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MHFTR

Report from the Matterhorn Summit

Diary, Newsletter

From where I stand, the rolling foothills of Northern Italy spread out below me to the south.

On my left lie the distinctive peaks of the Dolomites. On my right I can see the massive expanse of Mont Blanc, at 15,781 feet the highest mountain in Europe.

I am standing at the summit of the Matterhorn. Knock another item off the bucket list.

I have been trying to climb this mountain for 45 years. During my early attempts I possessed the physical conditioning, but not the money to acquire the necessary equipment needed to get to the top.

An ice ax, crampons, helmet, and ropes don't come cheap to a 16-year-old.

In later years, vile weather frustrated my every attempt. Now the forecast was perfect, and the sun, the moon, and the stars aligned.

The Matterhorn has long been the premier climbing challenge on the continent. My doctor in Zermatt heads up many rescues and tells me that a dozen people a year die trying. The year 1999 was especially bad, claiming 39 lives.

Still, if death isn't on the table, it's not worth doing.

I spent a restless night sleeping under a heavy wool blanket in a shared bunk with a dozen other climbers at the 10,695-foot Hornli Hut. Get a group of guys like this together, and there is always one who snores.

At 3:00 AM we bolted out of bed to eat a hardy breakfast of eggs, cold cuts, and lots of strong coffee before launching an assault on the mountain.

We then quietly filled canteens and donned climbing harnesses and backpacks. The night sky was crystal clear, an ocean of stars shimmering upon us, with the occasional shooting star giving its blessing.

I had spent the past week acclimatizing myself to the high altitude, completing practice climbs to the top of increasingly difficult surrounding peaks. I was joined by my Swiss guide, Christian, of the Zermatt Alpin Center.

In his mid-40s, chocolate tanned, with thighs like tree stumps, he had already climbed the Matterhorn an impressive 77 times.

We took off at a rapid pace, passing most of the early starters. Zermatt guides are notorious for speed climbing, the theory being that the quicker they wore out their clients, the sooner they could go home.

I realized there was something far more responsible going on. Christian had to gain the confidence that I had enough energy reserves left for the descent, when 90% of all fatalities occur. At 11,800 feet he said, "Good," and we roped up.

It was about this time that I started to wonder if I should really be here. Most of the climbers we were passing were in their 20s and a few in their 30s, old enough to be my grandchildren.

After all, I'm the silver-haired gentleman people give their seat up to when riding the San Francisco BART. At 12,200 feet Christian ordered, "Now we put on our crampons."

From there on we silently pushed our way upward in the darkness, headlamps illuminating the way, methodically positioning our feet to make the leap to the next boulder above.

The mountain has been climbed for 151 years and many of the surfaces have been polished smooth by boots to the point of becoming dangerously slippery, especially when wet.

Much of the slope is frustratingly unstable. Half the rocks you reach for are loose. Stones sent flying by climbers above are a major risk, which is why we wear helmets.

By 5:00 AM we were at 12,700 feet and the sun started to rise. I took out my camera to take a picture, but fumbling with my climbing gloves, I dropped it. It smashed into a dozen pieces on a huge boulder and then skittered down into the great Matterhorn crevasse below.

I still had my iPhone to take pictures. But it's touch screen required me to take my glove off. With the temperature at 10 degrees below freezing, photos were not worth risking fingers to frostbite. So, you'll just have to read about it.

During the first half of the 19th century, the Matterhorn was the Holy Grail among climbers, and was considered impossible to conquer. Englishman Edward Whymper finally led a seven-man team to the top in 1865. He pioneered the same Hornli Ridge route that I was ascending today.

But on the way down a rope broke and four perished. One body was never found. Today, you can see the rope in a Zermatt museum, a crude manila affair, along with the clothes from another dead climber found months later.

Some 5,000 now attempt the climb every year, and about 500 make it to the summit. Ulrich Inderbinen made the top more than 370 times and last climbed it when he was 90. I was able to shake his hand at a picture signing in Zermatt a couple of years before he died from old age at 103 (click here for his obituary).

At 13,000 feet we approached the Moseley slab, so named for an American who fell to his death here in 1879. Beyond beckoned the Solvay Hut, a tiny, precariously sited rescue from weather that suddenly turns bad.

Taking a break, I found, amazingly, that I still had cell phone reception. Should I send out a Trade Alert from 13,133 feet?

That was where I encountered my first zombie, a climber who grievously underestimated the mountain and had used up every ounce of energy to get this far. His guide was coaxing, shouting and cajoling him to climb down one rock at a time.

Looking at his dead eyes, you know it was going to be a tough and dangerous descent. I later heard that the poor fellow, Japanese, fell and broke his leg and had to be helicoptered off.

There were many more zombies to come.

Above Solvay, we encountered the "fixed ropes," which are actually steel cables bolted to the face to help traverse the steepest and most dangerous passages. Lose your grip here, and its 3,000 feet straight down.

This is where we ran into the traffic jam, with simultaneous ascending and descending climbers competing for the same handholds. One dummy actually abseiled down on top of me, nearly knocking me off of my grip. Here, falling climbers are a major danger.

At 300 feet below the summit I passed Sophie's Ridge, so named for a young Italian woman who was turned back in the 1880's because high winds were embarrassingly blowing her Victorian ankle-length dress above her waist.

Now, altitude sickness was taking its toll, with many puking climbers turning back, the disappointment showing on their faces. Luckily, I felt fine.

Not far from there was the location of the original 1865 accident. Then we approached the small bronze statue of Saint Bernard, the patron saint of mountain climbers.

Bolted to the side of the peak, it was covered with ropes, as many teams tie on to it to rappel down.

Then we were on top. The weather was glorious. The summit was graced with a wrought iron cross that one finds atop many Alpine peaks. There was an impatient line of climbers waiting their turn to tag the summit, take some quick pictures, pick up a rock, and then start their way down.

The feeling of accomplishment was immense.

We carefully picked our way down, rappelling down the steepest faces. By now the sun was well up, the ice was melting, freeing up infinitely more loose rubble. One boulder the size of a small car crashed down 50 feet away, making a thunderous roar.

"Yikes," I thought. "We better get out of here."

At 13,000 feet, we encountered a team with one climber absolutely paralyzed with fear and refusing to budge. After some discussion, I agreed to let her rope up with us and escort her down to the Hornli Hut. The other guide was Christian's friend, and that would enable him to continue upward with his other clients. Our expedition turned into a mountain rescue.

Once Christian tied her in, I had second thoughts about being so charitable. If she fell, she could take me with her. Christian then convinced me he could hold both of us with a belay. We then encouraged her down the mountain one step at a time. I went through my entire repertoire of German jokes, which is rather short.

I learned that she sold toilets on behalf of a Swiss plumbing company for a living, and that until today had never done anything more serious than a day hike out of Lausanne.

All of her equipment was brand new. Part of the problem was that she had failed to don her crampons, which we found in her backpack, untouched in its original packaging.

Back at the Hornli Hut I was dog tired. Our impromptu guest suddenly fell to the ground and burst into tears. She then bought us both a celebratory liter of beer each. I was dying of thirst, as I had done the entire climb on just two quarts of water to save weight.

It had been the hardest day of my life and after 15 minutes at the table I couldn't move. The $1,200 investment in Christian had been well spent. He departed for Zermatt to pick up his next client.

I elected to spend a second night at Hornli and complete the 3,000-foot-hike down to Schwarzsee the next day. From there I was taking the gondola down. Nothing left to prove here. The second time, I slept like a rock.

It is traditional for successful climbers to pick up a stone at the summit and deposit it on a giant cairn at the beginning of the trail at 7,000 feet. Some of these weigh more than 50 pounds, a macho display of strength and endurance. When I made my contribution, a small pebble the size of a quarter, I made sure no one was looking.

I now have an empty place on my bucket list. What will replace it? I hear that Africa's 19,341-foot Mount Kilimanjaro is pretty easy.

Life is good.

Climbing One Step at a Time

 

Only 4,000 Feet to Go

 

Halfway and All Is Good

 

 

The Traffic Jam

 

The Summit

 

 

A Mountain Rescue

 

 

Take That Item off the Bucket List

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MHFTR

August 1, 2018 - Quote of the Day

Diary, Newsletter, Quote of the Day

"This is very bullish for markets. It's bullish for markets intermediate term. Before, I thought we were in the seventh inning of a four-year bull market. Two waiters just came in and delivered another punch bowl. We're going into extra innings, baby," said Stanley Druckenmiller formerly of hedge fund Duquesne Capital Management, about the Fed's decision not to taper.

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MHFTR

July 31, 2018

Diary, Newsletter

Global Market Comments
July 31, 2018
Fiat Lux

Featured Trade:
(LAST CHANCE TO ATTEND THE FRIDAY, AUGUST 3
AMSTERDAM, THE NETHERLANDS GLOBAL STRATEGY DINNER),
(THE INSIDER'S VIEW ON THE FUTURE OF TECHNOLOGY),
(AMZN), (GOOG), (DELL), (MSFT), (EBAY),

(MY DATE WITH HITLER'S GIRLFRIEND)

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MHFTR

Last Chance to Attend the Friday, August 3 Amsterdam, The Netherlands Global Strategy Dinner

Diary, Newsletter

Come join John Thomas at the Mad Hedge Fund Trader's Global Strategy Dinner, which I will be conducting in Amsterdam, The Netherlands, on Friday, August 3, 2018 at 7:00 PM. A three-course dinner will be followed by an extended question-and-answer period.

I'll be giving you my up-to-date view on stocks, bonds, foreign currencies, commodities, precious metals, energy, and real estate. And to keep you in suspense, I'll be throwing a few surprises out there, too. Tickets are available for $229.

The dinner will be held at a downtown Amsterdam hotel near The Dam, and the location will be on the "Thank You" screen after your purchase.

I look forward to meeting you and thank you for supporting my research.

To purchase tickets, please click here.

 

https://www.madhedgefundtrader.com/wp-content/uploads/2013/05/Amsterdam.jpg 319 479 MHFTR https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png MHFTR2018-07-31 01:08:252018-07-31 01:08:25Last Chance to Attend the Friday, August 3 Amsterdam, The Netherlands Global Strategy Dinner
MHFTR

July 30, 2018

Diary, Newsletter

Global Market Comments
July 30, 2018
Fiat Lux

Featured Trade:
(THE MARKET OUTLOOK FOR THE WEEK AHEAD,
or POURING GASOLINE ON THE FIRE),
(MSFT), (AMZN), (FB), (NFLX), (TWTR),
(TESTIMONIAL)

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MHFTR

The Market Outlook for the Week Ahead, or Pouring Gasoline on the Fire

Diary, Newsletter, Research

Pour gasoline on a fire and you get a reaction. It's a simple matter of physics. That is the natural result of hitting the economy with tax cuts, fiscal stimulus, and low interest rates all at once. But at what price?

Of course, the headline number of the week was the first read on Q2 GDP growth, which came in at a strong 4.1%, the hottest number in four years. What was one of the biggest contributors? Soybean sales, as buyers rushed to beat the imposition of retaliatory Chinese tariffs. Consumers also hit the stores hard, spending their rising by a robust 4%.

The big question now is how much of this is sustainable? The answer is probably not much, which leaves investors with the queasy feeling that by coming in now they risk buying the absolute peak in the stock market. By temporarily pulling forward so much growth you may be creating a growth hole in Q3. So better mark your calendars now.

Q2 almost always delivers a string rebound from a usually weak Q1. The tax cuts delivered a one-time-only boost. But the investment spending that the administration had hoped for hasn't materialized, with a disproportionate portion of corporate profits going into share buybacks instead. Inventories are rising sharply, which is always bad.

We'll know for sure in a year when a recession will most likely begin. And remember, this extra growth is at the expense of an increase in the national debt by 10%, from $21 trillion to $23 trillion. And that is definitely NOT sustainable, but everyone in the world seems to have forgotten that, except me!

Interestingly, the report placed the current inflation rate dead on the Fed's target at 2.0%. That is a guarantee that any continued economic strength will be offset by rising interest rates.

The Facebook (FB) earnings highlighted the poor risk/reward of buying tech stocks at these elevated levels. Facebook shares plunged by 20% on their earnings announcement, creating the largest single day loss of market capitalization in history, some $120 billion. It was obviously a "kitchen sink" quarter.

If you get an earnings beat, as you did with Microsoft (MSFT) and Amazon (AMZN), you get a 2-, 3-, 4% pop in the stock price. If you disappoint, as did Facebook, Netflix (NFLX), and Twitter (TWTR), they crater by 10% to 20%. It is all typical end-of-cycle price action.

On the other hand, Amazon knocked the cover off the ball with its earnings, which came in at double analyst forecasts. The company is about to reach my end 2018 target of $2,000 a share. That is double the February lows.

Amazon Web Services delivered a stunning $6.1 billion quarterly revenue, up 49% YOY. Advertising is now becoming a major factor, as the company challenges Google (GOOG) and Facebook. For more on the longer-term prospects of Jeff Bezos's incredible company please see the special report that I published yesterday.

Bonds (TLT) continued their moribund price action, barely eking out a gain in yields to 2.97%. Either they are already discounting the next recession, are flooded with cash from a global QE hangover, or are getting a nice flight to safety bid brought on by multiple trade wars. Most likely it is all three.

Better to opine from the sidelines than to attempt to trade in the least volatile bond market conditions in 30 years.

As for gold, it continues to be a trader's worst nightmare as it plums new 2018 lows. Clearly, globally rising interest rates are not of what bull markets in gold are made. It doesn't help that Venezuela continues to hammer the market by liquidating its entire gold reserves on its way to national bankruptcy. Whenever distress liquidations take place, they are bad for everyone, not just the seller. Competition from crypto currencies for the speculative dollar doesn't help either.

As I have been sitting on top of an Alp contemplating the future and out of the markets, my 2018 year-to-date performance remains unchanged at an eye-popping 24.82% and my 8 1/2- year return sits at 301.29%. The Averaged Annualized Return stands at 35.10%. The more narrowly focused Mad Hedge Technology Fund Trade Alert performance is annualizing now at an impressive 38.69%.

It will be a big week on the data front, with an FOMC Meeting and an onslaught of jobs data.

On Monday, July 30 at 10:00 AM we obtain the June Pending Home Sales.

On Tuesday, July 31 at 9:00 AM EST, then we get the May S&P CoreLogic Case-Shiller National Home Price Index.

On Wednesday, August 1 at 2:00 PM, the Fed announces its decision on interest rates. Given the hot 4.1% Q2 GDP report, another 25-basis point rate rise is entirely possible.

Thursday, August 2, leads with the Weekly Jobless Claims at 8:30 AM EST, which saw a rise of 9,000 last week to 219,000.

On Friday, August 3 at 9:15 AM EST we get the July Nonfarm Payroll Report. Then the Baker Hughes Rig Count is announced at 1:00 PM EST.

As for me, the highlight of the week was being handed the keys to the City of Zermatt by the mayor for visiting for the 50th year. Yes, I camped out here at the Youth Hostel in 1968. Also, with the honor came a Swiss Army knife with my name on it and a beautiful 10-pound coffee table book outlining the route I usually take to the Matterhorn summit.

I am now contemplating my return to the U.S., which is always hellish. It will require two trains (to Visp and Geneva), two flights (to Amsterdam and San Francisco), the last one of which lasts a punishing 10 1/2 hours. Then there is the eight hours of jet lag to deal with when I get home. So, I'll be getting up at 2:00 AM for a while. During those days I will be posting some of my favorite pieces from the past.

Still, to see the 14,692-foot Matterhorn from where I am sitting in the brilliant sunshine in all its glory, listening to an Alpine river rushing outside my window, and watching the swaying pines, it is all worth it.

Good luck and good trading.

 

 

 

 

 

 

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MHFTR

July 27, 2018

Diary, Newsletter

Global Market Comments
July 27, 2018
Fiat Lux

Featured Trade:
(LAST CHANCE TO ATTEND THE FRIDAY, AUGUST 3, 2018,
AMSTERDAM, THE NETHERLANDS GLOBAL STRATEGY DINNER),

(STOCKS TO BUY ON THE OUTBREAK OF TRADE PEACE),
(QQQ), (SPY), (SOYB), (CORN), (WEAT), (CAT),
(DE), (BA), (QCOM), (MU), (LRCX), (CRUS),
(ORIENT EXPRESS PART II, or REPORT FROM VENICE)

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MHFTR

Stocks to Buy on the Outbreak of Trade Peace

Diary, Newsletter, Research

So, how will the trade war end? It could be the crucial trading call of 2018.

"That which can't continue, won't," I paraphrase the noted economist Herbert Stein. I think that logic neatly applies to our global trade wars today.

In 1970, some 25% of world GDP was accounted for by international trade. Today it is 52%. Germany has been the powerhouse, with trade growing from 25% to 80%, largely through exploding auto exports. Trade growth in the U.K. has been pitiful as the old colonial ties loosened, improving only from 40% of GDP to 52%.

In the U.S., trade has grown from 10% to 25% of GDP during this time. It is far lower than the rest of the G7 nations because of the massive size of its domestic economy.

Still, placing restraints on 25% of U.S. GDP, or about $5 trillion, is quite a big hit. Think an imminent recession, quite possible a severe one. The $13 billion in subsidies offered the agriculture sector is but a drop in the bucket. It would be like killing off the goose that laid the golden egg.

Trump has a weak hand, which is growing weaker by the day. It is just a matter of time before he folds. Not to do so would entirely wipe out the benefits of the December tax package, yet still leave the U.S. government with $2 trillion in new debt. It is a perfect money destruction machine.

My bet is that Trump will claim victory at some point soon, regardless of what transpires on the negotiation front. Take the trade war away, and stocks will immediately jump 10%. That's what the stock market thinks, with NASDAQ (QQQ) at an all-time high, and the S&P 500 (SPY) just short of one. Stocks are trading over the medium term as if Donald Trump doesn't exist.

Which stocks should you buy when trade peace breaks out? Buy those that have suffered the most. The ags have to be at the top of your list, such as Soybeans (SOYB), Corn (CORN), and Wheat (WEAT), the worst hit. The old industrials such as Caterpillar (CAT), John Deere (DE), and Boeing (BA) also have to be a priority.

In the technology area you have to rotate out of the FANGs and into chip stocks, the worst performers of the sector this year. Perhaps this is what the market is shouting at us with the horrific one-day decline in Facebook (FB) yesterday. China relies on the U.S. for 80% of its chips and all of its high-end graphics cards.

China's canceling of the QUALCOM (QCOM) takeover of its NXP Semiconductors shows to what extent it is willing to retaliate in the tech area. Chip stocks to buy for the rebound should include Micron Technology (MU), Cirrus Logic (CRUS), and Lam Research (LRCX).

Even if the trade war ends tomorrow, business conditions will never be the same. Confidence in American reliability will never completely recover. Sure, Trump will be gone in 2 1/2 years. But what if he is replaced by someone worse? Trading with the United States now incurs a level of political risk not seen since the War of 1812, when Washington burned.

But no trade war is certainly better than a trade war if you are a trader or investor.

 

 

 

 

 

Telling the Captain How to Steer the Ship

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MHFTR

Orient Express Part II, or Report from Venice

Diary, Newsletter

If you ever need someone to owe you a big favor, make sure it is the world's best hotel.

That is what I discovered when I checked into the legendary Cipriani Hotel in Venice, Italy. I had booked its cheapest room at $1,500 a day. Due to a screwup on the reservations, I learned to my great distress that I could stay only one night.

 

 

The good news was that the hotel graciously offered me a free upgrade to its presidential suite, a two-bedroom palace stuffed with 18th century antiques, exquisite Murano glass chandeliers, and its own private pier and driver.

All of this was a bargain for $12,000 a day. Would you care for a $1,000 complimentary dinner for two? And, oh, seniore, could we please cover the cost of the rest of your entire stay in Venice at the Hotel Danieli, a 16th century palace that was the city's other trophy hotel? Total value of these freebies: $18,000.

Thank you Orient Express!

 

Thus, my stay in Venice was off to a spectacular and serendipitous start. They say, "See Venice, and die." That's because so many drop dead when they get the bill.

Feel like a continental breakfast for two with cappuccino for $100? It was all worth it, as breakfast on the roof of the Danieli was one of those once-in-a-lifetime, bucket-list-type experiences.

Watercraft churned by in the hundreds, including ancient gondolas, wheezing, smoky old vaporettos, water taxis, inflatable dinghies, and even sailboats. I fought the seagulls for the butter patties, which if not eaten immediately, melted in the heat.

 

Squeezing my way through the crowded alleyways of this enchanted Renaissance city, I caught a snapshot of the global economy.

The only Americans I saw were either young hedge fund traders wearing Rolex watches, or technology moguls cashing in this year's bubblicious prices. The rest were clearly scared off by the price tag.

The Japanese were still there in force. But the groups included many single spinster women in their 30s and 40s escorting their parents, unable to get married in an economy that has shown almost no growth in two decades.

 

They were joined by large tour groups from the up-and-coming economies of China and Brazil, their leaders barking out orders and leading the charge with large umbrellas or flags.

The super yachts of the Russian oligarchs lined the waterfront, conspicuous with their obscure Caribbean flags of convenience.

Extended Arab families that included two, three, or even four wives, and uncountable children in designer togs could be spotted in the best restaurants, the women laboring in their burkas in the 95-degree humid heat. It seems that oil even at $75 a barrel will cover every bill and excuse any excess.

 

 

I have been coming here since 1968, and am never disappointed. I made my ritual stop by Harry's Bar for a champagne Bellini, and strolled past the American Express office where I used to pick up my mail during my wild and reckless, pre-Internet youth.

I made a pilgrimage to Quadracci's on the Piazza San Marco, where my grandfather used to sip espresso with another young ambulance driver named Ernest Hemingway during WWI. Family legend has it that Hemingway modeled his Italian driver friend on grandpa, who in the book Farewell to Arms gets killed.

That night, I had the concierge send a speedboat around to my room to take me across the lagoon to the Casino at the Lido. An Arab at my blackjack table was losing $50,000 a hand and sending out hugely negative vibes, so I moved.

I just wanted to let you know where the money for your $4 a gallon gasoline was going. As I was playing merely to see who was there, I gave my winnings to the dealer, who gave me a big grazie. It seems that Italians are lousy tippers.

On my way back, I stood in my powerboat alone, holding on to the cabin and racing across the water at 40 knots in the darkness, wearing my white dinner jacket and bow tie, the wind blowing through my hair, thinking life is good and feeling every inch the James Bond.

I better come up with some new trades to pay for all of this. I mentally prepared myself for my strategy luncheon the next week in Amsterdam.

To be continued.

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MHFTR

July 27, 2018 - Quote of the Day

Diary, Newsletter, Quote of the Day

"If you can't make yourself loved, make yourself feared," said Mayer Amschel Rothschild, founder of the banking dynasty.

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Page 361 of 823«‹359360361362363›»

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