Jacque's Post Archives

July 19, 2023

(MY TIME IN LONDON)

July 19, 2023

Hello everyone,

Alex and I made it to the U.K. He is busy catching up with friends and cousins while I get to continue working. Not much downtime when you work for John.

London is packed with tourists – it’s exhausting just walking down the sidewalks because the tourists and the English don’t seem to have any concept of walking on the right or the left, so you spend the time walking diagonally and trying not to run into people.

As I write this on Sunday, July 16, we are an hour away from the start of the Wimbledon men’s final. Djokovic vs Alcaraz. Personally, I would love to see a new name on the Wimbledon Cup.

There seems to be a lot of strike action everywhere. And it's typically done in the high tourist season. Southwestern Railways are striking on certain days this coming week and the tube is shutting down from the 23rd to the 29th of July. It will be a nightmare. But I’m sure the English black cabs will do well.

We also have the actors under the Screen Actors Guild (SAG) going on strike as well. Start date for their strike was July 13.

It seems AI is the reason for the strike by the actors. They are seeking some regulation and reassurance about its use in the world of film. I thought technology was supposed to improve things, not be totally disruptive. But it seems that is the effect of new and improved technology, and we must accept that some will fall by the wayside, while others will embrace future technology and adapt.

The Reserve Bank of Australia has a new Governor. We welcome Michele Bullock. Bullock – who has worked at the bank for four decades - will be the ninth governor of the central bank from September after the Labour government decided not to extend Philip Lowe’s tenure.

The Reserve Bank and the Treasury forecasts have inflation moderating in the coming months. Notably, they have a tick-up in unemployment.

In the future, the RBA will be cutting the number of meetings it holds annually to set interest rates, from 11 to eight.

Everything is expensive here in London. Prices have gone up so much since I lived here five years ago. Inflation is running at 8%. I see it moderating over the course of the next few years.

English people can’t afford to live in the city anymore. So, they are now traveling long distances to get to work in the city. Tube and train strikes – which happen on a regular occasion in the UK – further complicate matters for workers. This is why the trend to work from home has been embraced by city workers and those with a side hustle.

Have a wonderful week.

Take care.

Cheers,

Jacquie

July 19, 2023/by Mad Hedge Fund Trader

July 17, 2023

Jacque's Post

(DINOSAUR SKELETONS ARE NOW CONSIDERED AN INVESTMENT)

July 17, 2023

Hello everyone,

Who would have thought that dinosaur skeletons would become a much-loved asset? We all know there are recent investment favourites like NFTs (non-fungible tokens), cryptocurrencies, cars, sporting cards, etc. And of course, there are the old favourites like art, wine, and stamps.

But collecting dinosaur artifacts is not a new phenomenon. The rich and famous have been dabbling in these investments for some time. Given global inflationary tendencies investors are looking for hard assets to protect their capital – and ideally achieve capital growth, too.

In the late 19th century, wealthy Wall Street financiers like Jean P Morgan and John D Rockefeller funded professional expeditions to unearth dinosaur fossils.

More recently – during the 2010s, Hollywood actors like Nicholas Cage and Leonardo DiCaprio publicly bid on dinosaur bones, which gave the sector a huge boost in visibility.

The go-to collector’s item for rich Asians is now a dinosaur skeleton which they show off in their living room.

The Covid pandemic was another boost to this asset class. Fossil hunting is something that is done out of doors and during the pandemic, this outdoor activity was one of only a handful of the things allowed, so fossil hunting grew in popularity.

In May 2022, a Deinonychus antirrhopus – a species that became one of the world’s most recognizable dinosaurs after the release of the movie “Jurassic Park” – sold for $12.4 million, with fees to an undisclosed buyer.

To show how prices have increased here are two examples. The first is a cave bear skull sold in New York for $4,750 in 2012. A similar skull was sold in 2022 bringing in well over $26,000 in Paris. Another example is a single T. rex tooth that sold for $11,250 in 2013. Nine years later, a similar tooth sold for nearly double the price. Even high-end replica skeletons are gaining popularity for those who cannot afford large original specimens.

Some important investment tips.

As with any investment, when looking into fossils big or small there are some general rules:

Do your homework. The more information you have about what is out there the better. Not all fossils are rare and there are any number of fakes. Sometimes items have been restored, substantially altered, or simply identified incorrectly.

Buy the best you can afford and don’t put all your eggs – especially dinosaur eggs – into one basket. Diversity is always a good investment plan.

Buy things with a proven track record and a clear chain of ownership. Though this won’t guarantee future success, it will give some guidance.

I will Wishing you all a great week.

Cheers,

Jacquie

July 17, 2023/by Mad Hedge Fund Trader

July 14, 2023

Jacque's Post

(The big end of town makes big bucks from the poor in the U.S.)

July 14, 2023

Hello everyone,

The markets are marching higher for now, until the next drama hits.

So, for now, skies are blue and the sun is out.

Come May, it may be a different story.

But let’s double down on the state of economic inequality in the U.S. It hasn’t really changed in the last 50 years. Who benefits? Big institutions and corporate America.

Matthew Desmond, a Pulitzer Prize-winning author, has a new book out called Poverty, by America, which explores why the U.S. poverty rate hasn’t improved in half a century. Around 11% of the U.S. population was considered poor in 2019; 12% was considered poor in 1970.
His previous book, Evicted: Poverty and Profit in the American City, won the 2017 Pulitzer Prize for general nonfiction.

In his latest book, Desmond explores the reason for the stagnation in the poverty rate and suggests that many Americans and corporations profit from tens of millions of people having so little. Banks make billions a year in overdraft fees. Companies can pay their workers low wages and save on benefits.

Desmond argues that when you look at inflation-adjusted earnings, ordinary workers have seen their pay tick up just 0.3% a year for several decades. So, in other words, the real wages for many Americans today are roughly what they were 40 years ago.

If you analyse the data from the U.S. Census Bureau and other sources, Desmond shows that 1 in 18 people in the U.S. live in what’s considered “deep poverty” or what he calls “a subterranean level of scarcity.”

In 2020, this included people making less than $6,380 a year, or families of four living on less than $13,100. In 2020, almost 18 million people in America lived in these conditions, including some 5 million children.

The racial wealth gap is just as wide as it was 50 years ago.
In 2019, the median white household had a net worth of $188,200, compared with $24,100 for the median Black household. Desmond writes that “our legacy of systematically denying Black people access to the nation’s land and riches has been passed from generation to generation.”

Overdraft fees are mostly paid by the poor.

In 2019, Desmond found that the largest U.S. banks charged Americans $11.68 billion in overdraft fees. Just 9% of those account holders paid the lion’s share, 84%, of those charges – customers who carried an average balance of less than $350. In other words, the poor were made to pay for their poverty is how Desmond sees it.

With Inflation the way it is – many of us probably feel that our wealth is being chewed up. The volatility will continue throughout the year in the markets, and we will see those without substance and longevity hung out to dry.

Just in: NY grand jury indicts Trump.

Have a great weekend.

Cheers,

Jacque

July 14, 2023/by Mad Hedge Fund Trader

July 12, 2023

Jacque's Post

What is the Baltic Dry Index?

July 12, 2023

Hello everyone,

Investors are always looking for practical economic indicators they can use to help them make informed investing decisions. The best way to do this is to look at practical indicators in the world around you – like looking at products your friends are buying or what stores always seem to be crowded. The Baltic Dry Index (BDI) is a practical economic indicator on a global scale.

The Baltic Dry Index is a measure of what it costs to ship raw materials – like iron ore, steel, cement, coal, and so on – around the world. The Baltic Dry Index is compiled daily by The Baltic Exchange. To compile the index, members of the Baltic Exchange call dry bulk shippers around the world to see what their prices are for 22 different shipping routes around the globe. Once they have obtained these numbers, they compile them and find an average. To ensure they are getting a comprehensive view of the entire shipping industry when looking at various shipping costs, the Baltic Exchange looks at costs for each of the following four sizes of ships:

Capemax – (10% of the global fleet)
Panamax (19 % of the global fleet)
Handymax, or Supramax (37% of the global fleet)
Handysize (34% of the global fleet)

Why Investors Watch the Baltic Dry Index

The BDI is a leading indicator that provides a clear view of the global demand for commodities and raw materials. The fact that the Baltic Dry Index focuses on raw materials provides a glimpse into the future. Producers buy raw materials when they want to start building more finished goods and infrastructure – like automobiles, heavy machinery, roads, buildings, and so on. Producers stop buying raw materials when they have excess inventory and when they stop infrastructure projects.

Typically, demand for commodities and raw goods increases when global economies are growing. For investors, knowing when the global economy is growing is helpful because that means stock prices, commodity prices and the value of commodity-based currencies should be increasing. Conversely, demand for commodities and raw goods decreases when global economies are stalling or contracting. For investors, knowing when the global economy is contracting is helpful because that means stock prices, commodity prices and the value of commodity-based currencies should be decreasing.

The Baltic Dry Index is also a powerful indicator because it is a simple, real-time indicator that is difficult to manipulate. Some economic indicators – like unemployment rates, inflation indexes, and oil prices – can be difficult to interpret because they can be manipulated or influenced by governments, speculators, and other key players. The Baltic Dry Index, on the other hand, is difficult to manipulate because it is driven by clear forces of supply and demand. The demand that affects the Baltic Dry Index is the demand of commodity buyers who need the raw goods for production. It is difficult to manipulate or distort demand because it is calculated solely by those who have placed orders to have raw goods shipped. Nobody is going to pay to book a Capemax cargo ship that isn’t actually going to use it.

Interpreting the Baltic Dry Index

The Baltic Dry Index typically increases in value as demand for commodities and raw goods increases and decreases in value as demand for commodities and raw goods decreases.

When the BDI starts moving up:

-Global economies are starting to, or continuing to, grow

-Companies are starting to, or continuing to, grow

-Stock prices should start to, or continue to, increase in value

-Commodity prices should start to, or continue to, increase in value

-The value of commodity currencies – like the Canadian dollar (CAD), the Australian dollar (AUD), and the New Zealand dollar (NZD) – should start to, or continue to, increase in value.

If the Baltic Dry Index is turning down, the opposite happens. Global economies and companies start to contract. Stock and commodity prices start to decrease, and the value of commodity currencies starts to decrease.

So, catching up with The Baltic Dry Index occasionally seems like a good idea to me.

Have a great week.

Cheers,

Jacque

"Never let the fear of striking out keep you from playing the game." - Babe Ruth

July 12, 2023/by Mad Hedge Fund Trader

July 10, 2023

Jacque's Post

July 10, 2023

Good afternoon,

Did anyone get the memo that the market would fall 500 and then rally hard after the Fed statement?

John didn’t and neither did I.

What a short covering event it was!

And did you see what Gold did? Straight up and then back down again.

Even with the Nasdaq rallying hard, the consensus is that it is still not a good time to be buying stocks.

Dan Niles, hedge fund manager of the Satori Fund, said he expects stock markets to fall by the middle of this year as the Federal Reserve opts to keep interest rates higher for longer. On Thursday, he told CNBC that there was a disconnect between market expectations and the U.S. central bank’s messaging.

Jerome Powell said he doesn’t expect to cut interest rates this year. However, interest rate swap data shows that a significant proportion of the market expects a cut in the base rate by the middle of this year.

Niles believes that when we get to mid-year, and it becomes obvious that the Fed is not going to be cutting rates, a realization is going to hit that the Fed is not going to help you out like people want.

Niles expects the S&P to fall to 3,000, 25% below its current level.

Elon Musk and Twitter

According to the Financial Times, Musk is planning to build a fiat payment system that could allow for crypto functionality later. Musk wants Twitter to be the “everything” app where the platform offers fintech services, like peer-to-peer transactions, savings accounts, and even debit cards.

Within a short amount of time, it is likely that Musk will run “Siri” out of town. Instead of talking to her on our phones about the weather, etc, we will converse with her cousin who will be organising our days and keeping us on track. The future is happening fast…

Have a great weekend.

Take care.

Cheers,

Jacque

July 10, 2023/by Mad Hedge Fund Trader

July 7, 2023

Jacque's Post

(HAWAII LUNCHEON REPORT)

July 7, 2023

Hello everyone,

Throughout the week I was there, the weather was awful. Wind, rain, and mostly overcast skies. However, the change of scenery and pace was very welcome.

John’s lunch was on Friday.

Seven of us were there including John. Topics of discussion were varied, and they included:

Ukraine and Russian conflict
Alternative energy and its effect on the economy
Covid and its effect on the economy

Ukraine and Russian conflict

John believes the conflict will be hard fought, but Ukraine will eventually triumph. Sanctions have eaten into Russia’s economy, but Russian people are used to doing it tough and they believe that Putin is doing the right thing. However, many young people have left the county for fear of being drafted into a war where soldiers are used as cannon fodder. It seems most are completely untrained. Russia is already looking to North Korea and Syria for assistance in providing weaponry, etc. The U.S.is supplying tanks, missiles, etc as is Germany and several other countries. Factories in the U.S. are working overtime to keep up the production of armaments.

Alternative energy and its effect on the economy

Solar is going to be the future. It will be cost-efficient and readily available. It will be an added benefit for businesses as it will reduce costs. It will open the possibility of developing solar energy businesses in remote geographical locations. It’s all about acquiring land and thinking about what’s possible 10 years from now.

Covid and its effect on the economy

This pandemic stopped businesses paying slave labour wages, particularly in hospitality. Nobody is going to work again for those wages, so many restaurants won’t open for lunch again, because they just cannot get the staff.

In hotels, there are no China cups anymore, only paper cups. There is no room service. You wear a bracelet on your arm to enter your room. Many services have been discontinued.

Many airline staff have never returned to their job since the pandemic. Or they have returned briefly only to put up with some obnoxious behaviour from airline customers, which quickly depleted the airline staff as many sought early retirements.

In the U.S., there are hiring signs in business windows everywhere. If they don’t let some of the Mexicans across the border to live and work in the U.S., those signs will stay there.

The pandemic forced everyone online and this is the way many of us will continue to do business. Many staff left their company as conflicts arose over vaccines and these people have carved out new businesses online and are working for themselves. Many people died and many took early retirement.

The effects of covid on the economy are still being worked out and analysed. We still have another two to three years of covid effects to work through.

The market is messy. Volatile this year due to inflation and post-pandemic factors. Gold will likely rise and the U.S.$ will fall. Two favourite stock picks would be Tesla (TSLA) and Nvidia (NVDA). And remember only buy them on dips.

Have a great week.

Cheers,

Jacque

“A life spent making mistakes is not only more honourable, but more useful than life spent doing nothing.”

July 7, 2023/by Mad Hedge Fund Trader

July 5, 2023

Jacque's Post

(INVESTING IN A S&P 500 INDEX FUND COULD BE A SMART MOVE)

Friday, July 5, 2023

Hello everyone,

Warren Buffett is a big fan of S&P 500 Index Funds, so maybe you should consider squirreling away some of that hard-earned cash into one of those funds. As Buffett says, it’s a way for investors to mitigate the risks that come with choosing individual stocks.

By investing in this product, you are essentially buying all the big companies through the S&P500. If you do it consistently and average in, you will end up with a very good investment.

The S&P500 is a market index that tracks the stock performance of around 500 large-company U.S. stocks, including Amazon, Google parent company Alphabet, Meta, and Visa.

While the index is not immune to overall market downturns, long-term investors have historically earned a nearly 10% average annual return. However, as with all investments, it is important to note that past performance can’t be used to predict future results.

Here’s how much you’d have now if you’d invested $1000 in the S&P500 about one, five, and 10 years ago:

$1000 a year ago would be worth $942 as of April 20.

$1000 five years ago would be worth $1,689 as of April 20.

$1000 10 years ago would have more than tripled to $3,217 as of April 20.

Choosing to buy an S&P 500 index mutual fund or exchange traded fund (ETF) gives you exposure to the index’s underlying stocks.

It’s less risky than owing individual shares. Not as many severe drawdowns.

As index funds are considered passive strategies, they tend to be low-cost investments. Index funds track a benchmark performance and therefore don’t employ a manager to run the fund, as is the case with “active” strategies.

As a result, the average passive fund charges an annual fee of 0.12%, compared with a 0.60% average fee among active funds, according to data from Morningstar.

Of course, the sooner you start investing the better. The power of compounding will work for you and reward you handsomely.

Wishing you all a wonderful weekend.

Stay healthy and take care.

Cheers,

Jacque

July 5, 2023/by Mad Hedge Fund Trader

July 3, 2023

Jacque's Post

Retire Well by Reading These Books.

July 3, 2023

Hello everyone,

Reading books about money &/or the markets or listening to them via Audible can have a profound effect on your lifestyle & how comfortable you will be in retirement. Provided, of course, you make some changes, and take action.

So, here is a list of books I recommend you pick up and read. Even if you get one small piece of advice from each book, that could be worth its weight in gold.

Enjoy!

1. “The Millionaire Next Door: Surprising Secrets of America’s Wealthy”

By Dr. Thomas Stanley

The late Thomas Stanley collected years of data about millionaire lifestyles. He found that they don’t all inherit their wealth or own mansions. Instead, they live modestly while accumulating their wealth.

This book was originally published in 1996, but the basic money principles can still be applied today.

2. “The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich”

By David Bach

Millionaires don’t spend hours managing their money; they use automated systems that make the wealth-building process easy and repeatable.

From a company-sponsored 401(k) to automatic deposits into a savings account, you’ll learn how to turn your financial life into a well-oiled machine.

3. “Brain Makeover: A Weekly Guide to a Happier, Healthier and More Abundant Life”

By Phyllis Ginsberg

Our brain mainly runs on autopilot, but there are ways to retrain your brain for lasting changes that can help you feel happier in just one week.

The book breaks down the components of happiness and stress, then offers weekly exercises to help you build new neural pathways for a more joyful and purposeful life.

4. “Just Keep Buying: Proven Ways to Save Money and Build Your Wealth”

By Nick Maggiulli

Popular finance blogger Nick Maggiulli dives into the two main principles of building wealth — saving and investing — and crunches numbers to give practical advice for any type of investor in any type of market.

This book is a good reminder that you don’t need to be a math genius or even lucky to get rich in the market.

5. “I Will Teach You To Be Rich: No Guilt. No Excuses. No BS. Just a 6-Week Program That Works”

By Ramit Sethi

The second edition of Ramit Sethi’s popular book “I Will Teach You To Be Rich” challenges traditional finance advice.

For example, many experts recommend brewing your coffee at home to save money, but not Sethi. In fact, he teaches readers to uncover their “rich life” by spending lavishly on things they care about while cutting back on what doesn’t matter.

(I especially liked his script for talking your way out of late fees. That alone could be worth the price of the book.)

6. “Stop Overthinking: 23 Techniques to Relieve Stress, Stop Negative Spirals, Declutter Your Mind, and Focus on the Present”

By Nick Trenton

Overthinking can have devastating effects on your mental health, and this book shows you how to escape your own mental prison.

You’ll learn to identify when you are overthinking and use relaxation techniques. Even those who live a relatively stress-free life could benefit by giving this a read.

7. “The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness”

By Morgan Housel

If paying off your mortgage early makes it easier to sleep at night, it’s a great decision, even though it might not make sense mathematically.

Making good money choices is equal parts math and psychology. Money expert Morgan Housel explores the psychological side of finance in a clever and non-judgmental way.

8. “Your Money or Your Life: 9 Steps to Transforming Your Relationship With Money and Achieving Financial Independence”

By Vicki Robin and Joe Dominguez

This book explores the uncomfortable idea that many of us work ourselves to death. We work 40 hours a week for decades and hope to have 10 quality years of retirement.

The authors flip that script by challenging you to think: How much of my life am I giving up to drive that expensive car or live in the big house on the hill? When is enough enough?

Wishing you all a great week.

Cheers,

Jacque

"We may encounter many defeats, but we must not be defeated." - Maya Angelou

July 3, 2023/by Mad Hedge Fund Trader

Jacquie's Post Trade Alert - (OXY) July 3, 2023 - BUY

Jacque's Post

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

July 3, 2023/by Mad Hedge Fund Trader

June 30, 2023

Jacque's Post

(COULD OIL PRICES DOUBLE FROM HERE?)

June 30, 2023

Hello everyone,

Let’s talk about oil and oil prices and what stocks could be a great buy.

It’s a distinct possibility that oil prices could soar in the next couple of years.

And why is that you ask?

It all comes back to inflation potentially being a sticky problem. It may stay at an elevated rate longer than anticipated.

It seems that there are too many people -who are cashed up – going after fewer goods.
If you are a business now in the U.S. and you want to hire unskilled labour, the price seems to keep rising – about 5-10% every six months.

OPEC, earlier this week, suggested demand would be strong well into the future. The group expects oil demand to hit 110 million barrels a day in about 20 years pushing the world’s energy demand up by 23%.

Bill Smead, who is the CEO of Smead Capital Management expects crude prices to rise to between $150 to $200 a barrel over the next three to five years. That’s an increase of between 100% and $170% from Tuesday’s Brent crude price of around $74 per barrel.

Another portfolio manager, Eric Nuttall of Ninepoint Partners, also sees bullish moves ahead for oil. Nuttall believes we have seen the lows for the year after Saudi Arabia announced voluntary production cuts.

Of course, much will depend on China’s economic performance in the second half of the year, and the ability of the U.S. and Europe to avoid an economic slowdown amid rate hikes.

Even allowing for all of this, research firm Rystad Energy believes upside pressure will materialize soon.

So, how do we as investors capture this move?

Occidental Petroleum would definitely be on my list as it plans to capture and store carbon dioxide. And this carbon capture business could be as big for Occidental Petroleum (OXY) as the cloud business AWS has been for Amazon (AMZN).

And another reason to buy OXY is John mentioned it in his last webinar as a LEAPS candidate.

Daily chart

Weekly chart

Nuttall names Cenovus Energy as another stock that will do well in the long term. He notes that this company has a high free cash flow yield of 12-18%. Furthermore, Nuttall expects Cenovus to hit its last debt target by the year-end, pivoting toward 100% of free cash flow returned to shareholders.

Daily chart