I am writing this to you from the island of Sardinia, part of Italy, a clump of arid mountains dropped right in the middle of the western Mediterranean.
I am bobbing offshore from Porto Cuervo on the famed Costa Smeralda, or Emerald Coast, in a friend?s 100-foot sailboat, awaiting permission to enter.
The water here is so clear that the boats appear to float on air. This afternoon I swam at La Spiaggia Rosa on Budelli Island, famed as the most perfect beach in Italy.
After making a fortune for his hedge fund clients following my Trade Alerts over the past year, a week?s free use of my friend?s favorite toy was the least he could do. Renting this baby costs $50,000 a week, not including tips for the crew, which I covered.
The harbor is so clogged with the traffic of mega yachts belonging to Russian oligarchs, Arab sheiks and other hedge fund managers, that there is no room for us to dock. The ship belonging to the Crown Prince of Saudi Arabia floats just ahead of us in the queue, a nice little 150 footer. So that?s where all my gas money goes! (Or went, now that I am a Tesla driver).
Despite these distractions, I am happy to report that the industry beating performance of the Mad Hedge Fund Trader?s Trade Alert Service has punched through to a new all time high.
The total return for my followers so far in 2014 has reached 22.9%, compared to a far more arthritic 3% for the Dow Average during the same period. So far in July, followers have earned a welcome 3.14%.
I managed to pull this off during some of the most difficult trading conditions in market history. Turnover across all asset classes is hitting decade lows (see chart below), and volatility has crashed through the floor.
Even on the big down days, the Volatility Index reached no higher than the 12% handle. Most of the rest of the hedge fund industry is getting walloped.
The three and a half year return is now at an amazing 145.3%, compared to a far more modest increase for the Dow Average during the same period of only 37%.
That brings my averaged annualized return up to 40.6%. Not bad in this zero interest rate world. It appears better to reach for capital gains than the paltry 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 of.
Another particularly vexing challenge is that the principal market driver has shifted from economics to geopolitics. The global economic recovery continues, but at a snail?s pace, so it hardly moves the needle on the volatility front.
The carnage in Syria, Iraq, and the Ukraine continues unabated, but nobody seems to care, except for a handful of humanitarian organizations. Not even the potential bankruptcy of a Portuguese bank, the Banco Espiritu Santo, could get the markets to correct for more than an hour. But get a new rumor about Apple?s impending launch of its iPhone 6, and it?s off to the races.
I learned a long time ago to trade the market you have, not the one you wish you had. The world seems to be drowning in complacency.
However, I am using every dip to add risk and every rally to take it back off, keeping positions small all along the way. I am also trading front month options only to minimize my own volatility and pare the hit when a correction finally does come.
It has become yeoman?s work.
So, in the relentless grind up, I took profits on my Caterpillar (CAT) position. My long in Microsoft options (MSFT) is set to expire at its maximum value today. My short position in the S&P 500, the July (SPY) $199 puts, will imminently expire worthless. That?s the way you want to play it; your longs tack on 20% and your shorts go to zero.
I also added a hedging short in the Euro (FXE) and an additional long in Apple (AAPL), of course!
In the meantime, the world is waiting to see whether the US can deliver a second half GDP growth rate of 4% per annum?or not.
Quite a few followers were able to move fast enough to cash in on the move. To read the plaudits yourself, please go to my testimonials page by clicking here. They are all real and new ones come in almost every day.
My esteemed colleague, Mad Day Trader Jim Parker, was no slouch either, dodging in an out of the raindrops to make money on an intra day basis.
What would you expect with a combined 85 years of market experience between the two of us? Followers are laughing all the way to the bank.
Don?t forget that Jim clocked an amazing 2013 with a staggering 374% trading profit. That was just for an eight-month year!
The Opening Bell With Jim Parker, a quickie but insightful webinar giving followers an instant snapshot of the market opening every day, has been an overwhelming success. Many customers have already reported dramatic improvements in their trading results.
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. Now available is the Mad Hedge Fund Trader Channel on YouTube that will enable me to post videos from my frequent travels around the world.
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 2014.
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.
Our flagship product,?Mad Hedge Fund Trader PRO, costs $4,500 a year. It includes my 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 at?www.madhedgefundtrader.com, find the ?Global Trading Dispatch??or ?Mad Hedge Fund Trader PRO??box on the right, and click on the blue??SUBSCRIBE NOW??button.