October 22, 2014

Global Market CommentsOctober 22, 2014Fiat Lux Featured Trade:(BANK OF AMERICA IS BREAKING OUT ALL OVER), (BAC), (XLF), (TLT)(AN EVENING WITH TRAVEL GURU ARTHUR FROMMER),(THE TECHNOLOGY NIGHTMARE COMING TO YOUR CITY) Bank of America Corporation (BAC)Financial Select Sector SPDR ETF (XLF)iShares 20+ Year Treasury Bond (TLT) … [Read more...]

Bank of America is Breaking Out All Over

Bank of America - ATM

Lost in the chaos of last week was Bank of America’s (BAC) Q3 earnings report, which was the best report from the company in the past seven years. What did the stock do? It dove 6.5%, along with the rest of the market, hitting a low of $15.40. I hate it when that happens, being right on the fundamentals, and wrong on the market timing. I mention all of this because followers … [Read more...]

An Evening with Travel Guru Arthur Frommer

Europe on $5 a Day, cover

Travel guru, Arthur Frommer, says that now is the best time to travel in 20 years, thanks to a combination of a strong dollar and desperate price-cutting forced by the recession. Four years after oil hit an historic peak at $148/barrel, when $500 fuel surcharges abounded, and the demise of the travel industry was widely predicted, costs in some countries, like Mexico and Costa … [Read more...]

The Technology Nightmare Coming to Your City


I tell people at my strategy luncheons that living in the San Francisco Bay area is like living in the future. There is an explosion of high tech innovation going on here, and we locals often find ourselves the guinea pigs for the latest hot products. However, sometimes the future is not such a great place to be. I learned this the other day when I received a parking ticket … [Read more...]

October 22, 2014 – Quote of the Day

Wheat Fields-Van Gogh

“Every recession sows the seeds for the next business recovery, and every recovery sows the seeds of the next recession,” said hedge fund manager Leon Cooperman of Omega Advisors. … [Read more...]

October 21, 2014

Global Market CommentsOctober 21, 2014Fiat Lux Featured Trade:(10 SIGNS OF A MARKET BOTTOM),(SPY), (IWM), (TLT), (FXE),(HOW TO SELL SHORT A CALL SPREAD),(SIGN UP NOW FOR TEXT MESSAGING OF TRADE ALERTS) SPDR S&P 500 ETF (SPY)iShares Russell 2000 (IWM)iShares 20+ Year Treasury Bond (TLT)CurrencyShares Euro ETF (FXE) … [Read more...]

10 Signs of a Market Bottom

Infrared Picture

Bottom? Bottom? Where’s the market bottom? The talking heads on TV have been working overtime speculating on where the worst move down in the stock market in three years will take us. It all may sound like intelligent prognosticating to you. As for me, I know they are guessing. So I shall share with you my ten benchmark indicators that you can closely track to decide for … [Read more...]

How to Sell Short a Call Spread


It’s time to teach some old dogs some new tricks. This is a bet that the S&P 500 does not climb to a new all time high by the November 21 expiration in 24 trading days. I think that we need to chop around here a bit and consolidate within a wide range before the (SPY) starts its New Year run to all time highs. Not wanting to leave a single penny on the table, I want to … [Read more...]

Sign Up Now for Text Messaging of Trade Alerts


Paid subscribers are able to receive instantaneous text messages of my proprietary Trade Alerts. This eliminates frustrating delays caused by traffic surges on the Internet itself, and by your local server. To activate your free service, please log in to your account at www.madhedgefundtrader.com, look under your name on the right, and click on the blue hyperlink that says … [Read more...]

October 21, 2014 – Quote of the Day


Steve Jobs offered me one third of Apple for $50,000 and I was so smart that I turned it down. It’s funny when you think about it now, except when I’m crying,” said Nolan Bushnell, the founder of game company Atari and Jobs’ first employer. … [Read more...]

October 20, 2014

Global Market CommentsOctober 20, 2014Fiat Lux Featured Trade:(MAD HEDGE FUND TRADER HITS NEW ALL TIME HIGH WITH 40% GAIN),(SPY), (TBT), (TSLA), (BAC), (GILD), (DAL), (AAPL), (VIX),(OCTOBER 22 GLOBAL STRATEGY WEBINAR) SPDR S&P 500 ETF (SPY)ProShares UltraShort 20+ Year Treasury (TBT)Tesla Motors, Inc. (TSLA)Bank of America Corporation (BAC)Gilead Sciences Inc. (GILD)Delta … [Read more...]

Mad Hedge Fund Trader Hits New All Time High With 40% Gain in 2014

Giants Baseball Hitter

It was Thursday night, and the family was glued to the TV set. The San Francisco Giants were playing the St. Louis Cardinals for the National League Pennant. It was the bottom of the 9th inning, the score was tied 3-3, and the Giants were up. Two men were already on base. Then right fielder Travis Ishikawa blasted a home run out of the park, winning the game by 6-3. The fans … [Read more...]

October 20, 2014 – Quote of the Day

Military Police & Flowers

“The dirty little secret in Washington is that the biggest doves wear uniforms. They have seen wars and they have seen consequences. They have also been sent into conflict and then seen political support evaporate. We need to be a lot more careful when deploying our military forces.” said former Secretary of Defense, Robert Gates. … [Read more...]

October 17, 2014

Global Market CommentsOctober 17, 2014Fiat Lux Featured Trade:(THE BOTTOM BUILDING PROCESS HAS BEGUN),(SPY), (TLT), (TBT), (GILD), (AAPL), (DAL),(FRIDAY OCTOBER 24 SAN FRANCISCO STRATEGY LUNCHEON)(REVISITING CHENIERE ENERGY),(LNG), (USO), (UNG) SPDR S&P 500 ETF (SPY)iShares 20+ Year Treasury Bond (TLT)ProShares UltraShort 20+ Year Treasury (TBT)Gilead Sciences Inc. … [Read more...]

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...]

10 Reasons Why I’m Wrong on Bonds

John Thomas

I have never been one to run with the pack. I'm the guy who eternally marches to a different drummer, not in the next town, but the other hemisphere. I would never want to join a club that would lower its standards so far that it would invite me as a member. On those rare times that I do join the lemmings, I am punished severely. This is one of the times. Like everyone and … [Read more...]

A Special Note on Exercised October Options

John Thomas

There are only 5 trading days left until the front month equity options expire on October 17. My short plays in the October S&P 500 (SPY) turned out to be wildly successful, with all of these positions quickly turning profitable. As a result, the Mad Hedge Fund Trader’s model trade portfolio has remaining positions that are deep in-the-money that expire that day. So, it … [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...]

Ten Tips for Surviving a Day Off With Me

Sierra Mtn - Sign

I have snowshoed some 350 miles so far this winter, most of it over 9,000 feet with a 60 pound pack. I’ll probably put in over 600 before the spring snowmelt, since my February Australian lecture tour is going to take a bite out of my training schedule. So I think I’m finally getting the hang of it. It is definitely a sport of mixed pleasures. The blisters and calluses that … [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...]

A Cow Based Economics Lesson


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 throws the milk … [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...]

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 the … [Read more...]

The Long View on Emerging Markets


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 recently retired from 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 have been … [Read more...]


John Thomas - Tree

We view The Mad Hedge Fund Trader as a vital resource that helps us focus on major market trends that are most likely to make money over time. It is a resource that helps us filter out the daily noise in various markets and the mostly irrelevant commentary of TV's talking heads. Unlike many newsletters that focus on one strategy or asset class The Mad Hedge Fund Trader's … [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...]

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 ten … [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 are running our wars in the Middle East, like David Petraeus, and James E. Cartwright. 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 reception at the … [Read more...]

October 1, 2014 – Quote of the Day


“People are investing with a rear view mirror. Last year, you had people legitimately scared out of the market. Unfortunately, you are losing a generation of investors at a time when they ought to be thinking about buying high quality stocks,” said Hersh Cohen of Clearbridge Advisors. … [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...]

Peter F. Drucker on Management

The Essential Drucker

If you have been living in a cave for the last 74 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...]

Thank Goodness I Don’t Live in Sweden!


I recently found the chart below showing world tax rates as a percentage of GDP for the past 40 years. Sweden suffers the world's heaviest tax burden at 51%, compared to only 27% in the US. The US has among the world's lowest tax burdens in terms of actual taxes paid, which has been falling for the last ten years. Listening to TV pundits, you would think we had the world's … [Read more...]

September 26, 2014 – Quote of the Day


“You can reduce discretionary spending down to zero and it won’t have much impact on our fiscal problems because it’s such a small proportion of the total,” said Ben Bernanke, chairman of the Federal Reserve. … [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...]

The ‘Population Bomb’ Echoes

Fruit Market

With the entire agricultural space one of the preeminent investment disasters this year. You’d be hard pressed to find a long-term bullish argument for the troubled sector. You know all those John Deere (DE) and Caterpillar (CAT) hats I saw American tourists wearing in Venice, Italy two years ago? This year, I didn’t see one! That is, of course, unless you read this … [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)Amazon.com 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 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...]

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...]