Featured Trade:
(JULY 8 LONDON STRATEGY LUNCHEON),
(THE AMERICAN ONSHORING TREND IS ACCELERATING),
(GE), (TSLA),
(HEDGE FUNDS: THE NEW DUMB MONEY)

General Electric Company (GE)
Tesla Motors, Inc. (TSLA)

I’ll be giving you my up to date view on stocks, bonds, currencies commodities, precious metals, and real estate. And to keep you in suspense, I’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $249.

I’ll be arriving an hour early and leaving late in case anyone wants to have a one on one discussion, or just sit around and chew the fat about the financial markets.

The lunch will be held at a private club on St. James Street, the details of which will be emailed to you with your purchase confirmation.

I look forward to meeting you, and thank you for supporting my research. To purchase tickets for the luncheons, please go to my online store.

When I first started on Wall Street in the seventies, you heard a lot about the “dumb money.” This was a referral to the low-end retail investors who bought the research, hook-line-and-sinker, loyally subscribed to every IPO, religiously bought every top, and sold every bottom.

Needless to say, such clients didn’t survive very long, and retail stock brokerage evolved into a volume business, endlessly seeking to replace outgoing suckers with new ones. When one asked “Where are the customers’ yachts,” everyone in the industry new the grim answer.

Since the popping of the dot-com boom in 2000, the individual investor has finally started to smarten up. They bailed en masse from equities, seeking to plow their fortunes into real estate, which everyone knew never went down. Since 2007, the exit from equities has accelerated.

I bet the average individual investor is outperforming the average hedge fund in 2013 by a large margin. Look no further than the chart below, which shows and average return by hedge funds, compared to and S&P 500 index gain of 16%.

This takes me back to the Golden Age of hedge funds during the 1980’s. For a start, you could count the number of active funds on your fingers and toes, and we all knew each other. The usual suspects included the owl like Soros, the bombastic Robertson, steely cool Tudor-Jones, the nefarious Bacon, the complicated Steinhart, of course, myself, and a handful of others.

The traditional Wall Street establishment viewed us as outlaws, and believed that if the trades we were doing weren’t illegal, they should be, like short selling. Investigations and audits were a daily fact of life. It wasn’t easy being green. I believe that Steinhart was under investigation during his entire 40 year career, but the Feds never brought a case.

It was all worth it, because in those days, if you did copious research and engaged in enough out of the box thinking, you could bring in enormous profits with almost no risk. I used to call these “free money” trades. To be taken seriously as a manager by the small community of hedge fund investors you had to earn 40% a year or you weren’t worth the perceived risk. Annual gains of 100% were not unheard of.

Let me give you an example. In 1989, you could buy a leveraged warrant on a Japanese stock near parity, for $100, that gave you the right to own $500 worth of stock. You bought the warrant and sold short the underlying stock. Overnight yen yields then were at 6%, so 500% X 6% = 30% a year, your risk free return.

Most Japanese stock dividends were near zero then, so the cost of borrowing was almost nothing. The position effectively created a high yield synthetic convertible bond. If the stock then fell, you also made big money on your short stock position. This was not a bad portfolio to have in 1990, when the Nikkei stock index plunged from ¥39,000 to ¥20,000 in three months, and some individual shares dropped by 80%.

Trades like this were possible because only a smaller number of mathematicians and computer geeks, like me, were on the hunt, and collectively, we amounted to no more than a flea on an elephant’s back. Today, there are over 10,000 hedge funds managing $2.5 trillion, accounting for anywhere from 50% to 70% of the daily volume.

Many of the strategies now can only be executed by multimillion-dollar mainframe computers collocated next to the stock exchange floor. Winning or losing trades are often determined by the speed of light. And as the numbers have expanded exponentially from dozens to hundreds of thousands, the quality of the players has gone down dramatically, with copycats and “wannabees” crowding the field.

The problem is that hedge funds are no longer peripheral to the market. They are the market, and therein lies the headache. How are you supposed to outperform the market when it means beating yourself? As a result, hedge fund managers have replaced the individual as the new “dumb money”, buying tops and selling bottoms, only to cover at a loss, as we witnessed today.

When markets disintegrate into a few big hedge funds slugging it out against each other, no one makes any money. I saw this happen in Tokyo in the 1990’s, when hedge funds took over the bulk of trading. Volumes shrank to a shadow of their former selves.

How does this end? We have already seen the outcome; that investors flee markets run by hedge funds and migrate to those where they have less of an impact. That explains the meteoric rise of trading volumes of other assets classes, like bonds and foreign exchange.

How About 2% and 20%?

Featured Trade:
(JULY 25 PORTOFINO, ITALY STRATEGY LUNCHEON),
(FIVE STOCKS TO BUY FOR THE SECOND HALF)
(TESTIMONIAL)

I’ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. And to keep you in suspense, I’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $205.

The lunch will be held at a major hotel on the beach in the village of Santa Margherita Ligure, the details of which will be emailed with your purchase confirmation. The town is easily accessible by train from Genoa, and the hotel is about a ten-minute walk from the train station.

Bring your broad brimmed hat, sunglasses, and suntan lotion. You will need them. The dress is casual. Accompanying spouses and significant others will be free to use the beach below and bill drinks to my tab as my guest. Together we will plot the future of western civilization.

I look forward to meeting you, and thank you for supporting my research. To purchase tickets for the luncheons, please go to my online store.

I Also like that you’re including a focus on metals, as I’m already trading (GLD), (SLV) and their inverses (DGZ), (GLL), (ZSL), and (DUST) on my own (and making excellent profits), but have been wondering, “Where can I find a pro’s guidance on daily entry, exit, and pivot points.”

Well, you just answered that burning question and have made my month!

Count me in as a subscriber. Send an invoice as soon as you want!

All good wishes,
Gary
Garden City, NY

I’ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. And to keep you in suspense, I’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $205.

The lunch will be held at a major hotel on the beach in the village of Santa Margherita Ligure, the details of which will be emailed with your purchase confirmation. The town is easily accessible by train from Genoa, and the hotel is about a ten minute walk from the train station.

Bring your broad brimmed hat, sunglasses, and suntan lotion. You will need them. The dress is casual. Accompanying spouses will be free to use the beach below and bill drinks to the luncheon. Together we will plot the future of western civilization.

I look forward to meeting you, and thank you for supporting my research.

Featured Trade:
(JULY 2 NEW YORK STRATEGY LUNCHEON),
(THE END OF THE COMMODITY SUPER CYCLE)
(GLD), (SLV), (CU), (BHP), (USO), (PALL), (PPLT),
(CORN), (WEAT), (SOYB), (DBA), (FXA)

SPDR Gold Shares (GLD)
iShares Silver Trust (SLV)
First Trust ISE Global Copper Index (CU)
BHP Billiton Limited (BHP)
United States Oil (USO)
ETFS Physical Palladium Shares (PALL)
ETFS Physical Platinum Shares (PPLT)
Teucrium Corn (CORN)
Teucrium Wheat (WEAT)
Teucrium Soybean (SOYB)
PowerShares DB Agriculture (DBA)
CurrencyShares Australian Dollar Trust (FXA)

I’ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. And to keep you in suspense, I’ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $209.

The formal luncheon will run from 12:00 to 2:00 PM. I’ll be arriving an hour early and leaving late in case anyone wants to have a one on one discussion, or just sit around and chew the fat about the financial markets.

The event will be held at a prestigious private club on Central Park South, the details of which will be emailed to you with your purchase confirmation.

I look forward to meeting you, and thank you for supporting my research. To purchase tickets for the luncheons, please go to my online store.

Featured Trade:
(INTRODUCING THE MAD DAY TRADER),
(A SPECIAL NOTE TO TRADE ALERT FOLLOWERS)
(REVISITING THE FIRST SILVER BUBBLE), (SLV)

iShares Silver Trust (SLV)

Mad Day Trader uses a dozen proprietary short-term technical and momentum indicators to generate buy and sell signals. These will be sent to you by text message and email for immediate execution. During normal trading conditions, you should receive three to five alerts a day.

As with our existing service, you will receive ticker symbols, entry and exit points, targets, stop losses, and regular real time updates. At the end of each day, a separate short-term model portfolio will be sent to you and posted on the website.

The new service will generate long and short selling signals for a range of widely traded exchange traded funds (ETF’s). These include stock indexes (SPY), bonds (TLT), (TBT), foreign exchange (FXY), (FXE), (FXA), commodities (CU), (CORN), energy (USO), (UNG), and precious metals (GLD), (SLV). There is also a special focus on the leading hot stocks of the day. This will be followed up with a series of educational webinars that will be an important resource for the serious trader.

The Mad Day Trader service will be provided out of Chicago by my old friend and industry veteran, Jim Parker. Jim is a 40-year veteran of the financial markets and has long made a living as an independent trader in the pits at the Chicago Mercantile Exchange. He has worked his way up from a junior floor runner, to advisor to some of the world’s largest hedge funds. We are lucky to have him on our team and gain access to his experience, knowledge, and expertise.

I have been following his alerts for the past five years, and his market timing has become an important part of the “unfair advantage” that I provide readers. The time has finally come to offer Mad Day Trader as a stand-alone product.

A trading service with this degree of success and sophistication normally costs $20,000 a year. As a client of The Mad Hedge Fund Trader, you will be able to purchase Mad Day Trader alone for $2,000 a year or $699 a quarter. Or you can buy it as a package together with Global Trading Dispatch, which we call Global Trading Dispatch Pro, for $4,000 a year, a 20% discount to the full retail price. Give yourself the unfair advantage you always wanted and buy the combined package.

As part of the initial launch, I will send out Mad Day Trader free to all current paid subscribers of Global Trading Dispatch for the next 30 days. That will give you the opportunity to decide if the new service can enhance your trading performance. When the free service expires, we will send you a link to purchase a full subscription. There will be no automatic billing of current subscribers.

Part of the deal is that I want to hear from you on how we can evolve Mad Day Trader to make it more user friendly and coherent to better meet your needs. Sometimes, a couple of old warhorses like us forget how much our specialized language is incomprehensible to the outside world. Just send us an email with suggestions to support@madhedgefundtrader.com.

We have done what we can to distinguish the two, using different logos, colors, fonts, and subject. However, in the heat of battle I understand that it is all too easy to speed-read your data sources and jump to conclusions. As a back up, each service will post its model trading portfolio on the website after the close of each day.

These two services will evolve to better meet your needs, and we appreciate your input whenever possible.