
Global Market Comments
December 26, 2013
Fiat Lux
Featured Trade:
(INDIA IS CATCHING UP WITH CHINA),
(PIN), (FXI),
(WHO SAYS HEDGE FUNDS AREN?T ADDING VALUE?)
(PETER F. DRUCKER ON MANAGEMENT)
PowerShares India (PIN)
iShares China Large-Cap (FXI)
When I first visited Calcutta in 1976, more than 800,000 people were sleeping on the sidewalks, I was hauled everywhere by a very lean, barefoot rickshaw driver, and drinking the water out of a tap was tantamount to committing suicide.
Some 36 years later, and the subcontinent is poised to overtake China's white hot growth rate.
My friends at the International Monetary Fund just put out a report predicting that India will grow by 8.5% this year. While the country's total GDP is only a quarter of China's $5 trillion, its growth could exceed that in the Middle Kingdom as early as 2013. Many hedge funds believe that India will be the top growing major emerging market for the next 25 years, and are positioning themselves accordingly.
India certainly has a lot of catching up to do. According to the World Bank, its per capita income is $3,275, compared to $6,800 in China and $46,400 in the US. This is with the two populations close in size, at 1.3 billion for China and 1.2 billion for India.
But India has a number of advantages that China lacks. To paraphrase hockey great, Wayne Gretzky, you want to aim not where the puck is, but where it's going to be. The massive infrastructure projects that have powered much of Chinese growth for the past three decades, such as the Three Gorges Dam, are missing in India. But financing and construction for huge transportation, power generation, water, and pollution control projects are underway.
A large network of private schools is boosting education levels, enabling the country to capitalize on its English language advantage. When planning the expansion of my own business, I was presented with the choice of hiring a website designer here for $60,000 a year, or in India for $5,000. That's why booking a ticket on United Airlines or calling technical support at Dell Computer gets you someone in Bangalore.
India is also a huge winner on the demographic front, with one of the lowest ratios of social service demanding retirees in the world. China's 30-year-old 'one child' policy is going to drive it into a wall in ten years, when the number of retirees starts to outnumber their children.
There is one more issue out there that few are talking about. The reform of the Chinese electoral process at the People's Congress in 2013 could lead to posturing and political instability, which the markets could find unsettling. India is the world's largest democracy, and much of its current prosperity can be traced to wide ranging deregulation and modernization that took place 20 years ago.
I have been a big fan of India for a long time, and not just because they constantly help me fix my computers, make my travel reservations, and tell me how to work my new altimeter watch. In August, I recommended Tata Motors (TTM), and it has gone up in a straight line since, instantly making it one of my top picks of the year. On the next decent dip take a look at the Indian ETF's (INP), (PIN), and (EPI).
Better to Own This Pyramid
Than This Pyramid
Taxi! Taxi!
Global Market Comments
December 24, 2013
Fiat Lux
Featured Trades:
(A CHRISTMAS STORY),
(THE U-HAUL INDICATOR)
It is the end of the school year at the University of California at Berkeley, and the unenviable task of moving my son, a senior, out of his hovel for the holidays fell to me.
When I arrived, I was stunned to find nothing less than a war zone. Both sides of every street were lined with mountains of trash, the unwanted flotsam and jetsam cast aside by departing students. Computer desk, stained mattresses, broken lava lamps, and an assortment of heavily worn Ikea furniture were there for the taking. Newly arriving students were sifting through the piles looking for that reusable gem. Diminutive Chinese teenagers were seen pushing massive suitcases on wheels down the sidewalk on their way back to Shanghai, Beijing, and Hong Kong. The university attempted to bring order to the chaos by strategically placing dumpsters on every block, but they were rapidly filled to overflowing.
It was all worth it because of the insight it gave me into one of my favorite, least known leading economic indicators. When I picked up the truck at U-HAUL, the lot was absolutely packed with returned vehicles, and there were more parked on both sides of the streets. The booking agent told me there is a massive influx of people moving into California from the Midwest and the Northwest, with the result that lots all over the San Francisco Bay Area are filled to capacity.
I love this company because in addition to providing a great service, they get the first indication of any changes to the migratory habits of Americans. The last time I saw this happen was after the dotcom bust, when thousands of tech savvy newly unemployed pulled up stakes in the foggy city and moved to Lake Tahoe to work in ?the cloud.? Bottom line: California is enjoying a resurgence of hiring and new economic growth. This is what the stock market is seeing that you and I can?t.
Want a Great Deal on a Used Lava Lamp?
Global Market Comments
December 23, 2013
Fiat Lux
Featured Trade:
(THE ONE BRIGHT SPOT IN REAL ESTATE),
(A SHORT HISTORY OF HEDGE FUNDS),
(THE POPULATION BOMB ECHOES), (POT), (MOS), (AGU),
(THANK GOODNESS I DON?T LIVE IN SWEDEN), (EWD)
Potash Corp. of Saskatchewan, Inc. (POT)
The Mosaic Company (MOS)
Agrium Inc. (AGU)
iShares MSCI Sweden (EWD)
Global Market Comments
December 20, 2013
Fiat Lux
SPECIAL END OF YEAR ISSUE
Featured Trades:
(GO LONG CHRISTMAS CHEER AND HOT BUTTERED RUM),
(A SPECIAL NOTE ON EXERCISED OPTIONS)
Global Market Comments
December 19, 2013
Fiat Lux
Featured Trade:
(MAD HEDGE FUND TRADER PROFIT HITS 63%),
(SPY), (TLT), (FXY), (SFTBY), (AAPL), (XLF),
(I WAS WRONG?.BUT IT DIDN?T MATTER)
(A DIFFERENT VIEW OF THE US)
(THE STRUCTURAL BEAR CASE FOR TREASURY BONDS),
(TLT), (TBT)
SPDR S&P 500 (SPY)
iShares 20+ Year Treasury Bond (TLT)
CurrencyShares Japanese Yen Trust (FXY)
SoftBank Corp. (SFTBY)
Apple Inc. (AAPL)
Financial Select Sector SPDR (XLF)
ProShares UltraShort 20+ Year Treasury (TBT)
The performance of the Mad Hedge Fund Trader?s Trade Alert Service is still going ballistic, reaching the heady height of 63.08% for the year.
Including both open and closed trades, 24 out of the last 26 consecutive Trade Alerts have been profitable. The results so far in December are up a stunning +7.04.
The three-year return is an eye popping 118%, compared to a far more modest increase for the Dow Average during the same period of only 32%.
That brings my averaged annualized return up to 39.3%.
This has been the profit since my groundbreaking trade mentoring service was launched three years ago. It all is a matter of the harder I work, the luckier I get.
I held on to every risk on position during the two-week December correction, fully expecting the pause to become the springboard for a new run to all time highs by year-end. That is exactly what happened in the wake of the Federal Reserve?s decision to taper its quantitative easing program by only $10 billion a month, mere sofa change given the size of our bond market.
That sent off to the races my long positions in the Financials Select Sector SPDR (XLV), the S&P 500 (SPY), and Internet giant Softbank (SFTBY). I cashed in one of my three short positions in the Japanese yen (FXY), which broke to new multiyear lows. I kept my shorts in the Treasury bond market (TLT), which crashed. I?ll double up here on the next rally.
It looks like I still have room to take in a few more percentage points in profits before 2014. Japan should explode to the upside tonight, where I am maintaining a hefty 40% weighting in my model trading portfolio. My followers will spend New Years laughing all the way to the bank.
This is how the pros do it, and you can too, if you wish.
Carving out the 2013 trades alone, 77 out of 92 have made money, a success rate of 83%. It is a track record that most big hedge funds would kill for.
My esteemed colleague, Mad Day Trader Jim Parker, has also been coining it. Since April, his own performance numbers have just come back from the auditors, revealing that he is up a staggering 279%.
The coming winter 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 in 2014. The Trade Alerts should be coming hot and heavy. Please join me on the gravy train. You will never get a better chance than this to make money for your personal account.
Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011 and 14.87% in 2012. The service includes my Trade Alert Service and my daily newsletter, the Diary of a Mad Hedge Fund Trader. You also get a real-time trading portfolio, an enormous trading idea database, and live biweekly strategy webinars. Upgrade to?Mad Hedge Fund Trader PRO?and you will also receive Jim Parker?s?Mad Day Trader?service.
To subscribe, please go to my website at www.madhedgefundtrader.com, find the ?Global Trading Dispatch? box on the right, and click on the lime green ?SUBSCRIBE NOW? button.
Global Market Comments
December 18, 2013
Fiat Lux
Featured Trade:
(THE RECEPTION THAT THE STARS FELL UPON),
(NLR), (CCJ), (CORN), (WEAT), (SOYB), (DBA),
(OIL ISN?T WHAT IT USED TO BE), (USO),
(TAKING A BITE OUT OF STEALTH INFLATION), (SGG), (WEAT)
Market Vectors Uranium+Nuclear Enrgy ETF (NLR)
Cameco Corporation (CCJ)
Teucrium Corn (CORN)
Teucrium Wheat (WEAT)
Teucrium Soybean (SOYB)
PowerShares DB Agriculture (DBA)
United States Oil (USO)
iPath DJ-UBS Sugar TR Sub-Idx ETN (SGG)
Virtually every analyst has been puzzled by the seeming immunity of stock markets to high oil prices this year. In fact, stocks and crude have been tracking almost one to one on the upside. The charts below a friend at JP Morgan sent me go a long way towards explaining this apparent dichotomy.
The first shows the number of barrels of oil needed to generate a unit of GDP, which has been steady declining for 30 years. The second reveals the percentage of hourly earnings required to buy a gallon of gasoline in the US, which has been mostly flat for three decades, although it has recently started to spike upwards.
The bottom line is that conservation, the roll out of more fuel efficient vehicles and hybrids, and the growth of alternatives, are all having their desired effect. Developed countries are getting six times more GDP growth per unit of oil than in the past, while emerging economies are getting a fourfold improvement. The world is gradually weaning itself off of the oil economy. But the operative word here is 'gradually', and it will probably take another two decades before we can bid farewell to Texas tea, at least for transportation purposes.



















