“Life’s too short to hang out with people who aren’t resourceful.” Said Founder and CEO of Amazon Jeff Bezos
Mad Hedge Hot Tips
December 14, 2018
Fiat Lux
The Five Most Important Things That Happened Today
(and what to do about them)
1) Economic Optimism Plunges from 48% to 39%, according to a CNBC poll, the sharpest drop in the 12-year history of the survey. Other than that, how was the play, Mrs. Lincoln? Click here.
2) Mad Hedge Nails it With a Big Bond Short. Taking profits here to get out of the way of the Fed meeting next week. I’ll reestablish on the next three-point rally. Kaching! Click here.
3) Softbank Looking to Sell its NVIDIA Holdings, one of the graphics card maker's largest shareholders down, 50% from the peak. Why do I feel I have just been kicked in the cajones? The stock is in screaming “BUY” territory right here for long-term players. (NVDA). Click here.
4) “World Cup” was the Top Google Search Term of 2018, followed by “Hurricane Florence.” Someday Americans will understand this. How you can stay riveted for 90 minutes for a 1-0 score is beyond me. Isn’t it really all about the acting? Click here.
5) India was the Top Destination of Remitted US Earnings, at $80 billion last year, followed by China at $67 billion and the Philippines at $34 billion. That’s a lot of grandmas to support. Click here.
Published today in the Mad Hedge Global Trading Dispatch:
(DECEMBER 12 BI-WEEKLY STRATEGY WEBINAR Q&A),
(SPX), (MU), (PYPL), (SPOT), (FXE), (FXY), (XLF), (MSFT), (AMZN), (TSLA), (XOM), (MS)
(SIGN UP NOW FOR TEXT MESSAGING OF TRADE ALERTS)
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day 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. Read more
Global Market Comments
December 14, 2018
Fiat Lux
Featured Trade:
(DECEMBER 12 BIWEEKLY STRATEGY WEBINAR Q&A),
(SPX), (MU), (PYPL), (SPOT), (FXE), (FXY), (XLF), (MSFT), (AMZN), (TSLA), (XOM),
(SIGN UP NOW FOR TEXT MESSAGING OF TRADE ALERTS)
Below please find subscribers’ Q&A for the Mad Hedge Fund Trader December 12 Global Strategy Webinar with my guest and co-host Bill Davis of the Mad Day Trader
Q: Is the bottom in on the S&P 500 (SPX) or are we going to go on another retest?
A: It’s stuck right in the 2600-2800 range, and I think that’s probably where we bounce off of 2600 again. The question is whether or not we can clear the top of the range at 2800. If we can’t, I would fully expect a retest of this bottom in which case I could see it going down to 2500.
Q: You say you’ll go 100% cash by Dec 21st but also stated that the S&P 500 will go up 5% by the year's end. Should we stay in until we get the up 5% move?
A: Yes, all of our options positions expire by the 21st but if you’re just long in stocks, I would stay long, probably through the end of the year.
Q: Will the Chinese-U.S. dispute ruin the Tech industry?
A: No, I think the Trump Administration will have to do some kind of deal and call it a victory, otherwise the trade war will pull the U.S. into recession. If we go into the next presidential election with another recession—well, no one has ever survived that. Even with the China-U.S. dispute, the U.S. is still dominant in the Tech industry and will continue to do so for decades to come.
Q: China has managed to duplicate Micron Technology’s (MU) biggest selling chip, undercutting prices—thoughts?
A: True, Micron is the lowest value added of the major chip producers, therefore their stock has gotten hit the worst of any of the chip stocks down by about 46%, but I know Micron very well and they have a whole range of chips they’re currently upgrading, moving themselves up the value change to compete with this. So, that makes it a great company to own for the long term.
Q: I’m up 90% on my PayPal (PYPL) position—should I take a profit?
A: Yes! Absolutely! How many 90% profits have you had lately? You are hereby excused from this webinar to go execute this trade. And well-done Dr. Denis! And thank you for the offer of a free colonoscopy.
Q: What can you say about Spotify (SPOT)?
A: No, thank you—there’s lots of competition in the music streaming business. We are avoiding the entire space. The added value is not great, and many of these companies will have a short life. And with China’s Tencent growing like crazy, life for Spotify is about to become dull, mean, and brutish.
Q: What’s your view on currencies?
A: So you’re looking to make another fortune? Yes, I think the Euro (FXE) and the Yen (FXY) really are looking hard to rally, and the trigger could be dovish language in the next Fed meeting. Once the Fed slows its rate of interest rates rises, the currencies should take off like a scalded chimp.
Q: Will the banks (XLF) rally in the next 6 months for a better sell?
A: Many people are waiting for a rally in the banks so they can unload them and haven’t gotten it—they’re back to pre-election price levels. The issue here is structural, and you don’t get recoveries from major structural changes in an industry. It’s significant that this is the first bull market that had no net new employment in the banks whatsoever; the business is fading away. They are the new buggy whip makers. These gigantic national branch networks will all be gone in ten years because the banks can’t afford them.
Q: Would you enter the Microsoft (MSFT) trade today?
A: I actually think I would; Microsoft only pulled back 10% when everything else was dropping 30%, 40%, or 50%. That shows you how many people are trying to get into this name so if you could take a little short-term pain (like 5%), the stock outright is probably a screaming buy here. I think it’ll go to $200 one day, so here at $110-$111 it looks like a pretty good deal. The story here is that Microsoft is rapidly taking market share from Amazon (AMZN) in the cloud business and that’s going to continue.
Q: When will you be updating your long-term model portfolio?
A: I usually do it at the end of the year, and rarely make any big changes. I’ll still be selling short bonds and still like Tesla (TSLA) and Exxon (XOM).
Q: I just joined your service. What is the best way to get started?
A: I’ll give you the same advice that I gave every starting trader at Morgan Stanley (MS). Start trading on paper only. When you are making money reliably on paper, move up to using real money, but only with one contract per position. When that is successful, slowly increase your size to 2, 3, 5, 10, and 20 contracts. Pretty soon, you will be swinging around 1,000 contracts a lot like I do. The further you move down the learning curve the greater you can increase your size and your risk. If you never get past the paper stage at least it’s not costing you any money.
I hope this helps.
Good luck and good trading.
John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader
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Good luck and good trading.
John Thomas
Mad Hedge Hot Tips
December 13, 2018
Fiat Lux
The Five Most Important Things That Happened Today
(and what to do about them)
1) US Corporate Profits Have Peaked, so don’t forget to sell the next big rally. You don’t want to be left standing when the music stops playing. Click here.
2) Bearishness is at a Record High, with the AAII survey of investment managers showing 20.9% bulls versus 48.9% bears. Such radical numbers usually indicate that a turning point is near. Click here.
3) Trump Says He’ll Spring the Huawei CFO to Get a China Trade Deal. Hey, anything for the deal! Never mind that she was selling telecom equipment to the ayatollahs. If it makes my stocks go up, I’m fine with that. I’m not welcome in Tehran anyway. Click here.
4) It was 38 Years Ago Today That Apple Went Public and has generated a 43,000% return since its $22 IPO price. I waited until the next crash and then bought it at $4 where it sits in one of my “no touch” retirement portfolios today. The great rule of thumb after 50 years of investment is that if you hold a stock long enough, the dividend will eventually exceed your original capital cost, giving you a 100% a year return. Click here.
5) India was the Top Destination of Remitted US Earnings, at $80 billion last year followed by China at $67 billion and the Philippines at $34 billion. That’s a lot of grandmas to support. Click here.
Published today in the Mad Hedge Global Trading Dispatch and Mad Hedge Technology Letter:
(WHAT’S THE MATTER WITH APPLE?),
(AAPL), (MSFT), (KO), (AMZN), (CLX), (NFLX),
(WHY YOUR OTHER INVESTMENT NEWSLETTER IS SO DANGEROUS)
(HOW PAYPAL IS DESTROYING LEGACY BANKING)
(MSFT), (TWLO), (ADBE), (PYPL), (CRM), (SQ), (ROKU), (AMZN)
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more