?If the dollar stays up here, a lot of companies are going to have to re price their products. Very few firms have the pricing power of Apple,? said my friend, Dan Niles, of Alpha One Partners.
Global Market Comments
March 26, 2015
Fiat Lux
Featured Trade:
(FRIDAY, APRIL 17 INCLINE VILLAGE, NEVADA STRATEGY LUNCHEON),
(FRIENDS WHO WILL EXECUTE MY TRADER ALERTS FOR YOU),
(HOW TO EXECUTE A VERTICAL BULL CALL SPREAD)
(AAPL)
Apple Inc. (AAPL)
Practically every day, I get emails from readers asking me to take over management of their money so I can execute my Trade Alerts for them.
With an 80% success rate an average annualized return, why wouldn?t they?
Unfortunately, I have to turn these invitations down. Watching the market, doing the research for new Trade Alerts, keeping up with a global speaking schedule and running the Mad Hedge Fund Trader empire is so demanding that I have little time for anything else.
On top of that, I have my unpaid ?hobby? of advising various arms of the United States government, including The White House, the US Treasury, The Federal Reserve and the Joint Chiefs of Staff. When the call comes from Washington DC to jump, I ask ?How high??
Any other patriot would do the same.
In any case, actively managing someone else?s money would raise conflicts of interest and regulatory problems. I learned early on at Morgan Stanley decades ago to stay miles away from the ?grey? areas. Leave those marginal lines of business to competitors.
However, there is one way I can help.
Thousands of our qualified, skilled and well-intentioned financial advisors read this letter every day. They deliver great service and excellent performance for their clients, and don?t charge much for the service.
If you think you would benefit from third party assistance on trade execution, send an email to Nancy at customer support, support@madhedgefundtrader.com, put ?FINANCIAL ADVSIOR ASSISTANCE? in the subject line.
Please include you contact information, phone number, age, level of financial sophistication and assets management. We will try to hook you up with someone in your area.
I won?t be getting anything out of this. I merely wish that readers get the most out of our products and participate in the Mad Hedge Fund Trader global trading and investment community.
Anything I can do to enhance your profits and level the dreadfully uneven playing field with Wall Street is a win for me.
John Thomas
The Mad Hedge Fund Trader
?In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing,? said President Theodore Roosevelt, whose oldest daughter, Alice Roosevelt Longworth I once met.
Global Market Comments
March 25, 2015
Fiat Lux
Featured Trade:
(THE BLOCKBUSTER READ IN THE HEDGE FUND COMMUNITY),
(AMERICA?S NATIVE INDIAN ECONOMY)
Global Market Comments
March 24, 2015
Fiat Lux
Featured Trade:
(FRIDAY, APRIL 3 HONOLULU, HAWAII STRATEGY LUNCHEON)
(TEN REASONS WHY STOCKS ARE STILL GOING UP),
(AAPL), (IBM), (XOM), (WFC), (INTC), (DXJ), (COP)
Apple Inc. (AAPL)
International Business Machines Corporation (IBM)
Exxon Mobil Corporation (XOM)
Wells Fargo & Company (WFC)
Intel Corporation (INTC)
WisdomTree Japan Hedged Equity ETF (DXJ)
ConocoPhillips (COP)
While driving back from Lake Tahoe last weekend, I received a call from a dear friend who was in a very foul mood. He had bailed on all his equity holdings at the end of last year, fully expecting a market crash in the New Year.
Despite market volatility doubling, multinationals getting crushed by the weak euro and the Federal Reserve now signaling its first interest rate rise in a decade, here we are with the major stock indexes sitting at all time highs.
Why the hell are stocks still going up?
I paused for a moment as a kid driving a souped up Honda weaved into my lane of Interstate 80, cutting me off. Then I gave him my response, which I summarize below:
1) There is nothing else to buy. Complain all you want, but US equities are now one of the world?s highest yielding securities, with a lofty 2% dividend. That compares to one third of European debt offering negative rates and US Treasuries at 1.90%.
2) Oil prices have yet to bottom and the windfall cost savings are only just being felt around the world.
3) While the weak euro is definitely eating into large multinational earnings, we are probably approaching the end of the move. The cure for a weak euro is a weak euro. The worst may be behind for US exporters.
4) What follows a collapse in European economic growth? A European recovery, powered by a weak currency. This is why China has been on fire, which exports more to Europe than anywhere else.
5) What follows a Japanese economic collapse? A recovery there too, as hyper accelerating QE feeds into the main economy. Japanese stocks are now among the worlds cheapest. This is why the Nikkei Average hit a new 15-year high over the weekend, giving me yet another winning Trade Alert.
6) While the next move in interest rates will certainly be up, it is not going to move the needle on corporate P&L?s for a long time. We might see a ?% hike and then done, and that probably won?t happen until 2016. In a deflationary world, there is no room for more. At least, that?s what Janet tells me.
This will make absolutely no difference to the large number of corporates, like Apple (AAPL), that don?t borrow at all.
7) Technology everywhere is accelerating at an immeasurable pace, causing profits to do likewise. You see this in biotech, where blockbuster new drugs are being announced almost weekly.
See the new Alzheimer?s cure announced last week? It involves extracting the cells from the brains of alert 95 year olds, cloning them and then injecting them into early stage Alzheimer?s patients. The success rate has been 70%. That one alone could be worth $5 billion.
8) US companies are still massive buyers of their own stock, over $170 billion worth in 2014. This has created a free put option for investors for the most aggressive companies, like Apple (AAPL), IBM (IBM), Exxon (XOM), Wells Fargo (WFC), and Intel (INTC), the top five repurchasers. They have nothing else to buy either.
They are jacking up dividend payouts at a frenetic pace as well and are expected to return more than $430 billion in payouts this year (see chart below).
9) Oil will bottom in the coming quarter, if it hasn?t done so already. This will make the entire energy sector the ?BUY? of the century, dragging the indexes up as well. Have you noticed that Conoco Phillips (COP), Warren Buffets favorite oil company, now sports a stunning 4.70% dividend?
10) Ditto for the banks, which were dragged down by falling interest for most of 2015. Reverse that trade this year, and you have another major impetus to drive stock indexes higher.
My friend was somewhat set back, dazzled, and non-plussed by my long-term overt bullishness. He asked me if I could think on anything that might trigger a new bear market, or at least a major correction.
I told him to forget anything international. There is no foreign development that could damage the US economy in any meaningful way. No one cares.
On he other hand, I could think of a lot of possible scenarios that could be hugely beneficial for US stocks, like a peace deal with Iran, which would chop oil prices by another half.
The traditional causes of recessions, oil price and interest rate spikes, are nowhere on the horizon. In fact, the prices for these two commodities, energy and money, are headed lower and not higher, another deflationary symptom.
Then something occurred to me. Share prices have been going up for too long and need some kind of rest, weeks or possibly months. At a 17 multiple American stocks are not the bargain they were 6 years ago when they sold for 10X earnings. Those were the only thing I could think of.
But then those are the arguments for shifting money out of the US and into Europe, Japan, and China, which is what the entire world seems to be doing right now.
I have joined them as well, which is why my Trade Alert followers are long the Wisdom Tree Japan Hedged Equity ETF (DXJ) (click here for ?The Bull Case for Japanese Stocks?).
With that, I told my friend I had to hang up, as another kid driving a souped up Shelby Cobra GT 500, obviously stolen, was weaving back an forth in front of me requiring my attention.
Whatever happened to driver?s ed?
Global Market Comments
March 23, 2015
Fiat Lux
Featured Trade:
(MAD HEDGE FUND TRADER HITS 10% PROFIT IN 2015),
(FXE), (EUO), (SPY), (GILD), (AA), (QCOM),
?(T), (LINE), (TBT), (ZIOP), (THRX), (ZTS), (USO),
(THE GREAT SOCIAL SECURITY MARRIAGE BENEFIT YOU?VE NEVER HEARD OF)
CurrencyShares Euro ETF (FXE)
ProShares UltraShort Euro (EUO)
SPDR S&P 500 ETF (SPY)
Gilead Sciences Inc. (GILD)
Alcoa Inc. (AA)
QUALCOMM Incorporated (QCOM)
AT&T, Inc. (T)
Linn Energy, LLC (LINE)
ProShares UltraShort 20+ Year Treasury (TBT)
ZIOPHARM Oncology, Inc. (ZIOP)
Theravance Inc. (THRX)
Zoetis Inc. (ZTS)
United States Oil ETF (USO)
I am sitting here at the Lone Eagle Grill in Incline Village, Nevada, enjoying a rare solo lunch. No one is asking me about the future of interest rates, if there is any gold inside Fort Knox or if the aliens really landed at Roswell, New Mexico.
My table overlooks majestic Lake Tahoe, and a brace of mallard ducks has just skidded across the smooth surface for a landing.
My big score last night was coming across a wild bobcat, the first I had ever seen in the Sierras. After cautiously studying me for a minute with his bright yellow glowing eyes, he scampered up the mountain.
My pastrami sandwich is cooked to perfection, and would give Manhattan?s best culinary effort a run for its money. In fact, I have enough food here for two entire meals. Bring on the doggie bag!
After surviving a meat grinder of a January, putting the pedal to the metal in February, and dodging the raindrops of March, the model-trading portfolio of the Mad Hedge Fund Trader has posted a year-to-date gain of 10%.
We have generated profits for followers every month this year, and are now a mere 4.75% short of a new all time performance high.
Mad Day Trader, Jim Parker, and myself have performed like tag team wrestlers, delivering winners for our paid subscribers one right after the other. Some 12 out of my last 14 Trade Alerts have been profitable.
I managed to nail the collapse in the euro (FXE), (EUO) big time, backing that up with profitable long positions in the S&P 500 (SPY), the Russell 2000, and Gilead Sciences (GILD).
When the markets turned jittery, I coined it with short positions in Alcoa (AA), QUALCOM (QCOM) and AT&T (T).
Only a premature long in oil (LINE) and a short in Treasuries (TBT) have scarred my numbers so far this year.
Jim has been on an absolute hot streak in 2015, shaking the Bull Run in biotechs for all it is worth (ZIOP), (THRX), (ZTS) and executing some perfectly times shorts in oil (USO).
This is compared to the miserable performance of the Dow Average, which is up a pitiful +2% during the same period.
The nearly four and a half year return of my Trade Alert service is now at an amazing 162.4%, compared to a far more modest increase for the Dow Average during the same period of only 51%.
That brings my averaged annualized return up to 38.2%. Not bad in this zero interest rate world. It appears better to take on some risk and reach for capital gains and trading profits, than surrender to the paltry fixed income yields out there.
This has been the profit since my groundbreaking trade mentoring service was first launched in 2010. Thousands of followers now earn a full time living solely from my Trade Alerts, a development of which I am immensely proud.
What saved my bacon this month was my instant and accurate decoding of Fed chairman Janet Yellen?s cryptic comments on the future of possible interest rate hikes, or the lack thereof.
We got to eat our ?patience? and have it too.
Wall Street gets so greedy, and takes out so much money for itself, there is now nothing left for the individual investor any more. They literally kill the goose that lays the golden egg.
The Mad Hedge Fund Trader seeks to address this imbalance and level the playing field for the average Joe. Looking at the testimonials that come in every day, I?d say we?ve accomplished that goal.
It has all been a vindication of the trading and investment strategy that I have been preaching to followers for the past seven years.
Quite a few followers were able to move fast enough to cash in on my trading recommendations. To read the plaudits yourself, please go to my testimonials page by clicking here.
Watch this space, because the crack team at Mad Hedge Fund Trader has more new products and services cooking in the oven. You?ll hear about them as soon as they are out of beta testing.
Our business is booming, so I am plowing profits back in to enhance our added value for you.
The coming year promises to deliver a harvest of new trading opportunities. The big driver will be a global synchronized recovery that promises to drive markets into the stratosphere by the end of 2015.
Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011, 14.87% in 2012, and 67.45% in 2013, and 30.3% in 2014.
Our flagship product,?Mad Hedge Fund Trader PRO, costs $4,500 a year. It includes?Global Trading Dispatch(my trade alert service and daily newsletter). You get a real-time trading portfolio, an enormous research database and live biweekly strategy webinars. You also get Jim Parker?s?Mad Day Trader?service and?The Opening Bell with Jim Parker.
To subscribe, please go to my website, ?www.madhedgefundtrader.com, click on the ?Memberships? located on the second row of tabs.
By the way, those of you who ran up huge profits with your euro shorts in January and February, and the overnight killing I scored with the Russell 2000 (IWM) this week, you all owe me new testimonials.
Ship em in!
Oh, and buy the way, there is no gold in Fort Knox. That is why Nixon took us off the gold standard in 1973. And the aliens did land at Roswell. Where do you think my iPhone and Tesla came from?
Looking for the Next Great Trade
Global Market Comments
March 20, 2015
Fiat Lux
SPECIAL JAPAN ISSUE
Featured Trade:
(FRIDAY, MAY 15 SAN FRANCISCO STRATEGY LUNCHEON)
(THE BULL CASE FOR JAPANESE STOCKS),
(DXJ), (SNE), (CAJ),
(IT?S ALL OVER FOR THE JAPANESE YEN),
(FXY), (YCS)
WisdomTree Japan Hedged Equity ETF (DXJ)
Sony Corporation (SNE)
Canon Inc. (CAJ)
CurrencyShares Japanese Yen ETF (FXY)
ProShares UltraShort Yen (YCS)