to Paris and London. … [Read more...]

October 1, 2014

Global Market Comments October 1, 2014 Fiat Lux Featured Trade: (THE REAL ESTATE MARKET IN 2030), (XHB), (INDUSTRIES YOU WILL NEVER HEAR FROM ME ABOUT), (A CONVERSATION WITH THE BOOTS ON THE GROUND) SPDR S&P Homebuilders ETF (XHB) … [Read more...]

The Real Estate Market in 2030

House Fire

A number of analysts, and even some of those in the real estate industry, thought that there would never be a recovery in residential real estate. Long time readers of this letter know too well that I went hugely negative on the sector in late 2005, when I unloaded all of my holdings. However, I believe that “forever” may be on the extreme side. Personally, I believe there … [Read more...]

September 30, 2014

Global Market CommentsSeptember 30, 2014Fiat Lux Featured Trade:(THURSDAY OCTOBER 9 INCLINE VILLAGE, NEVADA STRATEGY LUNCHEON),(WHY I’M DOUBLING UP MY SHORTS),(SPY), ($INDU), (IWM), (HYG), (QQQ), (FXE),(CHINA’S LONG AND WINDING ROAD),(FSLR), (STPFQ), (YGE) SPDR S&P 500 ETF (SPY)Dow Jones Industrial Avrage ($INDU)iShares Russell 2000 (IWM)iShares iBoxx $ High Yield … [Read more...]

Why I’m Doubling Up My Shorts

Market Floor

I don’t double up short positions very often. I am too old to lose all my money and go back to work as an entry-level analyst at Morgan Stanley. Besides, they probably wouldn’t have me back anyway. It is a different company than it was 30 years ago, a lot different. However, the dead cat, short covering bounce we got off this morning’s Hong Kong dump does allow me to get back … [Read more...]

China’s Long and Winding Road

Chinese Woman

In the wake of the latest round of pro democracy demonstrations in China, I spent the evening speaking to Gao Jie, a Beijing civil judge who left the bench to join China's growing environmental movement when her kids came home from school one day coughing and wheezing. You only have to inhale in the capitol city these days to understand that they have a huge problem there. … [Read more...]

September 30, 2014 – Quote of the Day

John Adams

“I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain,” said John Adams, the … [Read more...]

September 29, 2014

Global Market CommentsSeptember 29, 2014Fiat Lux Featured Trade:(FRIDAY OCTOBER 24 SAN FRANCISCO STRATEGY LUNCHEON),(KEEP GILEAD SCIENCES ON YOUR RADAR),(GILD, (XLV), (SPY),(PLEASE USE MY FREE DATA BASE SEARCH),(TESTIMONIAL) Gilead Sciences Inc. (GILD)Health Care Select Sector SPDR ETF (XLV)SPDR S&P 500 ETF (SPY) … [Read more...]

Friday October 24, San Francisco Strategy Luncheon

San Francisco

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in San Francisco on Friday, October 24, 2014. An excellent meal will be followed by a wide-ranging discussion and an extended question and answer period. I’ll be giving you my up to date view on stocks, bonds, currencies, commodities, precious metals, and real estate. And … [Read more...]

Keep Gilead Sciences on Your Radar


I am going to continue to use this correction in the stock market as an opportunity to put new names in front of you for inclusion in your investment portfolio. That way, when the markets turn, you can strike with the speed of a rattlesnake in returning to a “RISK ON” posture. Major turnarounds are not the time to engage in deep, fundamental research. It is when you should be … [Read more...]


John Thomas

A short note to thank John for 3 hours of great information and insight during his Melbourne strategy lunch. Listening to John’s ideas face to face was awesome and I have committed to myself to keep following his research and trade ideas because the performance has been outstanding. Regards, Dallas Melbourne, Australia … [Read more...]

September 29, 2014 – Quote of the Day

Man Clouds Chart

“It’s not like stocks are so compelling. It’s that there is nowhere else to put your cash. There’s a ton of capital coming in here. When it feels this easy, it’s usually time to be cautious,” said Barry Sternwood, CEO of the Starwood Capital Group. … [Read more...]

September 26, 2014

Global Market CommentsSeptember 26, 2014Fiat Lux Featured Trade:(HOLDER RETIREMENT COULD SEND BANK OF AMERICA FLYING),(BAC), (XLF), (SPY), (BABA), (HYG),(PETER F. DRUCKER ON MANAGEMENT),(THANK GOODNESS I DON’T LIVE IN SWEDEN), (EWD) Bank of America Corporation (BAC)Financial Select Sector SPDR ETF (XLF)SPDR S&P 500 ETF (SPY)Alibaba Group Holding Limited (BABA)iShares … [Read more...]

Holder Retirement Could Send Bank of America Flying

Bank of America - ATM

Watching the market melt down today, I have been hurriedly compiling a shopping list of stocks to buy, and writing the Trade Alerts in advance for readers to execute. If I am right about interest rates remaining flat or rising for the rest of the year, then financials have to be at the absolute top of such a list. Bank of America (BAC) certainly was the chief whipping boy of … [Read more...]

September 25, 2014

Global Market Comments September 25, 2014 Fiat Lux SPECIAL TESLA ISSUE Featured Trade: (PLUNGING BACK INTO TESLA), (TSLA) Tesla Motors, Inc. (TSLA) … [Read more...]

Plunging Back into Tesla

Tesla Plant

During last month’s Concourse d’ Elegance vintage car show at Pebble Beach, California, I managed to catch up with Tesla’s senior management. All lights were flashing green, and it was full speed ahead. The new Gigafactory being built outside Reno, Nevada will pave the way for the firm’s entry into the mass market. The big issue in selecting a site was not cost or subsidies, … [Read more...]

September 25, 2014 – Quote of the Day


“Tesla (TSLA) is running faster than everyone else, so it’s hard to see how others can close the gap. I think the market smells this,” said Colin Rusch of Northland Capital Markets, and early investor in the Tesla IPO. … [Read more...]

September 24, 2014

Global Market CommentsSeptember 24, 2014Fiat Lux Featured Trade:(TIME TO BAIL ON THE SMALL CAPS),(IWM), (RWM), (TZA), (TSLA), (SPY),(A VERY BRIGHT SPOT IN REAL ESTATE),(THE POPULATION BOMB ECHOES), (POT), (MOS), (AGU), (WEAT), (CORN), (SOYB), (DE) iShares Russell 2000 (IWM)ProShares Short Russell2000 (RWM)Direxion Daily Small Cap Bear 3X ETF (TZA)Tesla Motors, Inc. (TSLA)SPDR … [Read more...]

Time to Bail on the Small Caps

Burning Building

It now appears that the “Alibaba” correction (BABA) is at hand. I warned you, pleaded with you, and begged you about this yesterday, and on May 8 (click here for “Will Alibaba Blow Up the Market”). The longer the company postponed the mother of all IPO’s, the higher the prices flew, until we finally got a print at the absolute apex of the market. Now, it’s time to pay the … [Read more...]

A Very Bright Spot in Real Estate


I feel obliged to reveal one corner of this bubbling market that might actually make sense. By 2050 the population of California will soar from 37 million to 50 million, and that of the US from 300 million to 400 million, according to data released by the US Census Bureau and the CIA Fact Book (check out the population pyramid below). That means enormous demand for the low … [Read more...]

September 23, 2014

Global Market CommentsSeptember 23, 2014Fiat Lux Featured Trade:(DON’T BUY ALIBABA),(BABA), (YHOO), (SFTBY), (AMZN), (EBAY)(A SHORT HISTORY OF HEDGE FUNDS),(A DIFFERENT VIEW OF THE US) Alibaba Group Holding Limited (BABA)Yahoo! Inc. (YHOO)SoftBank Corp. (SFTBY) Inc. (AMZN)eBay Inc. (EBAY) … [Read more...]

Don’t Buy Alibaba

Masayoshi Son

Long time readers of this letter have known for years that the Alibaba IPO was coming, that it had massive implications for the market, and could well signal an interim market top. I’m sticking to my guns. You have to hand it to the underwriters of the company’s initial public offering, the largest in history. Some $25 billion in capital was raised. At the Friday high of $94, … [Read more...]

A Different View of the US


My mother lives in Pakistan, my daughter in Greece, and I have a ski chalet in in Peru. What's more, I have strategy luncheons planned for Australia, Thailand, and Turkey. At least these would be my conclusions after looking at a map prepared by my esteemed former employer, The Economist magazine, of the United States, renaming each state with its international equivalent in … [Read more...]

September 23, 2014 – Quote of the Day


When the legendary economist, John Maynard Keynes, was asked if the world had ever seen a Great Depression before, he responded, “Yes, it was called the Dark Ages, and it lasted 400 years.” … [Read more...]

September 22, 2014

Global Market Comments September 22, 2014 Fiat Lux Featured Trade: (FRIDAY OCTOBER 24 SAN FRANCISCO STRATEGY LUNCHEON), (WHY I’M CHASING THE EURO), (FXE), (EUO), (SEPTEMBER 24 GLOBAL STRATEGY WEBINAR) CurrencyShares Euro ETF (FXE) ProShares UltraShort Euro (EUO) … [Read more...]

Friday, October 24 San Francisco Strategy Luncheon

San Francisco

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in San Francisco on Friday, October 24, 2014. An excellent meal will be followed by a wide-ranging discussion and an extended question and answer period. I’ll be giving you my up to date view on stocks, bonds, currencies, commodities, precious metals and real estate. And to … [Read more...]

Why I’m Chasing the Euro

Printing Press

I’m not a person inclined to chase winning positions. Making money on one trade is certainly no guarantee that you will repeat the win on the next. Lightening doesn’t strikes twice in the same place. Well, actually it does sometimes, especially when it comes to selling short the Currency Shares Euro Trust (FXE). Given the European Central Bank’s dramatic action weeks ago to … [Read more...]

September 22, 2014 – Quote of the Day


“I’m worried that we now have the third bubble in three decades. We had the Dotcom bubble in the nineties, the property bubble in the 2000’s, and now we have the government bond bubble. Real interest rates are now massively negative. That’s where the bubble is.” said a Wall Street trader. … [Read more...]

September 19, 2014

Global Market CommentsSeptember 19, 2014Fiat Lux Featured Trade:(THE DEATH OF GOLD),(GLD), (ABX), (GDX),(THE STRUCTURAL BEAR CASE FOR TREASURY BONDS),(TLT), (TBT) SPDR Gold Shares (GLD)Barrick Gold Corporation (ABX)Market Vectors Gold Miners ETF (GDX)iShares 20+ Year Treasury Bond (TLT)ProShares UltraShort 20+ Year Treasury (TBT) … [Read more...]

The Death of Gold

John Thomas -Gold

One of the most impressive moves in the wake of the Fed’s Wednesday move to maintain ultra low interest rates was to be found in gold. From the moment the news broke the airwaves until the next morning’s opening, the yellow metal dove $20. The damage was even worse in silver, which broke to a new four year low of a mere $17.63 an ounce. Now, here is the really bad new. The … [Read more...]

The Structural Bear Case for Treasury Bonds

Uncle Sam

If you want to delve into the case against the long-term future of US Treasury bonds in all their darkness, consider these arguments. The US has not had a history of excessive debt since the Revolutionary War, except during WWII, when it briefly exceeded 100% of GDP. That abruptly changed in 2001, when George W. Bush took office. In short order, the new president … [Read more...]

September 18, 2014

Global Market CommentsSeptember 18, 2014Fiat Lux Featured Trade:(SHE SPEAKS!),(SPY), (FXE), (EUO), (FXY), (YCS), (GLD), (SLV), (TLT), (TBT),(THE RECEPTION THAT THE STARS FELL UPON) SPDR S&P 500 ETF (SPY)CurrencyShares Euro ETF (FXE)ProShares UltraShort Euro (EUO)CurrencyShares Japanese Yen ETF (FXY)ProShares UltraShort Yen (YCS)SPDR Gold Shares (GLD)iShares Silver Trust … [Read more...]

She Speaks!

John Thomas

Like a deer frozen in a car’s onrushing headlights, markets have been comatose awaiting Federal Reserve governor Janet Yellen’s decision on monetary policy and interest rates. Interest rates are unchanged. Quantitative easing gets cut by $15 billion next month, and then goes to zero. Most importantly the key “considerable period” language stayed in the FOMC statements, meaning … [Read more...]

September 18, 2014 – Quote of the Day

Cold War

“We are about to do something terrible to you. We are going to deprive you of an enemy,” Soviet commentator, Georgi Arbitov, told Secretary of State George Schultz at the end of the cold war. … [Read more...]

September 17, 2014

Global Market CommentsSeptember 17, 2014Fiat Lux Featured Trade:(THURSDAY OCTOBER 9 INCLINE VILLAGE, NEVADA STRATEGY LUNCHEON),(WHY I HAVE NO POSITIONS),(TLT), (TBT), (AAPL), (XLE), (XLV), (IBB), (BIDU), (FXE), (FXY), (YCS),(TAKING A BITE OUT OF STEALTH INFLATION), (SGG), (WEAT) iShares 20+ Year Treasury Bond (TLT)ProShares UltraShort 20+ Year Treasury (TBT)Apple Inc. … [Read more...]

Why I Have No Positions

John Thomas

For the first time in three years, the model trading portfolio of my Trade Alert service has no positions. It is 100% in cash. I took a small profit on my last remaining position on Friday, a long in the ProShares Ultra Short 20+ Year Treasury ETF (TBT), a bet that Treasury bond prices would fall and yields would rise. Call it rocketing back up to breakeven. It’s not that I … [Read more...]

Taking a Bite Out of Stealth Inflation


When I visited the local Safeway over the weekend, I was snared by some uniformed pre-teens, backed by beaming mothers behind a card table selling Girl Scout cookies. I was a pushover. I walked away with a bag of Thin Mints, Lemon Chalet Creams, Do-Si-Dos, and Tagalongs. I have to confess a lifetime addiction to Girl Scout cookies. During the early eighties, one of the … [Read more...]

September 17, 2014 – Quote of the Day

Joan Rivers

“They say when you get old, you become wise. The truth is that when you get old, all the people who know you are stupid are dead,” said the late comedian, Joan Rivers. … [Read more...]

September 16, 2014

Global Market CommentsSeptember 16, 2014Fiat Lux Featured Trade:(THE BULL MARKET IS ALIVE AND WELL),(SPY), (NFLX), (TSLA), (GOOG), (TLT), (BAC), (JPM), (AAPL), (COP), (OXY), (IBB)(IS THIS THE BIG TRADE OF 2015?),(JJC), (DBA), (CORN), (CU), (USO), (KOL),(TESTIMONIAL) SPDR S&P 500 ETF (SPY)Netflix, Inc. (NFLX)Tesla Motors, Inc. (TSLA)Google Inc. (GOOG)iShares 20+ Year … [Read more...]

The Bull Market is Alive and Well

John Thomas

It’s summer time again, when my most loyal readers are to be found strolling the boardwalk at Coney Island, basking on the beach in the Hamptons, or camping out on the pristine shores of lake Tahoe. Trading in the stock market is reflecting as much, with the index flat lining all month, and trading volumes at half of normal levels. What, you say! Half of the businesses at … [Read more...]

Is This the Big Trade of 2015?


Watching the entire commodity complex collapse in unison this year was nothing less than amazing, with many down 30% or more. And I mean the broader definition of commodity. It includes the base metals like copper (JJC), (CU), agricultural products (CORN), (SOYB), (DBA), precious metals (GLD), (SLV), and even energy (USO), (KOL). The only products to escape the slaughter were … [Read more...]


John Thomas - Bomber

Thank you for the call I received from your staff the other day, but I’m afraid I’m not going to be able to renew my subscription to the Mad Hedge Fund Trader. There’s nothing I’d like to do more than renew. I truly enjoy your insights on the markets and a description of your many travels. I have been following you for years and it is really a great deal. However, I am active … [Read more...]

September 15, 2014

Global Market CommentsSeptember 15, 2014Fiat Lux Featured Trade:(RAILROADS ARE BREAKING OUT ALL OVER),(UNP), (CSX), (NSC), (CP), (ACI),(TESTIMONIAL) Union Pacific Corporation (UNP)CSX Corp. (CSX)Norfolk Southern Corporation (NSC)Canadian Pacific Railway Limited (CP)Arch Coal Inc. (ACI) … [Read more...]

September 12, 2014

Global Market CommentsSeptember 12, 2014Fiat Lux Featured Trade:(MAD HEDGE FUND TRADER TOPS 30% GAIN IN 2014),(AAPL), (SPY), (TLT), (TBT), (FXE), (EUO),(THE BIPOLAR ECONOMY),(AAPL), (IBM), (INTC), (ORCL), (CAT) Apple Inc. (AAPL)SPDR S&P 500 ETF (SPY)iShares 20+ Year Treasury Bond (TLT)ProShares UltraShort 20+ Year Treasury (TBT)CurrencyShares Euro ETF (FXE)ProShares … [Read more...]

September 12, 2014 – Quote of the Day


“The fundamental argument against gold is so fundamentally one-sided that it is almost comical,” said options trader, Jim Iuorio, of TJM Institutional Services. … [Read more...]

September 11, 2014


Hanging Out With the Woz

Steve Wozniak

I first spoke to Steve Wozniak via HAM radio when I was 12 and he was the 14-year-old president of the Homestead High School Radio Club in Cupertino, California. With seven children, my dad was pretty stingy with allowance money. But when it came to electronic parts, I had an unlimited budget, as that is where he saw the future. So while other kids collected baseball cards, I … [Read more...]

September 10, 2014

Global Market CommentsSeptember 10, 2014Fiat Lux Featured Trade:(FRIDAY OCTOBER 24 SAN FRANCISCO STRATEGY LUNCHEON)(THE BOND CRASH HAS ONLY JUST STARTED),($TNX), (TLT), (TBT) 10 Year Tresury Note Yield INDX ($TNX)iShares 20+ Year Treasury Bond (TLT)ProShares UltraShort 20+ Year Treasury (TBT) … [Read more...]

September 9, 2014

Global Market CommentsSeptember 9, 2014Fiat Lux Featured Trade:(SEPTEMBER 10 GLOBAL STRATEGY WEBINAR),(WHY SHAREHOLDER ACTIVISTS HAVE THE UPPER HAND),(JCP), (NFLX), (HLF), (AAPL),(INDIA IS CATCHING UP WITH CHINA),(FXI), (PIN), (INP), (TTM) J. C. Penney Company, Inc. (JCP)Netflix, Inc. (NFLX)Herbalife Ltd. (HLF)Apple Inc. (AAPL)iShares China Large-Cap (FXI)PowerShares India … [Read more...]

September 9, 2014 – Quote of the Day


“Apple will never be a consumer products company,” said John Sculley, the Apple CEO who fired Steve Jobs in 1985. Today Apple is the world’s largest and most profitable consumer products company. … [Read more...]

September 8, 2014

Global Market Comments September 8, 2014 Fiat Lux Featured Trade: (WELCOME TO MY NEW WEBSITE) (BEWARE THE COMING EQUITY FAMINE), (WHY WATER WILL SOON BE WORTH MORE THAN OIL), (CGW), (PHO), (FIW), (VE), (TTEK), (PNR) Guggenheim S&P Global Water ETF (CGW) PowerShares Water Resources ETF (PHO) First Trust ISE Water ETF (FIW) Veolia Environnement S.A. (VE) Tetra … [Read more...]

Welcome to My New Website

John Thomas

So, you thought I was lounging around Europe this summer, sipping Champagne and working on my tan? Well, I confess that I did do some of that. The sad fact is that I spent most of the summer engineering a major, ground up rebuild of my website, and an expansion of our services. By the time I got home, I felt like I needed a vacation. My loyal and hard working staff, spread … [Read more...]

Beware the Coming Equity Famine


The world is about to suffer an acute shortage of equity capital over the next eight years, which could total $12.3 trillion. That is the conclusion of the McKinsey Global Institute, an affiliate of McKinsey &Co., a great well of long-term economic thinking which I have been drawing from for the last 40 years. The cause of the coming debacle is quite simple. Investable … [Read more...]

September 5, 2014

Global Market Comments September 5, 2014 Fiat Lux Featured Trade: (SEPTEMBER 10 GLOBAL STRATEGY WEBINAR), (DEMOGRAPHICS AS DESTINY), (FXE), (EUO), (UUP), (A EURO COLLAPSE AT LAST!), (SPY), (EWJ), (EWL), (EWU), (EWG), (EWY), (FXI), (EWI), (EIRL), (GREK), (EWP), (RSX), (IDX), (EPOL), (TUR), (EWZ), (PIN), (EIS) CurrencyShares Euro ETF (FXE) ProShares UltraShort Euro … [Read more...]

A Euro Collapse At Last!

Dollar Certificate

European Central Bank president Mario Draghi pulled the rug out from under the Euro (FXE), (EUO) this morning, announcing a surprise cut in interest rate and substantially adding to its program of quantitative easing. The action caused the beleaguered currency to immediately gap down two full cents against the dollar, the ETF hitting a 15 month low of $127.40. Surprise, that … [Read more...]

Demographics as Destiny


If demographics is destiny, then America’s future looks bleak. At least, that is the inevitable conclusion if demographics is your only consideration. I have long been a fan of demographic investing, which creates opportunities for traders to execute on what I call “intergenerational arbitrage”.  When the numbers of the middle aged are falling, risk markets plunge. Front run … [Read more...]

September 4, 2014

Global Market Comments September 4, 2014 Fiat Lux Featured Trade: (WHAT’S REALLY HAPPENING IN THE MIDDLE EAST), (USO), (TLT), (SPY), (GLD), (UUP), (XLK), (XLI), (XLF) United States Oil (USO) iShares 20+ Year Treasury Bond (TLT) SPDR S&P 500 (SPY) SPDR Gold Shares (GLD) PowerShares DB US Dollar Bullish ETF (UUP) Technology Select Sector SPDR ETF (XLK) Industrial … [Read more...]