March 27, 2013

Global Market Comments March 27, 2013 Fiat Lux Featured Trade: (APRIL 12 SAN FRANCISCO STRATEGY LUNCHEON), (WHY WARREN BUFFETT HATES GOLD),  (GLD), (GDX), (ABX), (US HEADED TOWARDS ENERGY INDEPENDENCE), (USO), (UNG), (XOM), (OXY), (KOL), (A TOUCHDOWN FOR USC) SPDR Gold Shares (GLD) Market Vectors Gold Miners ETF (GDX) Barrick Gold Corporation (ABX) United States … [Read more...]

April 12 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, April 12, 2013. 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...]

Why Warren Buffet Hates Gold

Gold Coin

The 'Oracle of Omaha' expounded at length today on why he despises the barbarous relic. The sage doesn't really care about the yellow metal, whatever the price. He sees it primarily as a bet on fear. If investors are more afraid in a year than they are today, then you make money. If they aren't, then you lose money. If you took all the gold in the world, it would form a cube … [Read more...]

US Headed Towards Energy Independence

Man covered in Oil

My inbox was clogged with responses to my recent prediction of US energy independence. This will be the most important change to the global economy for the next 20 years. So I shall go into more depth. The energy research house, Raymond James, put out an estimate that domestic American oil production (USO) would rise from 5.6 million barrels a day to 9.1 million by 2015. … [Read more...]

A Touchdown for USC

David and Dana Dornsife

One of my many alma maters, the University of Southern California, announced that they had received their largest private donation in history. As a third generation alumni of this fanatical football factory (I went to school with Mark Harmon, Lynn Swan, and, oops, OJ Simpson), I still receive their alumni newsletter, where I learned the good news. David and Dana Dornsife … [Read more...]

March 26, 2013

Global Market Comments March 26, 2013 Fiat Lux Featured Trade: (MAY 8 LAS VEGAS STRATEGY LUNCHEON), (HERE COMES THE ROLLING TOP), (VIX), (BAC), (UAL), (SPX), (IWM), (A DIFFERENT VIEW OF THE US) VOLATILITY S&P 500 (VIX) Bank of America Corporation (BAC) United Continental Holdings, Inc. (UAL) S&P 500 Large Cap Index (SPX) iShares Russell 2000 Index (IWM) … [Read more...]

May 8 Las Vegas Strategy Luncheon

las-vegas-welcome-sign

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in Las Vegas, Nevada on Wednesday, May 8, 2013. 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. I … [Read more...]

Here Comes the Rolling Top

Gorilla

The S&P 500 is now at 1,564, and most strategist forecasts for the end of 2013 hover around 1,550-1,600, plus or minus some spare change. So the next nine months are going to be incredibly boring. Or they won’t. Even in a bull market, one expects to see pullbacks of at least one third of the recent gain. Apply that logic towards the 224 points the (SPX) has tacked on … [Read more...]

A Different View of the US

US GDP

My mother lives in Pakistan, my daughter in Greece, and I have a ski chalet 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 of the United States prepared by my esteemed former employer, The Economist magazine, renaming each state with its international equivalent in … [Read more...]

Airline Stocks Are Cleared for Take Off

3.21.2013 B

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 … [Read more...]

March 22, 2013

Global Market Comments March 22, 2013 Fiat Lux Featured Trade: (BUY EVERY BLACK SWAN), (SPY), (QQQ), (IWM), (AAPL), (UAL) (REVISITING CHENIERE ENERGY), (LNG), (UNG), (USO), (DVN), (CHK) SPDR S&P 500 (SPY) PowerShares QQQ (QQQ) iShares Russell 2000 Index (IWM) Apple Inc. (AAPL) United Continental Holdings, Inc. (UAL) Cheniere Energy, Inc. (LNG) United States … [Read more...]

Buy Every Black Swan

Ben Bernanke

At least that’s what Ben Bernanke thinks. He said as much in his press conference yesterday in the wake of the latest Fed statement. He might as well have waved a red Flag at a bull. The central bank took the opportunity to downgrade its US growth forecasts going forward as a result of sequestration imposed government spending cuts. What is impressive is how minimal the … [Read more...]

Revisiting Cheniere Energy (LNG)

Homes - rubble

Occasionally, I so totally knock the ball out of the park that I qualify for a place in the stock picker’s Hall of Fame. That was the case when I put out a recommendation to buy LNG exporter, Cheniere Energy (LNG), a year ago (click here  for Take a Look at Cheniere Energy (LNG). Since then, the stock has soared an eye popping 85%. The great thing here is that I think the … [Read more...]

March 21, 2013

Global Market Comments March 21, 2013 Fiat Lux Featured Trade: (TRADE ALERT SERVICE SEIZES 31.8% GAIN IN 2013), (SPY), (FXY), (IWM, (BAC), (AIG), (FCX), (FXE), (FXB), (GLD), (USO), (THE BULL CASE FOR BANK OF AMERICA), (BAC), (WHEN STERILIZATION IS NOT A FORM OF BIRTH CONTROL), (TLT), (PCY), (MUB), (JNK), (TESTIMONIAL) SPDR S&P 500 (SPY) CurrencyShares Japanese … [Read more...]

Trade Alert Service Seizes 31.8% Profit in 2013

SPX

The Trade Alert Service of the Mad Hedge Fund Trader has posted a 31.8% profit year to date, taking it to another new all time high. The 27-month total return has punched through to an awesome 86.9%, compared to a miserable 18.5% return for the Dow average during the same period. That raises the average annualized return for the service to 36.5%, elevating it to the pinnacle of … [Read more...]

The Bull Case for Bank of America

BAC Poster

I’ll give you the quick and dirty argument behind buying Bank of America. For the past four years, the main argument for avoiding this stock like the plague was the hidden book of bad home loans it was hiding on its back bookshelf, thought to be in the tens of billions of dollars. This is why the shares spent most of the last half decade trading at a pitiful 50% of its book … [Read more...]

When Sterilization is Not a Form of Birth Control

Pills

I received a flurry of inquires the other day when Ben Bernanke mentioned the word “sterilization” in his recent congressional testimony. And he wasn’t giving advice to the country’s wayward teenaged girls, either. Sterilization refers to a specific style of monetary policy. Sterilized policies seek to manipulate the money markets without changing the overall money supply. … [Read more...]

March 20, 2013

Global Market Comments March 20, 2013 Fiat Lux Featured Trade: (THE RECEPTIONS THE STARS FELL UPON), (NLR), (CCJ), (CORN), (WEAT), (SOYB), (DBA), (BECOME MY FACEBOOK FRIEND), (OIL ISN’T WHAT IT USED TO BE), (USO), (DIG), (DUG) Market Vectors Uranium+Nuclear Enrgy ETF (NLR) Cameco Corporation (CCJ) Teucrium Corn (CORN) Teucrium Wheat (WEAT) Teucrium Soybean … [Read more...]

The Reception the Stars Fell Upon

Atomic Explosion

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 former Senate Armed Services Chairman Sam Nunn. I said I’d be there … [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 1,448 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

Horse Drawn Car

Virtually every analyst has been puzzled by the seeming immunity of stock markets to soaring oil prices (USO), (DIG), (DUG) this year. In fact, stocks and crude have been tracking almost one to one on the upside. The charts below a friend at JP Morgan sent me go a long way towards explaining this apparent dichotomy. The first shows the number of barrels of oil needed to … [Read more...]

March 19, 2013

Global Market Comments March 19, 2013 Fiat Lux Featured Trade: (BUY STOCKS ON THE CYPRUS DIP), (SPX), (SPY), (INVESTORS WILL WIN THE ETF PRICE WAR), (BIDDING FOR THE STARTS), (THE DEATH OF THE MUTUAL FUND) S&P 500 Large Cap Index (SPX) SPDR S&P 500 (SPY) … [Read more...]

Buy Stocks on the Cyprus Dip

Aircraft Carriers

I’ll never forget the last time I was in Cyprus. I landed my twin Cessna 340 and asked for a fill up, hoping to make it back to Rome in one hop. An hour later, a truck dumped three 45-gallon drums of 100LL avgas on the tarmac with a hand pump, and asked to be paid in US dollars, cash. When I asked how to get the fuel into the plane, the driver responded with a rotating … [Read more...]

Investors Will Win the ETF Price War

Hannibal Lecter

Many hedge fund traders are unhappy about the current near monopoly enjoyed by the top three ETF issuers, Black Rock, State Street, and Vanguard, which control 80% of the market. At last count more than 1,300 ETF’s were capitalized at more than $1.4 trillion. The result has been grasping management fees, exorbitant expense ratios, and poor structural designs, which create … [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, who shall remain nameless. Suffice to say, … [Read more...]

The Death of the Mutual Fund

Downsizing poster

ETF’s are much more attractive than mutual fund competitors, with their notoriously bloated expenses and spendthrift marketing costs. You can’t miss those glitzy, overproduced, big budget ads on TV for a multitude of mutual fund families. You know, the ones with the senior couple holding hands walking down the beach into the sunset, the raging bulls, etc.? You are the sucker … [Read more...]

March 18, 2013

Global Market Comments March 18, 2013 Fiat Lux Featured Trade: (MARCH 20 GLOBAL STRATEGY WEBINAR), (HAS APPLE BOTTOMED?), (AAPL), (TESTIMONIAL), (SOVEREIGN DEBT WAS A GREAT PLACE TO HIDE),  (PCY), (LQD) Apple Inc. (AAPL) PowerShares Emerging Mkts Sovereign Debt (PCY) iShares iBoxx $ Invest Grade Corp Bond (LQD) … [Read more...]

Don’t Miss the March 20 Global Strategy Webinar

Robin Williams

My next global strategy webinar will be held on Wednesday, March 20 at 12:00 noon EST. This one will be open to the public, so login in early to get a space. I’ll be giving you my updated outlook on stocks, bonds, commodities, currencies, precious metal, and real estate. The goal is to find the cheapest assets in the world to buy, the most expensive to sell short, and the … [Read more...]

Has Apple Hit Bottom?

apple_logo_rainbow_6_color

No one has suffered more than I from my slavish devotion to Apple’s products, its performance, and, oops…. it’s stock. A long position in Steve Jobs’ creation remains my only losing position of 2013 (remember the January $525-$575 call spread?). Without the hit I took on that, my Trade Alert Service would be up 33.3% so far this year, instead of only 31%. By comparison, the … [Read more...]

Sovereign Debt Was a Great Place to Hide

Marilyn Monroe

I am constantly asked where to find safe places to park cash by investors understandably unhappy with the risk/reward currently offered by the markets. Any reach for yield now carries substantial principal risk, the kind we saw, oh say, in the summer of 2007. I have had great luck steering people into the Invesco PowerShares Emerging Market Sovereign Debt ETF (PCY) for the … [Read more...]

March 15, 2013

Global Market Comments March 15, 2013 Fiat Lux Featured Trade: (TAKING PROFITS ON STOCKS), (SPY), (TAKING A BITE OUT OF STEALTH INFLATION), (TESTIMONIAL) SPDR S&P 500 (SPY) … [Read more...]

Taking Profits on Stocks

Man - Toothless

With the (SPY) approaching an all time high, there are just a few pennies to go, I am going to take the money and run on my position in the SPDR S&P 500 (SPY) April, 2013 $145-$150 deep in-the-money bull call spread. At $4.97, there is only 3 cents left in potential profit, and I would have to run the position for another month to get it. We have already captured 93% of the … [Read more...]

Taking a Bite Out of Stealth Inflation

Girlscout Cookies

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...]

March 14, 2013

Global Market Comments March 14, 2013 Fiat Lux Featured Trade: (2013 STRATEGY LUNCHEON SCHEDULE), (THE ELTON JOHN MARKET), (SPY), (RAMPANT WAGE INFLATION STRIKES CHINA), (FXI), (CYB) SPDR S&P 500 (SPY) iShares FTSE China 25 Index Fund (FXI) WisdomTree Chinese Yuan (CYB) … [Read more...]

2013 Strategy Luncheon Schedule

Come join me for lunch at the Mad Hedge Fund Trader’s Global Strategy Luncheons, which I will be conducting throughout the US and Europe over the next five months. 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 … [Read more...]

The Elton John Market

Elton John

I remember 1997 like it was yesterday. Bill Clinton was president, the US government was running a balanced budget, and the Dotcom IPO bubble parties in Silicon Valley were happening almost every day. The Florida Marlins beat the Cleveland Indians in a seven game World Series, where the last game went to a heart stopping 11 innings. Elton John scored the top hit of the year … [Read more...]

Rampant Wage Inflation Strikes China

Chinese Men

I rely on hundreds of 'moles' around the world whose job it is to watch a single, but important indicator for the world economy. One of them checks for me the want ads in the manufacturing mega city of Shenzhen, China, and what he told me last week was alarming. Wage demands by Chinese workers have been skyrocketing this year. The biggest increases have been at the low end … [Read more...]

March 13, 2013

Global Market Comments March 13, 2013 Fiat Lux Featured Trade: (APRIL 12 SAN FRANCISCO STRATEGY LUNCHEON), (BLACK SWANS ARE CIRCLING), (SPX), (A COW BASED ECONOMICS LESSON) S&P 500 Large Cap Index (SPX) … [Read more...]

April 12 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, April 12, 2013. 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...]

Black Swans Are Circling

The Birds, Crows

Basking in the glow of my 31% gain so far this year, I have to start wondering what could go wrong. Call me a pessimist, a paranoid, and worrywart, but whenever things got this good in the past, they were about to turn very bad. It is not my intention to ruin your day. But I may well do that if you read the rest of this piece. Traders are piling on new longs with reckless … [Read more...]

A Cow Based Economics Lesson

Cow

SOCIALISM You have 2 cows. You give one to your neighbor. COMMUNISM You have 2 cows. The State takes both and gives you some milk. FASCISM You have 2 cows. The State takes both and sells you some milk. NAZISM You have 2 cows. The State takes both and shoots you. BUREAUCRATISM You have 2 cows. The State takes both, shoots one, milks the other, and then … [Read more...]

March 12, 2013

Global Market Comments March 12, 2013 Fiat Lux Featured Trade: (TRADE ALERT SERVICE ROCKETS TO 30% GAIN IN 2013), (SPY), (IWM), (F), (AIG), (FCX), (FXY), (YCS),  (FXB), (FXE), (EUO), (VIX) (LOAD THE BOAT WITH THE CHINESE YUAN), (CYB), (HOW TO AVOID THE PONZI SCHEME TRAP), (TESTIMONIAL) SPDR S&P 500 (SPY) iShares Russell 2000 Index (IWM) Ford Motor Co. … [Read more...]

Trade Alert Service Rockets 30.6% in 2013

FXY 3-11-13

The Trade Alert Service of the Mad Hedge Fund Trader has posted a 30.64% profit year to date, taking it to another new all time high. The 27-month total return has punched through to an awesome 86%, compared to a miserable 10% return for the Dow average during the same period. That raises the average annualized return for the service to 38%, elevating it to the pinnacle of … [Read more...]

Load the Boat With the Chinese Yuan

Yuan

Any doubts that the Chinese Yuan is a huge screaming buy should have been dispelled when news came out that China had displaced Germany as the world’s largest exporter. The Middle Kingdom shipped $1.9 trillion in goods in 2012, compared to only $1.4 trillion for Deutschland. The US has not held the top spot since 2003. China’s surging exports of electrical machinery, power … [Read more...]

How to Avoid the Ponzi Scheme Trap

Bernie Madoff

I spent a sad and depressing, but highly instructional evening with Dr. Stephen Greenspan, who had lost most of his personal fortune with Bernie Madoff. The University of Connecticut psychology professor had poured the bulk of his savings into Sandra Mansky's Tremont feeder fund; receiving convincing trade confirms and rock solid custody statements from the Bank of New … [Read more...]

March 11, 2013

Global Market Comments March 11, 2013 Fiat Lux Featured Trade: (WHY THE STOCK MARKET IS STILL GOING UP), (SPX), (SPY), (QQQ), (IWM), (OEX), (RSP), (KKR) (APL) (LINE) (RIG) (AXP), (BMY) (MURRAY SAYLE: THE PASSING OF A GIANT IN JOURNALISM) S&P 500 Large Cap Index (SPX) SPDR S&P 500 (SPY) PowerShares QQQ (QQQ) iShares Russell 2000 Index (IWM) S&P100INDEX … [Read more...]

Why the Stock Market is Still Going Up

Party

I have had an extremely hot hand this year, pushing the 2013 performance of my Trade Alert Service above a stellar 30%. So I am going out on a limb here and predict that the S&P 500 is about to grind up to a new all time high. Since 2009, Federal Reserve governor, Ben Bernanke, has clearly made our central bank’s top priority jobs and growth, at the eventual expense of a … [Read more...]

Who Says Hedge Funds Aren’t Adding Value?

Topiary

According to my old friend, Rick Sopher, chairman of LCH Investments in London, the top ten hedge funds have earned $153 billion for their investors since inception. Rick, who runs his business from an elegant flat on posh Eaton Square, compiled the list after a comprehensive survey of the still operating 7,000 hedge funds worldwide. It is dominated by marquee names like … [Read more...]

China’s Long and Winding Road

Chinese Woman

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. One of the dirty little secrets of international trade for the last three … [Read more...]

The Great Ethanol Boondoggle

Ethanol Formula

One of my biggest disappointments with the Obama administration so far is his continued support of the ethanol boondoggle. The program was ramped up by the Bush administration to achieve energy independence by subsidizing the production of alcohol from domestically grown corn. Add clean burning moonshine (yes, it's the same alcohol - C2H5OH), whose combustion products are … [Read more...]

March 7, 2013

Global Market Comments March 7, 2013 Fiat Lux Featured Trade: (APRIL 19 CHICAGO STRATEGY LUNCHEON), (HERE COMES THE NEXT PEACE DIVIDEND), (AAPL), (USO), (SPX), (UUP), (TLT), (GLD), (SLV), (CU), (CORN), (SOYB) Apple Inc. (AAPL) United States Oil (USO) S&P 500 Index (SPX) PowerShares DB US Dollar Index Bullish (UUP) iShares Barclays 20+ Year Treas Bond (TLT) SPDR … [Read more...]

April 19 Chicago Strategy Luncheon

Chicago

Come join me for lunch for the Mad Hedge Fund Trader’s Global Strategy Update, which I will be conducting in Chicago on Friday, April 19. A three-course lunch will be followed by a PowerPoint presentation and an extended question and answer period. I’ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. And … [Read more...]

Here Comes the Next Peace Dividend

Bashar al-Assad

When communications between intelligence agencies suddenly spike, as has recently been the case, I sit up and take note. Hey, you don’t think I talk to all of those generals because I like their snappy uniforms, do you? The word is that the despotic, authoritarian regime in Syria is on the verge of collapse, and is unlikely to survive more than a few more months. The body … [Read more...]

March 6, 2013

Global Market Comments March 6, 2013 Fiat Lux Featured Trade: (APRIL 12 SAN FRANCISCO STRATEGY LUNCHEON), (INVESTING IN A STATE SPONSOR OF TERRORISM), (AFK), (GAF), (EZA), (THE LONG VIEW ON EMERGING MARKETS), (EWZ), (RSX), (PIN), (FXI) Market Vectors Africa Index ETF (AFK) SPDR S&P Emerging Middle East & Africa (GAF) iShares MSCI South Africa Index … [Read more...]

April 12 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, April 12, 2013. 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...]

Investing in a State Sponsor of Terrorism

Tribal Face

How about a country whose leaders have stolen $400 billion in the last decade and have seen 300 foreign workers kidnapped? Another country lost four wars in the last 40 years. Still interested? How about a country that suffers one of the world’s highest AIDs rates, endures regular insurrections where all of the Westerners get massacred, and racked up 5 million dead in a … [Read more...]

The Long View on Emerging Markets

Puzzle Pieces

I managed to catch a few comments in the distinct northern accent of Jim O'Neil, the fabled analyst who invented the 'BRIC' term, and who has been kicked upstairs to the chairman's seat at Goldman Sachs International (GS) in London. Jim thinks that it is still the early days for the space, and that these countries have another ten years of high growth ahead of them. As I … [Read more...]

March 5, 2013

Global Market Comments March 5, 2013 Fiat Lux Featured Trade: (THE GREAT YAWN OF 2013), (INDUSTRIES THAT YOU WILL NEVER HEAR FROM ME ABOUT) … [Read more...]

The Great Yawn of 2013

Lion

Contrary to widespread predications, the sun rose this morning and the world did not end. The overnight reduction in our defense spending did not prompt expansionist, vengeful Mexicans to try to retake California and Texas, kicking soccer balls all the way. Cigar chomping Cuban communists did not capture Florida. Hockey stick brandishing Canadians failed to even launch another … [Read more...]

Industries You Will Never Hear From Me About

Arnold Swartenegger

The focus of this letter is to show people how to make money through investing in fast growing, highly profitable companies which have stiff, long-term macroeconomic winds at their backs. That means I ignore a large part of the US economy whose time has passed and are headed for the dustbin of history. According to the Department of Labor's Bureau of Labor Statistics, the … [Read more...]

March 4, 2013

Global Market Comments March 4, 2013 Fiat Lux Featured Trade: (MARCH 6 GLOBAL STRATEGY WEBINAR), (THE DEATH OF GOLD, PART II), (GLD), (GDX), (GDM), (FXE), (UUP), (FXB), (GBB), (USO), (CU), (THE REAL ESTATE MARKET IN 2030), (TESTIMONIAL) SPDR Gold Shares (GLD) Market Vectors Gold Miners ETF (GDX) GOLD MINERS INDEX (GDM) CurrencyShares Euro Trust (FXE) PowerShares DB … [Read more...]

Don’t Miss the March 6 Global Strategy Webinar

Robin Williams

My next global strategy webinar will be held on Wednesday, March 6 at 12:00 noon EST. This one will be open to the public, so login in early to get a space. I’ll be giving you my updated outlook on stocks, bonds, commodities, currencies, precious metal, and real estate. The goal is to find the cheapest assets in the world to buy, the most expensive to sell short, and the … [Read more...]

The Death of Gold, Part II

Gold Man

I have been pounding the table trying to get readers out of gold since early December. Now, my friend at stockcharts.com, Mike Murphy, has produced a stunning series of charts showing that this may be more than just a short-term dip and another buying opportunity. Mike explains that a number of traditional chart, technical, and intermarket signs are flashing serious warning … [Read more...]

The Real Estate Market in 2030

House Fire

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 the sector since late 2005, when I unloaded all of my holdings. However, I believe that 'forever' may be … [Read more...]

March 1, 2013

Global Market Comments March 1, 2013 Fiat Lux Featured Trade: (TRADE ALERT SERVICE CLOCKS 26% GAIN IN 2013) (A CONVERSATION WITH THE BOOTS ON THE GROUND), (DINNER WITH NOBEL PRIZE WINNER JOSEPH STIGLITZ) … [Read more...]

Trade Alert Service Clocks 26% Gain In 2013

TA 2013 Performance

The Trade Alert Service of the Mad Hedge Fund Trader has posted a 26.01% profit year to date, taking it to another new all time high. The 26-month total return has punched through to an awesome 81.06%, compared to a miserable 15% return for the Dow average during the same period. That raises the average annualized return for the service to 36%, elevating it to the pinnacle of … [Read more...]

A Conversation with the Boots on the Ground

Defense Language Institute

I have spent many hours speaking at length with the generals who ran our wars in the Middle East, like David Petraeus, James E. Cartwright, and Martin E. Dempsey. To get the boots on the ground view, I attended the graduation of a friend at the Defense Language Institute in Monterey, California, the world's preeminent language training facility. As I circulated at the … [Read more...]

February 28, 2013

Global Market Comments February 28, 2013 Fiat Lux Featured Trade: (SUNDAY WITH PRESIDENT JIMMY CARTER) … [Read more...]

Sunday With President Jimmy Carter

Jimmy Carter - headshot

When I heard that our 39th president, former governor of Georgia, and Nobel Peace Prize winner, Jimmy Carter was coming to town, I moved heaven and earth to meet him. I served in the White House Press Corps as the The Economist correspondent during the latter part of his term, and was dying to get answers to issues that were then classified, or unknowable. It was tense and … [Read more...]

February 27, 2013

Global Market Comments February 27, 2013 Fiat Lux Featured Trade: (WHY THE MARKETS COULD CARE LESS ABOUT SEQUESTRATION), (BE CAREFUL WHO YOU SNITCH ON) … [Read more...]

Why the Markets Could Care Less About Sequestration

Aircraft Carrier

They say a picture is worth 1,000 words. The map below is worth a PhD thesis, and perhaps a weighty tome. Prepared by my friends from government data at the online financial site run by Henry Blodget, Business Insider, it ranks the states most impacted by the sequestration of federal spending that starts on Friday, March 1. Then, some $85 billion in annual outlays grind to a … [Read more...]

Be Careful Who You Snitch On

Sherron Watkins

Buried in the recently passed Dodd-Frank financial reform bill are massive financial rewards for turning in your crooked boss. The SEC is hoping that multimillion-dollar rewards amounting to 10%-30% of sanction amounts will drive a stampede of whistleblowers to their doors with evidence of malfeasance and fraud by their employers. If such rules were in place at the time of … [Read more...]

February 26, 2013

Global Market Comments February 26, 2013 Fiat Lux Featured Trade: (SUDDENLY THOSE ITALIAN LESSONS ARE PAYING OFF), (FXE), (EUO), (EWI), (VIX), (UUP), (NEW BOJ GOVERNOR CRATERS YEN), (FXY), (YCS), (UUP), (PETER F. DRUCKER ON MANAGEMENT) CurrencyShares Euro Trust (FXE) ProShares UltraShort Euro (EUO) iShares MSCI Italy Capped Index (EWI) VOLATILITYS&P500 … [Read more...]

Suddenly Those Italian Lessons Are Paying Off

Black Swan

Welcome to the first black swan of 2013! You couldn’t mistake the meaning of the cries of topless female protesters as they flung themselves at police guarding Italian polling stations on Monday. Basta! Basta! Enough! Enough! The purpose of their demonstration was visibly scrawled in large letters across their nubile bodies in black ink for all to see. Mille grazie … [Read more...]

New BOJ Governor Craters Yen

Gun

At long last, Japanese Prime Minister, Shinzo Abe, has appointed a new governor to the Bank of Japan, Haruhiko Kuroda. The foreign currency markets responded immediately, taking the Japanese yen down to ¥94.60, a new three year low. It also broke new ground in a range of currency crosses, including Euro/Yen, Ausie/Yen, and Kiwi/Yen. It even weakened against that other … [Read more...]

Peter F. Drucker on Management

The Essential Drucker

If you have been living in a cave for the last 72 years and missed the work of management guru, Peter F. Drucker, here is your chance to catch up. I just finished reading The Essential Drucker, a weighty tome of 368 pages which summarized the high points and pearls of wisdom of the author's 38 books published since 1939. A self-described 'social ecologist', Drucker was a … [Read more...]

February 25, 2013

Global Market Comments February 25, 2013 Fiat Lux Featured Trade: (ANOTHER DAY IN THE LIFE OF THE MAD HEDGE FUND TRADER), (SPY), (SPX), (QQQ), (AAPL), (HPQ), (YHOO), (CSCO), (TLT), (TBT), (FXF), (UUP), (FXE), (GLD), (GDX), (TSLA), (USO) SPDR S&P 500 (SPY) SPX Corporation (SPW) PowerShares QQQ (QQQ) Apple Inc. (AAPL) Hewlett-Packard Company (HPQ) Yahoo! Inc. … [Read more...]

A Day in the Life of the Mad Hedge Fund Trader

Ben Affleck

Diary Entry for Friday, February 22, 2013 Dear Diary, 4:30 PM Thursday- Thought I’d check my Bloomberg to see how the Asian markets were opening. Wow! Shanghai is really taking it in the shorts, down 5%. Looks like when Ben Bernanke catches a cold, the Chinese markets catch pneumonia. They must be more dependent on our quantitative easing then we are. 5:00 PM- Call … [Read more...]

February 22, 2013

Global Market Comments February 22, 2013 Fiat Lux Featured Trade: (FOLLOW UP ON TESLA), (TSLA), (DON’T MISS THIS REAL ESTATE BUBBLE), (A VERY SHORT HISTORY OF HEDGE FUNDS), (POPULATION BOMB ECHOES), (POT), (MOS), (AGU), (RJA), (CORN), (WEAT), (SOYB) Tesla Motors, Inc. (TSLA) Potash Corp. of Saskatchewan, Inc. (POT) The Mosaic Company (MOS) Agrium Inc. … [Read more...]

Follow Up on Tesla

Tesla

Damn! I should have cut a commission deal with Tesla (TSLA) before I published my story on their amazing electric vehicle a few days ago (click here for “My Take on the Tesla Tiff”). I have since received a dozen emails from readers telling me they have jumped on the waiting list with a $5,000 deposit, which I understand has been shortened to five months. In the meantime, … [Read more...]

Don’t Miss This Real Estate Bubble

For Rent Sign

There is a new real estate bubble forming in the US, but it is not inflating where you think. Apartment rents have been rapidly rising, and are about to go ballistic. In fact the appreciation has been so strong that the cost of ownership is now less than renting in many parts of the country, provided you can get one of those hard to get, ultra low interest rate bank … [Read more...]

A Very Short History of Hedge Funds

Money, Arms Full

Legendary Fortune Magazine editor, Winslow Jones, created the first hedge fund out of a shabby office on Broadway in New York City in 1948, and generated monster returns over the next 20 years. He got the idea of a 20% performance bonus, now an industry standard, from ancient Phoenician sea captains who kept a fifth of the profits from successful voyages. Jones must have had an … [Read more...]

The “Population Bomb” Echoes

Paul Erlich

Pack your portfolios with agricultural plays like Potash (POT), Mosaic (MOS), and Agrium (AGU) if Dr. Paul Ehrlich is just partially right about the impending collapse of the world's food supply. You might even throw in long positions in wheat (WEAT), corn (CORN), soybeans (SOYB), and rice. The never dull, and often controversial Stanford biology professor told me he expects … [Read more...]

February 21, 2013

Global Market Comments February 21, 2013 Fiat Lux Featured Trade: (IS THE PARTY OVER?), (SPY), (INDU), (IWM), (FXY), (YCS), (TLT), (GLD), (SLV), (FXE), (RUMBLINGS IN TOKYO), (FXY), (YCS), (TESTIMONIAL) SPDR S&P 500 (SPY) Dow Jones Industrial Average (INDU) iShares Russell 2000 Index (IWM) CurrencyShares Japanese Yen Trust (FXY) ProShares UltraShort Yen … [Read more...]

Is the Party Over?

Party Girl

The simple answer is no, not yet. But the neighbors have complained about the noise and called the cops. Today’s 108-point drop in the Dow, and 19-point decline in the S&P 500 does mean that the straight line, parabolic phase of the bull market is over. One of the most overbought markets in history is finally taking a pause. We traders are now going to have to work a … [Read more...]

Rumblings in Tokyo

Scrabble

I spent ten years of my life tramping in and out of Japan’s Ministry of Finance headquarters in Tokyo’s Kasumigaseki district. It was a dreadful reinforced steel and concrete affair with a dull grey tile siding that was so solidly built that it was one of the few structures in the city to survive WWII. But the building offered spacious prewar dimensions, with lovely high … [Read more...]

February 20, 2013

Global Market Comments February 20, 2013 Fiat Lux Special Tesla Issue Featured Trade: (MY TAKE ON THE TESLA TIFF), (TSLA) Tesla Motors, Inc. (TSLA) … [Read more...]

My Take on the Tesla Tiff

Tesla Plant

By now, you are all probably well aware of the firestorm that has erupted between Tesla’s (TSLA) Elon Musk and the New York Times. It started when the groundbreaking California car maker loaned out a high performance Model S for testing of its East Coast supercharger network to the Times’ auto correspondent, John Broder, for a drive from Washington DC to Boston. Broder … [Read more...]

February 19, 2013

Global Market Comments February 19, 2013 Fiat Lux Featured Trade: (WHAT’S A POOR BOND MANAGER TO DO?) (TLT), (TBT), (NLY), (CVRR), (CWB), (THE POPULATION BOOM) (WHO EXPENSIVE OIL HURTS THE MOST), (USO) iShares Barclays 20+ Year Treas Bond (TLT) ProShares UltraShort 20+ Year Treasury (TBT) Annaly Capital Management, Inc. (NLY) CVR Refining, LP (CVRR) SPDR Barclays … [Read more...]

What’s a Poor Bond Manager To Do?

Man-Chestpain

With the consensus wisdom now pervasive that the 60 year bull market in bonds is over, what is a poor bond fund manager to do? Has he now become the defacto manager of the New York Mets, condemned to reliably losing every season? Pity the hapless financial advisor who has to drag clients, kicking and screaming, out of what has worked so well for the last several … [Read more...]

The Population Boom

Traffic

In their century long coverage of exotic places, cultures, and practices, National Geographic Magazine inadvertently sheds light on broad global trends that deeply affect the rest of us. Plus, the pictures are great. A recent issue celebrated the approach of the world's population to 7 billion, and the implications therein. Long time readers of this letter know that … [Read more...]

Who Expensive Oil Hurts the Most

Before-After

Every time the price of oil spikes, we learn vast amounts of information about the global reach of this indispensable commodity. It's like taking a non-core elective in geology at college. So I was fascinated when I found the chart of relative sector winners and losers below. No surprise that energy does best from sky high crude prices. It is followed by telecommunications … [Read more...]

February 15, 2013

Global Market Comments February 15, 2013 Fiat Lux Featured Trade: (FEBRUARY 20 GLOBAL STRATEGY WEBINAR), (THE BOND CRASH HAS ONLY JUST STARTED), (TLT), (TBT), (WATCH SAVINGS RATES FOR INTERNATIONAL MARKET CUES) iShares Barclays 20+ Year Treas Bond (TLT) ProShares UltraShort 20+ Year Treasury (TBT) … [Read more...]

Don’t Miss the February 20 Global Strategy Webinar

Robin Williams

My next global strategy webinar will be held on Wednesday, February 20 at 12:00 noon EST. This one will be open to the public, so login in early to get a space. I’ll be giving you my updated outlook on stocks, bonds, commodities, currencies, precious metal, and real estate. The goal is to find the cheapest assets in the world to buy, the most expensive to sell short, and the … [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. Hoover, Landon, and … [Read more...]

Watch International Savings Rates for Market Cues

Fist of Dollars

Often while searching for a piece of data through Google, I stumble across something else, which is far more interesting. That is how I found the table below of international savings rates. Why should you care? Because countries with high savings rates tend to have strong economies and great stock markets, since there is plenty of excess cash available to pour into … [Read more...]

February 14, 2013

Global Market Comments February 14, 2013 Fiat Lux SPECIAL ASIAN HIGH YIELD STOCK ISSUE Featured Trade: (REACHING FOR DIVIDENDS IN ASIA), (SSW), (CHT), (MLYBY), (EWSS) (AN EVENING WITH GENERAL DOUGLAS FRASER) (EWZ), (ECH), (GXG), (CU), (CORN), (SOYB), (WEAT) Seaspan Corporation (SSW) Chunghwa Telecom Co., Ltd. (CHT) Malayan Banking Bhd (MLYBY) iShares MSCI Singapore … [Read more...]

Reaching for Dividends in Asia

High Yield Dividends

You would think buying the highest yielding stocks in the world’s fastest growing countries would be a no brainer. Yet, you hardly ever find decent recommendations in this area. So after spending a few dozen hours scouring the investment universe, I came up with the short list below. Some of these have already had good moves in this yield starved world. But it is still a … [Read more...]

An Evening With General Douglas Fraser

Douglas Fraser- Gen.

I never cease to be amazed by the intelligence provided me by the US Defense Department, which after the CIA, has the world’s most impressive and insightful economic research team. There are few places a global strategist like me can go to get intelligent, thoughtful forty-year views, and this is one. Wall Street, eat your heart out. Of course, they are planning how to … [Read more...]

February 13, 2013

Global Market Comments February 13, 2013 Fiat Lux Featured Trade: (THE MUNI BOND MYTH), (MUB), (TLT), (JNK), (ACTHX), (BEWARE THE COMING EQUITY CAPITAL FAMINE) iShares S&P National AMT-Free Muni Bd (MUB) iShares Barclays 20+ Year Treas Bond (TLT) SPDR Barclays High Yield Bond (JNK) Invesco High Yield Muni A (ACTHX) … [Read more...]