Listen to all 28 speakers opine on the best strategies, tactics, and instruments to use in these volatile markets. It is a true smorgasbord of investment strategies. Find the best one to suit your own goals.
The product discounts offered last week are still valid. Start, stop, and pause the videos at your leisure. Best of all, access to the videos is FREE. Access them all by going to www.madhedge.com, clicking on SEPTEMBER 2022 SUMMIT REPLAYS at the upper right hand corner, and then choosing the speaker of your choice.
We look forward to working with you. The next summit is scheduled for December 6-8, 2022.
https://www.madhedgefundtrader.com/wp-content/uploads/2022/08/sept2022-summit-e1661352182392.png338500Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2022-09-30 11:04:062022-09-30 12:11:38The Mad Hedge September 13-15 Summit Replays are Up
With ten-year US Treasury yields hitting 4.00% yesterday, it’s time to pay the piper for the last 15 years of the borrowing rampage of epic proportions.
This is not a new thing.
We are, in fact, becoming the United States of Debt.
That Washington is taking the lead in this frenzy of borrowing is undeniable. The last administration took the national debt from $23 trillion to $28 trillion during four years of prosperity that was entirely borrowed from the future.
The Biden administration will eventually take that figure up to an eye-popping $38 trillion. That will be the final bill for ending the pandemic, putting 25 million people back to work, and bringing the second Great Depression to a close.
The National Debt exceeded US GDP in 2016, taking the debt to GDP ratio to the highest point since WWII.
Treasury Secretary Janet Yellen recently confided to me that, “It’s the kind of thing that should keep you awake at night.”
It gets worse.
According to the Federal Reserve Bank of New York, total personal debt topped $19 trillion by the end of 2020. An overwhelming share of personal consumption is now funded by credit card borrowing.
Some 33% of Americans now have debts in some form a collection, and that figure reaches an astonishing 50% in many southern states (see map below). Call it the Confederate States of Debt.
Corporations have also been visiting the money trough with increasing frequency, taking their debt to $6.1 trillion, up by 39% in five years, and by 85% in a decade.
The debt to capital ratio of the top 1,000 companies has ballooned from 35% to 54% and is now the highest in 20 years.
Another foreboding indicator is that corporate debt is rising faster than sales, with debt rising by a breakneck 8.5% annualized compared to 4.6% for sales over the past decade.
Automobile debt now tops $1 trillion and with lax standards has become the new subprime market.
And remember that other 800-pound gorilla in the room?
Student debt now exceeds $1.6 trillion and is rising, as is the default rate. Provisions in the last tax bill eliminate the deductibility of the interest on student debt, making lives increasingly miserable for young borrowers. And you wonder why the US birth rate is so low.
Of course, you can blame the low interest rates that have prevailed for the past decade. Who doesn’t want to borrow when the inflation adjusted long-term cost of money is FREE?
That explains why Apple (AAPL), with $270 billion in cash reserves held overseas, borrowed last year via ultra-low coupon 30-year bond issues, even though it doesn’t need the money. Many other major corporations have done the same.
And while everything looks fine on paper now, what happens if interest rates ever rise and stay high?
The Feds will be in dire straight very quickly. Raise short term rates to the 6% seen at the peak of the last cycle, and the nation’s debt service rockets from 4% to over 10% of the total budget. That’s when the sushi really hits the fan.
You can expect the same kind of vicious math to strike across the entire spectrum of heavily leveraged borrowers going forward, including big borrowers like cruise line, airlines, you, and me.
We are also witnessing the withdrawal of the Chinese as major Treasury bond buyers, who along with other sovereign buyers historically took as much as 50% of every issue. Threaten a war on your largest lender and it plays hell with you cash flow.
Rising supply against fewer buyers sounds like a recipe for eventually much higher interest rates to me.
Just watch this space for the next Trade Alert regarding when to get back in for the umpteenth time.
https://www.madhedgefundtrader.com/wp-content/uploads/2018/02/american-debt.jpg285447Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2022-09-29 10:02:592022-09-29 12:12:42The United States of Debt
"A strong dollar is a natural consequence of America emerging from a liquidity trap, while Europe and Japan are still stuck in one. The dollar is a growth stock, and growth stocks over time outperform utilities," said Paul McCulley, formerly the chief economist at bond giant PIMCO.
https://www.madhedgefundtrader.com/wp-content/uploads/2015/03/Animial-Trap-e1427723535856.jpg217300DougDhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngDougD2022-09-29 10:00:422022-09-29 12:12:52Quote of the Day - September 29, 2022
It is likely that the stock market will hit its final low in this bear market in the next month or two. Worst case, the S&P 500 (SPX) could momentarily trade as low as down 10% or 20% from here.
That will make it the best time to enter LEAPS in this decade.
You don’t necessarily have to execute this trade today. Just put in very low bids and on market sell-off days, you might get filled. Start with one contract to discover where the real market is.
Trade Alert - (RIVN) – BUY
BUY the Rivian (RIVN) January 2025 $75-$80 out-of-the-money vertical Bull Call spread LEAPS at $0.50 or best
Opening Trade
9-28-2022
expiration date: January 17, 2025
Number of Contracts = 1 contract
You may not have noticed, but we have just entered the golden age of the electric vehicle, thanks to climate change and massive government support. We are also entering the golden age of LEAPS.
Rivian is the one electrical vehicle maker most likely to make it after Tesla (TSLA). Its largest outside shareholder is Amazon, which helped start the company with an order for 100,000 electric delivery vehicles. Yes, I hate to say it, but Rivian could be the next Tesla and I did pretty good with the last one.
With Rivian, we have a 90% decline in the share price that is right behind us. As the company ramps up production, I believe it is possible for the shares to rise from today’s $40 to the old high at $180. That makes it a perfect LEAPS candidate.
A Rivian passed me on the road the other day and it’s the coolest thing I’ve ever seen. Don’t bother trying to buy one as there is a two-year waiting list, even at $69,000 each stripped down, and I don’t care who you know. Fully loaded they are selling for $89,000 list with a 400-mile range, and $140,000 on the black market.
Volume mass production is the key to the electric vehicle business. Rivian should manufacture 20,000 EVs this year. When Tesla (TSLA) hit 20,000, the stock went up 1,000%. So, 20,000 seems to be the key number.
To learn more about the company, please visit their website at https://rivian.com
I am therefore buying the Rivian (RIVN) January 2025 $75-$80 out-of-the-money vertical Bull Call spread LEAPS at $0.50 or best.
Don’t pay more than $1.20 or you’ll be chasing on a risk/reward basis.
January 2025 is the longest expiration currently listed. If you want to get more aggressive with more leverage, use a pair of strike prices higher up. Please note that these options are illiquid, and it may take some work to get in or out. Start at my price and work your way up until you get done.
Look at the math below and you will see that a 140% rise in (RIVN) shares will generate a 900% profit with this position, such is the wonder of LEAPS.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
This is a bet that Rivian will not fall below $80 by the January 17, 2025 options expiration in 2 years and 4 months.
Here are the specific trades you need to execute this position:
Buy 1 January 2025 (RIVN) $75 calls at………….………$7.50
Sell short 1 January 2025 (RIVN) $80 calls at…………$7.00
Net Cost:………………………….………..………….......….....$0.50
Potential Profit: $5.00 - $0.50 = $4.50
(1 X 100 X $4.50) = $450 or 900% in 2 years and 4 months.
If you are uncertain on how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
Cool!
https://www.madhedgefundtrader.com/wp-content/uploads/2022/09/rivian-truck.jpg315468Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2022-09-28 11:02:262022-09-29 00:31:45BUY the Rivian (RIVN) January 2025 $75-$80 out-of-the-money vertical Bull Call spread LEAPS at $0.50 or best
“Not all men dream equally. Men who dream at night are harmless. Those who dream during the day are dangerous.” said TE Lawrence, otherwise known as Lawrence of Arabia.
https://www.madhedgefundtrader.com/wp-content/uploads/2022/09/te-lawrence.jpg228171Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2022-09-28 11:00:122022-09-29 00:30:08September 28, 2022 - Quote of the Day
First, thank you for your service! I’m in awe of your ongoing incredible accomplishments and service to your country, your zest for life and nature, your sense of humor, your stories, and all while delivering crushing investment returns. Thank you and well done!
As for me, I became a Mad Hedge Fund Trader Global Dispatch Service subscriber November 2020 and “tested” the service by trading your monthly options spread Trade Alerts in an IRA with $25K. New to call and put spreads, my profits for the first month covered my subscription fee. And I’ve managed to execute almost all Trade Alerts within the suggested price range, usually close to or at your price.
Well, I’ll let you do the math. The Global Dispatch Service Trade Alerts delivered a return of 90.01% in 2021, and 60.98% YTD 2022! Are you kidding me? Absolutely not! Test score? A+! All in!
I may have to get up crazy early for the US stock market open at 3:30 a.m. here in Honolulu, but I’m riding waves by 10:30 a.m., done for the day. I’ve just liquidated all my assets, and recently became Trustee of a Family Trust, which also liquidated all assets. I am now investing approximately $2.75 million in cash. I’m nearly 100% cash with John Thomas in my corner just a phone call away. Of course, I’ve begun purchasing LEAPS, and I’m holding a very large amount of this month’s options spreads. And thank you for your unsolicited phone call last Friday! I look forward to our next call, and hope to see you in person soon.
I’m extremely satisfied and secure in knowing that I can maintain a well-diversified and hedged investment portfolio, earning monster returns in both a long-term barbell portfolio, and a short-term deep-in-the-money options spread portfolio, while maintaining highly risk-averse portfolio management.
REALIZING income for the Family Trust each and every month, while maintaining a large average daily cash position, allows me to lock-in outsized returns, AND remain highly risk-averse. I return to 100% cash every single month, and hold a large percentage of cash most of the year. And earnings are not just on paper, they’re actual earnings…in CASH! Not only is the Family Trust realizing large returns, it’s ready to distribute cash in entirety every month, should the need arise, as the majority of funds sit in cash most of the year. I’m ready to accept my award for Trustee of the Year.
Needless to say, I am renewing your Concierge Service. I’ll earn the subscription fee back, and more, during the first month of renewal.
I’m now ready to get to $10 million ASAP, and look forward to speaking with you again, Obi-Wan!
Mahalo John and the MHFT Team!
Sincerely,
Wilson
https://www.madhedgefundtrader.com/wp-content/uploads/2020/07/john-thomas-beach.png305341Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2022-09-27 10:02:582022-09-27 12:01:45Testimonial
Global Market Comments
September 26, 2022 Fiat Lux
Featured Trade:
(MARKET OUTLOOK FOR THE WEEK AHEAD, or HOW TO TRADE THE 4TH QUARTER) (SPY), (TLT), (AAPL), (TSLA), (RIVN)
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png00Mad Hedge Fund Traderhttps://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.pngMad Hedge Fund Trader2022-09-26 11:04:192022-09-26 12:22:36September 26, 2022
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