Global Market Comments
January 8, 2018
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or FEEDING THE GEESE)
(THE PASSIVE/AGGRESSIVE PORTFOLIO)
Global Market Comments
January 8, 2018
Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or FEEDING THE GEESE)
(THE PASSIVE/AGGRESSIVE PORTFOLIO)
What if you want to be a little more aggressive with your investment strategy, say twice as aggressive? What if markets don't deliver any year on year change?
Then you need a little more pizzazz in your portfolio, and some extra leverage to earn your crust of bread and secure your retirement.
It turns out that I have just the solution for you. This would be my "Passive/Aggressive Portfolio".
I call it passive in that you just purchase these positions and leave them alone and not trade them. I call it aggressive as it involves a basket of 2x leveraged ETF's issued by ProShares, based Bethesda, MD (click here for their link).
The volatility of this portfolio will be higher. But the returns will be double what you would get with an index fund, and possibly much more. It is a "Do not open until 2035" kind of investment strategy.
Here is the makeup of the portfolio:
(ROM) - ProShares Ultra Technology Fund - The three largest single stock holdings are Apple (AAPL), Microsoft (MSFT), and Facebook (FB). It was up 80.95% last year. For more details on the fund, please click here.
(UYG) - ProShares Ultra Financials Fund - The three largest single stock holdings are Wells Fargo (WFC), Berkshire Hathaway (BRK.B), and JP Morgan Chase (JPM). It was up 38.42% last year. For more details on the fund, please click here.
(UCC) - ProShares Ultra Consumer Services Fund - The three largest single stock holdings are Amazon (AMZN), Walt Disney (DIS), and Home Depot (HD). It was up 3.71% last year. For more details on the fund, please click here.
(DIG)- ProShares Ultra Oil & Gas Fund - The three largest single stock holdings are ExxonMobil (XOM), Chevron (CVX), and Schlumberger (SLB). It was DOWN 9.20% last year. For more details on the fund, please click here.
(BIB) - ProShares Ultra NASDAQ Biotechnology Fund - The three largest single stock holdings are Amgen (AMGN), Regeneron (REGN), and Gilead Sciences (GILD). It was up 40.49% last year, please click here.
You can play around with the sector mix at your own discretion. Just focus on the fastest growing sectors of the US economy, which the Mad Hedge Fund Trader does on a daily basis.
It is tempting to add more leveraged ETF's for sectors like gold (UGL), to act as an additional hedge.
There is also the 2X short Treasury bond fund (TBT), which I have been trading in and out of for years, a bet that long-term bonds will go down, interest rates rise.
There are a couple of provisos to mention here.
This is absolutely NOT a portfolio you want to own going into a recession. So, you will need to exercise some kind of market timing, however occasional.
The good news is that I make more money in bear markets than I do in bull markets because the volatility is so high. However, to benefit from this skill set, you have to keep reading the Diary of a Mad Hedge Fund Trader.
There is also a problem with leveraged ETF's in that management and other fees can be high, dealing spreads wide, and tracking error huge.
This is why I am limiting the portfolio to 2X ETF's, and avoiding their much more costly and inefficient 3X cousins, which are really only good for intraday trading. The 3X ETF's are really just a broker enrichment vehicle.
There are also going to be certain days when you might want to just go out and watch a long movie, like Gone With the Wind, with an all ETF portfolio, rather than monitor their performance, no matter how temporary it may be.
A good example was the flash crash, when the complete absence of liquidity drove all of these funds to huge discounts to their asset values.
Check out the long-term charts, and you can see the damage that was wrought by high frequency traders on that cataclysmic day, down -53% in the case of the (ROM). Notice that all of these discounts disappeared within hours. It was really just a function of the pricing mechanism being broken.
I have found the portfolio above quite useful when close friends and family members ask me for stock tips for their retirement funds.
It was perfect for my daughter, who won't be tapping her teacher's pension accounts for another 45 years, when I will be long gone. She mentions her blockbuster returns every time I see her, and she has only been in them for five years.
Imagine what technology, financial services, consumer discretionaries, biotechnology, and oil and gas will be worth then? It boggles the mind. My guess is up 100-fold from today's levels.
You won't want to put all of your money into a single portfolio like this. But it might be worth carving out 10% of your capital and just leaving it there.
That will certainly be a recommendation for financial advisors besieged with clients complaining about paying high fees for negative returns in a year that is unchanged, or up only 1%-2%. Virtually everyone has them right now.
Adding some spice, and a little leverage to their portfolios might be just the ticket for them.
Global Market Comments
January 5, 2018
Fiat Lux
Featured Trade:
(HAPPY DAYS ARE HERE AGAIN!),
(SPY), (QQQ), (TLT), (USO), (FXY), (FXE), (GLD), (ITB),
(THE DIFFERENCE BETWEEN MAD HEDGE FUND TRADER AND MAD DAY TRADER)
Thanks to our ballistic, market beating performance, up 57.91% last year, we have recently enjoyed a large influx of new subscribers, especially from Australia and New Zealand. So, I want to take this opportunity to clarify exactly what you bought.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader will exploit money-making opportunities over a brief ten minute to one month window.
It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
The Diary of a Mad Hedge Fund Trader is written by myself, John Thomas, who you may have met during my many Global Strategy Luncheons around the world.
I use a combination of deep, long term fundamental research, technical analysis, and a global network of long time contacts to generate great investment ideas for you, the reader.
The target holding period can be anywhere from three days to six months, although if something fortuitously doubles in a day, I don't need to be told twice to take a profit (yes, this happens sometimes).
Last year, I issued over 200 Trade Alerts, of which 84% were profitable.
The Mad Day Trader is a separate, but complimentary service run by my Philadelphia based friend, Bill Davis. He uses a dozen proprietary short-term technical and momentum indicators he developed himself to generate buy and sell signals.
These will be sent to you by email for immediate execution. During normal trading conditions, you should receive up to ten alerts a month. The target holding period can be anywhere from a few minutes to a month.
Bill uses far tighter stop loss limits, given the short-term nature of his strategy. The goal is to keep losses miniscule, so you can always live to fight another day.
Bill uses primarily a "Buy-Write" strategy whereby he buys stock and sell short call options against them. Bill also provides outstanding daily US stock market commentary.
You will receive the same instructions for order execution, like ticker symbols, entry and exit points, targets, stop losses, and regular real time updates, as you do from the Mad Hedge Fund Trader.
He supplies key support and resistance levels for several indexes, which the markets will revolve around. Traders love it.
At the end of each day, a separate short-term model portfolio will be posted on the website for both strategies.
Bill is a 30-year market veteran who has spent a career in financial education.
I have followed his work for yonks, and can't imagine a better partner in the serious business of explaining how to make money to you, the reader.
Together, The Mad Hedge Fund Trader and the May Day Trader comprise Mad Hedge Fund Trader Pro, which is for sale on my website for $4,500 a year.
I hope this makes everything crystal clear for the new subscribers. If you have anymore questions, please email my assistant, at support@madhedgefundtrader.com
When Nancy is tied up, calls are automatically routed through to our web developer, Doug. Please remember that Sydney, Melbourne, and Brisbane Australia are 16 hours ahead of Florida, while Perth is 13 hours ahead.
Global Market Comments
January 4, 2018
Fiat Lux
Featured Trade:
(JANUARY 3 GLOBAL STRATEGY WEBINAR Q&A)
(TESTIMONIAL)
I have always had a passion for the markets and the Mad Hedge Fund Trader gave me the courage to make my first trade. At the time I was unemployed and put in everything I could scrape together - about ten thousand dollars.
For me this was a free education, as the profits would pay for all the books and the fees. My father gave me some money as a gift, while telling me "I was crazy" following "some guy" off the Internet.
Every suggestion I have taken religiously. I follow all your lead indicators from the Shanghai stock market to Dr. Copper and the jobless claims.
Over the last couple of months I have started doing my own successful options trades based on the extra suggestions you give in the webinars and commentaries. Often, I do a trade and ten minutes later an alert comes.
My father who is worried about his future (like so many of us) is now joining the program. I am going to assist him with his first trades.
Another family member has asked me to manage his money. I really feel you are helping me become a hedge fund manager with this fantastic program.
Geoff
London - England
"It's a funny thing about life. If you refuse to accept anything but the best, you very often get it," said British Novelist, Somerset Maugham.
While the Global Trading Dispatch focuses on investment over a one week to six-month time frame, Mad Options Trader, provided by Matt Buckley, will focus primarily on the weekly US equity options expirations, with the goal of making profits at all times. Read more
Global Market Comments
January 2, 2018
Fiat Lux
Featured Trade:
(JANUARY 3 GLOBAL STRATEGY WEBINAR),
(HAS THE WORLD HIT "PEAK DIAMONDS"),
(NILE), (AAL.L),
(THE NEW COLD WAR)
(TESTIMONIAL)
"Liquidity is a coward. It's never around when you need it." said market commentator, Jeff Saut.
Legal Disclaimer
There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.
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