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...]

The Reception That the Stars Fell Upon

George Shultz

My friend was having a hard time finding someone to attend a reception who was knowledgeable about financial markets, White House intrigue, international politics, and nuclear weapons. I asked who was coming. She said Reagan’s Treasury Secretary George Shultz, Clinton’s Defense Secretary William Perry, and Senate Armed Services Chairman Sam Nunn. I said I’d be there wearing my … [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...]

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...]

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

Girlscouts

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 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?

Cinderella

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...]

Testimonial

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...]

Railroads Are Breaking Out All Over

Train-Cargo

When I rode Amtrak’s California Zephyr service from Chicago to San Francisco last year, I passed countless trains heading west, hauling hoppers full of coal for shipment to China. This year I took the same trip. The coal trains were gone. Instead I saw 100 car long tanker trains transporting crude oil from North Dakota south to the Gulf Coast. I thought, “There’s got to be a … [Read more...]

Testimonial

John Thomas

Greetings from the great white north. I am a BIG fan of yours and have rejoined your Trade Alert Service for another year. You have friends around the world you have yet to meet. Enclosed is a token of my appreciation. Thanks a 100 trillion! Bob Vancouver, Canada … [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...]

Mad Hedge Fund Trader Tops 30% Gain in 2014

TA Performance 7-14

I happy to report that the total return for my followers so far in 2014 has topped 30%, compared to a far more arthritic 2% gain for the Dow Average during the same period. So far in September, my Trade Alert followers have posted 0.59% in gains. This is on the heels of a red-hot August, when readers took in a blistering hot 5.86% profit. The three and a half year return is … [Read more...]

The Bipolar Economy

theatre-mask1

Corporate earnings are up big! Buy! No wait! The economy is going down the toilet! Sell! Buy! Sell! Buy! Sell! Help!! Anyone would be forgiven for thinking that the stock market has become bipolar. There is, in fact, an explanation for this madness. According to the Commerce Department’s Bureau of Economic Analysis, the answer is that corporate profits accounts for only a … [Read more...]

September 11, 2014

Global Market Comments September 11, 2014 Fiat Lux Featured Trade: (THURSDAY OCTOBER 9 INCLINE VILLAGE, NEVADA STRATEGY LUNCHEON), (IS THE 30-YEAR MORTGAGE AN ENDANGERED SPECIES?), (HANGING OUT WITH THE WOZ), (AAPL), Apple Inc. (AAPL) … [Read more...]

Is the 30-Year Mortgage and Endangered Species?

Home Mansion

One of the great anomalies of the American credit markets has always been the existence of the 30-year fixed rate home mortgage. Long the favorite of homeowners, it has financed the majority of US residential property purchases since a Depression era housing stimulus program created them in 1938. That is until now. A perfect storm of institutional, political and economic … [Read more...]

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...]

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...]

The Bond Crash Has Only Just Started

Grandpa Thomas

When I was a little kid in the early 1950’s, my grandfather used to endlessly rail against Franklin Delano Roosevelt. The WWI veteran, who was mustard gassed in the trenches of France and was a lifetime, died in the wool Republican, said the former president was a dictator and a traitor to his class, who trampled the constitution with complete disregard. Candidates Hoover, … [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...]

Don’t Miss the September 10 Global Strategy Webinar

John Thomas

My next global strategy webinar will be held live from San Francisco on Wednesday, September 10 at 12:00 PM EDT.  Mad Day Trader, Jim Parker, will be my willing coconspirator to provide his expert short term trading ideas and comment in general on the markets as a whole. I’ll be giving you my updated outlook on stocks, bonds, commodities, currencies, precious metal, and real … [Read more...]

Why Activists Have the Upper Hand

Carl Icahn

Having been in this market for yonks, ages, and even a coon’s age, I have seen trading strategies come and go. First, there was the nifty fifty during the 1960’s. Junk bonds had their day in the sun. Then portfolio insurance was all the rage. While the dollar was weak, international diversification was the flavor of the day. After foreign stocks turned bitter, the IPO mania … [Read more...]

India is Catching Up With China

Rickshaw

When I first visited Calcutta in 1976, 800,000 people were sleeping on the sidewalks, I was hauled everywhere by a very lean, barefoot rickshaw driver, and drinking the water out of a tap was tantamount to committing suicide. Some 35 years later, and the subcontinent is poised to overtake China’s white hot growth rate. My friends at the International Monetary Fund issued a … [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

Brokers

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...]

Why Water Will Soon Become More Valuable Than Oil

Waterfall

If you think that an energy shortage is bad, it will pale in comparison to the next water crisis. So investment in fresh water infrastructure is going to be a great recurring long-term investment theme. One theory about the endless wars in the Middle East since 1918 is that they have really been over water rights. Although Earth is often referred to as the water planet, only … [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

Matzos

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...]

What’s Really Happening in the Middle East

Missile

Long-term observers of financial markets are befuddled, confused, and amazed at their complete lack of interest in the rapidly unfolding events in the Middle East. It seems that the more horrific the atrocities, the higher stock prices want to climb. Go figure. ISIS is in fact accelerating the most important geopolitical event so far in this century, the rapprochement of … [Read more...]

September 3, 2014

Global Market Comments September 3, 2014 Fiat Lux Featured Trade: (THE CASE FOR BUYING FINANCIALS) (BAC), (C), (AXP), (TLT), (THE MYSTERY OF THE BRASHER DOUBLOON), (TESTIMONIAL) Bank of America Corporation (BAC) Citigroup Inc. (C) American Express Company (AXP) iShares 20+ Year Treasury Bond (TLT) … [Read more...]

The Case for Buying Financials

John Thomas and Barney Frank

Regular readers of this letter are probably weary of me harping away about the financials as a great place to put your money for the rest of 2014. Never mind that these names have all jumped 10% in the past month. But this is not an “I told you so” story. This is more of a “But wait, there’s more,” story. The basis for my call is quite simple. I believe that bond prices are … [Read more...]

The Mystery of the Brasher Doubloon

Brasher Doubloon

I’ll never forget when my friend, Don Kagin, one of the world’s top dealers in rare coins, walked into the gym one day and announced that he made $1 million that morning.  I enquired “How is that, pray tell?” He told me that he was an investor and technical consultant to a venture hoping to discover the long lost USS Central America, which sunk in a storm off the Atlantic … [Read more...]

September 2, 2014

Global Market Comments September 2, 2014 Fiat Lux Featured Trade: (TACKLING THE INFLATION MYTH), (AAPL), (GOOG), (TWTR), (FB), (THE BULL MARKET IN AMERICAN COLLEGE DEGREES) Apple Inc. (AAPL) Google Inc. (GOOG) Twitter, Inc. (TWTR) Facebook, Inc. (FB) … [Read more...]

Tackling the Low Inflation Myth

David Stockman

I have long told my listeners at conferences, webinars and strategy luncheons my definition of the “new inflation”: The price for whatever you have to buy is rising, as with energy, health care and a college education. The price of the things you need to sell, such as your labor and services, is falling. So while official government numbers show that the overall rate of … [Read more...]

The Bull Market in American College Degrees

Graduation Cap

I recently spent a weekend attending a graduation in Washington State, a stone’s throw from where the 2010 Vancouver Winter Olympics were held. While sitting through the tedious reading of 550 names, I was struck by how many seemed to come from abroad. As I listened to the wailing ceremonial bagpipes, I did several calculations on the back of the commencement program and was … [Read more...]

September 1, 2014

Global Market Comments September 1, 2014 Fiat Lux Featured Trade: (SALUTING THE “OLD BREED”) (WHERE THE ECONOMIST “BIG MAC” INDEX FINDS CURRENCY VALUE), (MCD), (FXE), (YCS), (FXF), (CYB) (TESTIMONIAL) McDonald's Corp. (MCD) CurrencyShares Euro ETF (FXE) … [Read more...]

Saluting the “Old Breed”

The Pacific by Hugh Ambrose

It was with a mixture of nostalgia and awe that I attended the reunion luncheon celebrating the 72nd anniversary of America’s invasion of Guadalcanal. The event was hosted by my former division commander in Desert Storm, Major General Mike Myatt, at the Marines Memorial Association in San Francisco. I was there to represent the family. My Uncle, Colonel Mitchell Paige, won … [Read more...]

Where The Economist “Big Mac” Index Finds Currency Value

mcdonaldsJapan

My former employer, The Economist, once the ever tolerant editor of my flabby, disjointed, and juvenile prose (Thanks Peter and Marjorie), has released its “Big Mac” index of international currency valuations. Although initially launched by an imaginative journalist as a joke three decades ago, I have followed it religiously and found it an amazingly accurate predictor of … [Read more...]

August 29, 2014

Global Market Comments August 29, 2014 Fiat Lux Featured Trade: (MAKING HAY WITH THE EAGLE FORD SHALE), (USO), (UNG), (XOM), (CVX), (LNG), (CHK), (HAL) (THE PASSING OF A GREAT MAN) United States Oil (USO) United States Natural Gas (UNG) Exxon Mobil Corporation (XOM) Chevron Corporation (CVX) Cheniere Energy, Inc. (LNG) Chesapeake Energy Corporation … [Read more...]

Making Hay in the Eagle Ford Shale

House

Sell the shovels to the gold miners. That was the lesson of the 1849 California gold rush. How many individual gold miners can you name today? How about none, unless you are an expert on the obscure street names of San Francisco. And the companies that sold supplies and services to them? Try Wells Fargo (WFC), Bank of America (BAC), Union Pacific (UNP), and Levi Strauss. Some … [Read more...]

The Passing of a Great Man

Bob

It was with a heavy heart that I boarded a plane for Los Angeles to attend a funeral for Bob, the former scoutmaster of Boy Scout Troop 108. The event brought a convocation of ex-scouts from up and down the West coast, and said much about our age. Bob, 85, called me two weeks ago to tell me his CAT scan had just revealed advanced metastatic lung cancer. I said … [Read more...]

August 28, 2014

Global Market Comments August 28, 2014 Fiat Lux Featured Trade: (TAKING A LOOK AT SOLAR CITY), (SCTY), (TSLA), (PCG) (SAN FRANCISCO’S SUFFERING RENTERS TAKE ANOTHER HIT) SolarCity Corporation (SCTY) Tesla Motors, Inc. (TSLA) PG&E Corporation (PCG) … [Read more...]

Taking a Look at Solar City

John Thomas - Tesla

In recent weeks, I couldn’t help but notice the green and white vans of Solar City (SCTY) visiting my neighbors. My trader’s radar went up, so I thought there might be an opportunity here. With my second Tesla (TSLA) about to be delivered, the Model X SUV, it was time for me to review my electricity bill. My first Tesla, an S-1, boosted my monthly power consumption from 600 … [Read more...]

San Francisco’s Suffering Renters Take Another Hit

Apt. Building

The San Francisco Bay area’s beleaguered renting class moaned again when the social media giant, Twitter (TWTR) finally went public. The deal immediately placed $1.82 billion into the pockets of early shareholders, almost all of whom live near the company’s San Francisco headquarters. This is adding insult to injury to those in the region who are desperately seeking a home. … [Read more...]

August 27, 2014

Global Market Comments August 27, 2014 Fiat Lux Featured Trade: (WHAT TO DO ABOUT APPLE?), (AAPL), (THE PARTY IS JUST GETTING STARTED WITH THE JAPANESE YEN), (FXY), (YCS), (DXJ) Apple Inc. (AAPL) CurrencyShares Japanese Yen ETF (FXY) ProShares UltraShort Yen (YCS) WisdomTree Japan Hedged Equity ETF (DXJ) … [Read more...]

What to Do About Apple?

iPhones

Those who followed my advice to buy Apple a year ago are now drowning in riches (click here for “Buy Apple on the Dip”). Since the July, 2013 bottom, the shares have risen by a meteoric 92%. It is the largest company in the world once again. As a result, I have heard of my readers shopping for second homes on Lake Tahoe, sponsoring NASCAR teams, or buying new Rolex watches for … [Read more...]

The Party is Just Getting Started With the Japanese Yen

Japanese Lady-Sad

“Oh, how I despise the yen, let me count the ways.” I’m sure Shakespeare would have come up with a line of iambic pentameter similar to this if he were a foreign exchange trader. I firmly believe that a short position in the yen should be at the core of any hedged portfolio for the next decade. To remind you why you hate the currency of the land of the rising sun, I’ll refresh … [Read more...]

August 26, 2014

Global Market Comments August 26, 2014 Fiat Lux Featured Trade: (AUGUST 27 GLOBAL STRATEGY WEBINAR), (WHY I’M COVERING SOME EURO SHORTS), (FXE), (EUO), (THAT WAS SOME SHAKER!) CurrencyShares Euro ETF (FXE) ProShares UltraShort Euro (EUO) … [Read more...]

Why I’m Covering Some Euro Shorts

Falling 100 Bills-Euros

We have snatched 92% of the potential profit in the Currency Shares Euro Trust (FXE) September, 2014 $133-$135 in-the-money bear put spread, riding the Euro (FXE) down on the short side, from $1.33 down to $1.30. The risk/reward of continuing with such a large position is no longer justified. So I am going to reduce my overweight position down from 20% back to a more normal … [Read more...]

That was Some Shaker!

Napa Valley Earthquake 8-2014

Wow! There is nothing like being tossed out of bed at 3:20 AM by a massive earthquake! It really gets the juices flowing. I was really praying that the wooden roof creaking and groaning above was not about to land on my head. After hurriedly getting dressed, I grabbed a flashlight and ran downstairs to check the gas lines and water mains. So far, so good. Compliant with … [Read more...]

August 25, 2014

Global Market Comments August 25, 2014 Fiat Lux Featured Trade: (MY END 2014 STOCK MARKET FORECAST), (SPY), (ALL I WANT TO DO IS RETIRE), (TAKE A LOOK AT OCCIDENTAL PETROLEUM), (OXY), (BP), (OIL), (UNG),  (NSANY), (XOM) SPDR S&P 500 (SPY) Occidental Petroleum Corporation (OXY) BP plc (BP) iPath S&P GSCI Crude Oil TR ETN (OIL) United States Natural Gas … [Read more...]

My End 2014 Stock Market Forecast

Uncle Sam - Fist

If anyone had any doubts about the future direction of stocks this year, you better take a look at the chart below for the S&P 500. It shows a very convincing trend upward at almost a perfect 45-degree angle going back for the past year. The range is 100 points wide. It’s almost as if an architect drew it with drafting tools. To take maximum advantage of this trend, you … [Read more...]

All I Want to do is Retire

Dollar in Vice

I have always believed that if you don’t have a sense of humor, then you better get the hell out of this business. Below is a link to a YouTube video entitled “All I Want to do is Retire” which covers the decline of the brokerage industry over the last 20 years. The video is currently going viral, with 87,000 views so far, and was sent to me by a subscriber. Watch this … [Read more...]

Take a Look at Occidental Petroleum (OXY)

Faberge Egg

There are a lot of belles at the ball, but you can’t dance with all of them. While a student at UCLA in the early seventies, I took a World Politics course, which required me to pick a country, analyze its economy, and make recommendations for its economic development. I chose Algeria, a country where I had spent the summer of 1968 caravanning among the Bedouins, crawling out … [Read more...]

Mixing with the 1% at Pebble Beach

Ferrari 375 MM Scaglietti Coupe

On the right was my friend’s 1958 Ferrari Testa Rossa Scaglietta. On my left was a 1929 Dusenberg Murphy convertible sedan with a V-12 engine. I just walked past a 1914 Rolls Royce Silver Ghost Portholme Alpine Tourer. Yes, it’s August in Pebble Beach, California, and that can only mean one thing. It’s time for another Concourse d’ Elegance car show. This is my annual … [Read more...]

August 21, 2014

Global Market Comments August 21, 2014 Fiat Lux Featured Trade: (WHY US STOCKS ARE DIRT CHEAP), (SPY), (IWM), (QQQ), (TSLA) SPDR S&P 500 (SPY) iShares Russell 2000 (IWM) PowerShares QQQ (QQQ) Tesla Motors, Inc. (TSLA) … [Read more...]

Why US Stocks Are Dirt Cheap

JT with Tesla

Many commentators are warning of a top, a bubble and Armageddon to come in the stock market. There has not been a 10% correction in the indexes since the debt ceiling crisis three years ago. But I think that we are just getting started. Share prices have the rocket fuel for the Dow average to make it to 18,000 by the end of 2014, and possibly 100,000 by 2025. To understand … [Read more...]

August 20, 2014

Global Market Comments August 20, 2014 Fiat Lux Featured Trade: (THE EURO BREAKS DOWN), (FXE), (EUO), (TLT), (APPLE BREAKS $100), (AAPL) CurrencyShares Euro ETF (FXE) ProShares UltraShort Euro (EUO) iShares 20+ Year Treasury Bond (TLT) Apple Inc. (AAPL) … [Read more...]

The Euro Breaks Down

Mario Draghi

You usually don’t expect US housing data to cause the collapse of a foreign currency. But that is exactly what happened this morning. The announcement by the Census Bureau that new home stats for July came in at a breathtaking 1.09 million, up 15.7%, blew away even the optimistic forecasts. Earlier figures for June were revised up substantially. New building permits for July … [Read more...]

Apple Breaks $100

Gibraltar

Since I am in a major patting myself on the back mood, I thought I would rerun a piece I ran last October entitled “Apple is Ready to Explode”. This is back when the shares were trading at a lowly $490 a share. Since then I have been urging readers to get in on the long side at every opportunity. They are now up a mind boggling 43% from that timely recommendation. They are … [Read more...]

August 19, 2014

Global Market Comments August 19, 2014 Fiat Lux Featured Trade: (WHY WE DON’T CARE ABOUT OIL), (USO), (UNG) (AUSTERITY HITS WALL STREET) (THE TWELVE DAY YEAR) United States Oil (USO) United States Natural Gas (UNG) … [Read more...]

Why We Don’t Care About Oil

Man-Oil Bottles

There’s nothing like seeing your long term forecasts vindicated. When I warned the oil majors in the late 1990’s that fracking technology was about to change their world beyond all recognition, they told me I was out of my tree, in the politest way possible, of course. Their argument was that the technology was untested, unproven, and a huge liability risk. If they accidently … [Read more...]

Austerity Hits Wall Street

ny-taxi-cabs

This year, your bonus is that you get to keep your job. That is the bad news that will be dished out to many disappointed staff during annual reviews at the major Wall Street firms this year. We all know that volumes have been trading at subterranean levels, which have created a real draught of commission incomes. New regulations imposed by Dodd-Frank and the Volker rule mean … [Read more...]

The Twelve Day Year

Man Sleeping on Couch

I have reported in the past on the value of the Friday-Monday effect, whereby the bulk of the year's performance can be had through buying the Friday close in the stock market and then selling the Monday close (click here for “The Friday-Monday Effect Exposed”). Well, I have discovered a further distillation of this phenomenon. During 2010, the S&P 500 rose by 143 points. … [Read more...]

August 18, 2014

Global Market Comments August 18, 2014 Fiat Lux Featured Trade: (MAD HEDGE FUND TRADER SETS NEW ALL TIME HIGH WITH 27% GAIN IN 2014), (SPY), (TLT), (TBT), (FXE), (EUO), (WILL GOLD SUFFER THE FATE OF THE $10,000 BILL?) (GLD), (GDX) SPDR S&P 500 (SPY) iShares 20+ Year Treasury Bond (TLT) ProShares UltraShort 20+ Year Treasury (TBT) CurrencyShares Euro ETF … [Read more...]

Mad Hedge Fund Trader Sets New All Time High with 27% Gain in 2014

John Thomas

If you think this letter is being written by someone who is stoned, you’d be at least partially right this morning. For that is the after effect of my attending the Paul McCartney concert at Candlestick Park in San Francisco last night. I was sitting in the infield in the most expensive $1,000 seats, well attended by Silicon Valley royalty. Excuse me Mr. Cook, can I please get … [Read more...]

Will Gold Coins Suffer the Fate of the $10,000 Bill?

ten-thousand-10000-dollar-bill

The conspiracy theorists will love this one. Buried deep in the bowels of the 2,000 page health care bill was a new requirement for gold dealers to file Form 1099's for all retail sales by individuals over $600. Specifically, the measure can be found in section 9006 of the Patient Protection and Affordability Act of 2010. For foreign readers unencumbered by such concerns, … [Read more...]

August 15, 2014

Global Market Comments August 15, 2014 Fiat Lux Featured Trade: (BONDS OR STOCKS: WHO’S RIGHT?), (TLT), (TBT), (SPY), (WHO SAYS THERE AREN’T ANY JOBS?), (TESTIMONIAL) iShares 20+ Year Treasury Bond (TLT) ProShares UltraShort 20+ Year Treasury (TBT) SPDR S&P 500 (SPY) … [Read more...]

Bonds or Stocks: Who’s Right?

Wrong-Right  Sign

Treasury bonds spike to new one year highs, closing at a 2.40% yield, and trading as low as a 2.30% yield in the overnight market at one point last week. Clearly, serious deflation is continuing for the indefinite future. Buy more bonds! US corporate profits are at all time highs, just closing one of the strongest reporting periods in history. What’s more, the outlook they … [Read more...]

Who Says There Aren’t Any Jobs?

Marlon Brando

While recently winging my way across the South Pacific a few months ago, I spotted an unusual job offer: WANTED: Social worker, tax free salary of $60,000 with free accommodation and transportation, no experience necessary, must be flexible and self-sufficient. With the unemployment rate at 6.2%, and running as high as 45% for recent college grads, I was amazed that they were … [Read more...]

August 14, 2014

Global Market Comments August 14, 2014 Fiat Lux Featured Trade: (HOW THE UKRAINE CRISIS WILL PLAY OUT), (USO), (UNG), (WMT), (AAPL), (MCD) (MY PERSONAL ECONOMIC INDICATOR), (HMC), (NSANY), (GM), (F), (TSLA) United States Oil (USO) United States Natural Gas (UNG) Wal-Mart Stores Inc. (WMT) Apple Inc. (AAPL) McDonald's Corp. (MCD) Honda Motor Co., Ltd. (HMC) Nissan … [Read more...]

How the Ukraine Crisis Will Play Out

McDonalds Russia

I can tell you exactly how the crisis in the Ukraine is going to play out. This has major implications for the global economy, financial markets and your personal portfolio, so listen up! The key to deciphering this puzzle is oil, far and away Russia’s largest export. At 10 million barrels a day, the country is taking in $360 billion a year in revenues from oil shipments. You … [Read more...]

My Personal Leading Economic Indicator

Honda Car Lot

There is no limit to my desire to get an early and accurate read on the US economy, which at the end of the day is what dictates the future of all of our investments. I flew over one of my favorite leading economic indicators only yesterday. Honda (HMC) and Nissan (NSANY) import millions of cars each year through their Benicia, California facilities, where they are loaded on … [Read more...]

August 13, 2014

Global Market Comments August 13, 2014 Fiat Lux Featured Trade: (A SAD FAREWELL TO ROBIN WILLIAMS), (THE CASE AGAINST TREASURY BONDS), (TBT), (TLT), (MUB), (LQD), (LINE), (A NOTE ON THE FRIDAY OPTIONS EXPIRATION), (TLT) ProShares UltraShort 20+ Year Treasury (TBT) iShares 20+ Year Treasury Bond (TLT) iShares National AMT-Free Muni Bond (MUB) iShares iBoxx $ Invst … [Read more...]

A Sad Farewell to Robin Williams

Robin Williams

Sorry to get the letter out late this morning, but I am still reeling the passing of my old friend, comedian Robin Williams. I heard about it last night on the radio, while on my nightly hike on nearby Grizzly Peak. His mother lived directly next door to my family for many years. A petite widow in her late seventies, we often looked in on her, and invited her into our … [Read more...]

The Case Against Treasury Bonds

Uncle Sam

My friend, Texan money manager Mike Robertson, asked me the other day if there was one asset class that I truly despised. I didn’t hesitate: bonds. In fact, fixed income investments are about to regain the nickname they earned during the 1980’s: “certificates of wealth confiscation.” With the ten year Treasury bond yield at a microscopic 2.40%, and 3.25% for the 30 year, you … [Read more...]

A Note on the Friday Options Expiration

John Thomas

We have a couple of options positions that expire on Friday, and I just want to explain to the newbies how to best maximize their profits. These include: iShares Barclay 20+ Year Treasury Bond Fund (TLT) August, 2014 $115-$118 in-the-money bear put spread with a cost of $2.70 iShares Barclay 20+ Year Treasury Bond Fund (TLT) August, 2014 $117-$120 in-the-money bear put … [Read more...]

August 12, 2014

Global Market Comments August 12, 2014 Fiat Lux Featured Trade: (AUGUST 13 GLOBAL STRATEGY WEBINAR), (THE COST OF AN AGING WORLD), (EWJ), (EWI), (EWG), (EWQ), (EWL), (EWU), (PIN), (TESTIMONIAL) iShares MSCI Japan (EWJ) iShares MSCI Italy Capped (EWI) iShares MSCI Germany (EWG) iShares MSCI France (EWQ) iShares MSCI Switzerland Capped Index (EWL) iShares MSCI United … [Read more...]

The Cost of an Ageing World

Regular readers of this letter are well aware of my fascination with demographics as a market driver. They go a long way towards explaining if asset prices are facing a long-term structural headwind or tailwind. The great thing about the data is that you can get precise, high quality numbers 20, or even 50 years in advance. No matter how hard governments may try, you can’t … [Read more...]

August 11, 2014

Global Market Comments August 11, 2014 Fiat Lux Featured Trade: (IS THE TURNAROUND AT HAND, AND TEN STOCKS TO BUY AT THE BOTTOM?), (SPX), (TLT), (UNLOADING MORE EUROS), (FXE), (EUO), (I’M BACK FROM EUROPE!) S&P 500 Index (SPX) iShares 20+ Year Treasury Bond (TLT) CurrencyShares Euro ETF (FXE) ProShares UltraShort Euro (EUO) … [Read more...]

Is the Turnaround at Hand, and Ten Stocks to Buy at the Bottom?

Gun-Ammunition-War Room

War threatens in the Ukraine. Iraq is blowing up. Rebels are turning our own, highly advanced weapons against us. Israel invades Gaza. Ebola virus has hit the US. Oh, and two hurricanes are hitting Hawaii for the first time in 22 years. Should I panic and sell everything I own? Is it time to stockpile canned food, water and ammo? Is the world about to end? I think not. In … [Read more...]