"The market always gets it right," said Jim O'Neill, the chairman of Goldman Sachs International, who coined the term "BRIC".
Global Market Comments
October 4, 2024
Fiat Lux
Featured Trade:
(JOIN ME ON CUNARDS QUEEN MARY 2 FOR MY JULY 11 TRANSATLANTIC SEMINAR AT SEA LUNCHEON), (EUROPEAN STYLE HOMELAND SECURITY)
The English are feeling the pinch in relation to recent geopolitical events and have therefore raised their security level from "Miffed" to "Peeved."
Soon, though, security levels may be raised yet again to "Irritated" or even "A Bit Cross." The English have not been "A Bit Cross" since the blitz in 1940 when tea supplies nearly ran out.
Terrorists have been re-categorized from "Tiresome" to "A Bloody Nuisance." The last time the British issued a "Bloody Nuisance" warning level was in 1588 when threatened by the Spanish Armada.
The Scots have raised their threat level from "Pissed Off" to "Let's get the
Bastards." They don't have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years.
The French government announced yesterday that it has raised its terror alert
level from "Run" to "Hide." The only two higher levels in France are "Collaborate" and "Surrender." The rise was precipitated by a recent fire that destroyed France's white flag factory, effectively paralyzing the country's military capability.
Italy has increased the alert level from "Shout Loudly and Excitedly" to
"Elaborate Military Posturing." Two more levels remain: "Ineffective Combat Operations" and "Change Sides."
The Germans have increased their alert state from "Disdainful Arrogance" to
"Dress in Uniform and Sing Marching Songs." They also have two higher levels: "Invade a Neighbor" and "Lose."
Belgians, on the other hand, are all on holiday as usual; the only threat they
are worried about is NATO pulling out of Brussels.
The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms, so the new Spanish navy can get a really good look at the old Spanish navy.
Australia, meanwhile, has raised its security level from "No worries" to
"She'll be alright, Mate." Two more escalation levels remain: "Crikey! I think we'll need to cancel the Barbie this weekend!" and "The Barbie is canceled." So far, no situation has ever warranted the use of the final escalation level.
-- John Cleese - British writer, actor, and tall person.
2015 in Marrakesh, Morocco
“Bonds are priced artificially because you’ve got some guy buying tens of billions of dollars’ worth a month. That will change at some point, and when it does, people are going to lose a lot of money,” said the Oracle of Omaha, Warren Buffett.
Global Market Comments
October 3, 2024
Fiat Lux
Featured Trade:
(THE MAD HEDGE SEPTEMBER 17-19 SUMMIT REPLAYS ARE UP),
(HOW TO EXECUTE A MAD HEDGE TRADE ALERT)
From time to time, I receive an email from a subscriber telling me that they are unable to get executions on trade alerts that are as good as the ones I get. There are several possible reasons for this:
1) Markets move, sometimes quite dramatically so.
2) Your Trade Alert email was hung up on your local provider’s server, getting it to you late. This is a function of your local provider’s capital investment and is totally outside our control.
3) The spreads on deep-in-the-money options spreads can be quite wide. This is why I recommend readers place limit orders to work in the middle market. Make the market come to you. Better yet, if I send you a limit order at $9.00, split it up into five pieces and enter them at $9.00, $9.10, $9.20, $9.30, and $9.40. You might get the last one or two done immediately. When the high frequency traders dump their positions at the end of the day you might get filled on everything. If you enter a “Good until Cancelled” order you might get even better prices the next morning if the stock goes your way. This is what I do.
4) Thousands of market makers read Global Trading Dispatch. The second they see one of my Trade Alerts, they adjust their markets accordingly. This is especially true for deep-in-the-money options. A spread can go from totally ignored to a hot item in seconds. I have seen daily volume soar from 10 contracts to 10,000 in the wake of my Trade Alerts.
On the one hand, this is good news, as my Trade Alerts have earned such credibility in the marketplace. It is a problem for readers encountering sharp elbows when attempting executions in competition with market makers.
5) Occasionally, emails just disappear into thin air. This is cutting edge technology, and sometimes it just plain doesn’t work. This is why I strongly recommend that readers sign up for my free Text Alert Service as a back up. Trade Alerts are also always posted on the website as a secondary back up and show up in the daily P&L as a third. So, we have triple redundancy here.
The bottom line on all of this is that the prices quoted in my Trade Alerts are just ballpark ones with the intention of giving traders some directional guidance. You have to exercise your own judgment as to whether the risk/reward is sufficient with the prices you are able to execute yourself. Sometimes it is better to pay up by a few cents rather than miss the big trend. The market rarely gives you second chances.
Good luck and good trading.
John Thomas
Global Market Comments
October 2, 2024
Fiat Lux
Featured Trade:
(FRIDAY OCTOBER 25 SALT LAKE CITY UTAH STRATEGY LUNCHEON)
(TRADING DEVOID OF THE THOUGHT PROCESS),
(SPY), (INDU), (TLT), (USO)
It seems that all anyone has to do is blow their nose these days, and high-frequency trading will amplify the movement, a multiple of what we would have seen in past years. It's like the butterfly flapping its wings in the Amazon.
The exit of institutional money to trading in in-house dark pools, the concentration of trading into single-sector exchange-traded funds (ETFs), and the departure of the traditional individual investor are all exaggerating these moves. It doesn’t help that stock markets are sitting just short of all-time highs.
You could run off and trade something else besides stocks. That’s easier said than done, as virtually all other asset classes have become equally untradeable.
Bonds have gone crazy, rising to mathematically impossible levels. You’re still trying to catch a falling knife in commodities, as the recent action in oil proved, but the Chinese may have just reversed that. Precious metals are at all-time highs. Foreign currencies have gone comatose, with the US dollar rolling over like the Bismarck.
What’s a poor trader to do? Take up the action in collectible Beanie Babies? Rare French postage stamps? Rare vintage Madeira’s?
There are only two ways to deal with a market like this. Turn off the TV, cancel your newswire feeds, quit reading research, and just look at your screens.
Buy the low numbers and sell the high ones.
It is no more complicated than that. Don’t confuse matters with the thought process. The markets are now so illogical you will only muddy the waters.
The other method is to become boring. Just find the cheapest, low-fee index fund you can find, like one of Vanguard’s, buy it, and stuff it under your mattress. I’m pretty confident that it will be up 10% by the end of the year. 90-day T-bills at 4.75% is not a bad second.
That means you will probably beat most hedge managers out there, as you would have done for the past seven consecutive years. Try to earn more than 10% in these choppy markets, and you could end up losing 10% or 100%.
As for me, I am going to stick with trading. At least I’ll be there when it turns easy again, which has to be soon, and I’ll make a hell of a lot more than 10%.
And was never very good at the “boring” thing.
My New Investment Strategy
One of My Rare Madeira's
Global Market Comments
October 1, 2024
Fiat Lux
Featured Trade:
(HOW TO AVOID THE PONZI SCHEME TRAP)
(TESTIMONIAL)
I spent a sad and depressing, but highly instructional evening with Dr. Stephen Greenspan, who had lost most of his personal fortune to Bernie Madoff.
The University of Connecticut psychology professor had poured the bulk of his savings into Sandra Mansky's Tremont feeder fund; receiving convincing trade confirms and rock-solid custody statements from the Bank of New York.
This is a particularly bitter pill for Dr. Greenspan to take, because he is an internationally known authority on Ponzi schemes and published a book entitled Annals of Gullibility-Why We Get Duped and How to Avoid It.
It is a veritable history of scams, starting with Eve's subterfuge to get Adam to eat the apple, to the Trojan horse and the Pied Piper, up to more modern-day cons in religion, politics, science, medicine, and yes, personal investments.
Madoff's genius was that the returns he fabricated were small, averaging only 11% a year, making them more believable. In the 1920's, the original Ponzi promoting a scheme involving international postal money orders promised his Boston area Italian immigrant customers a 50% return every 45 days.
Madoff also feigned exclusivity, often turning potential investors down, leading them to become even more desirous of joining his club.
By now, most Madoff investors have gotten the bulk of their funds back after several highly publicized asset liquidations. But it took eight years to get them.
Once burned, twice forewarned.
Once in prison, Madoff’s wife divorced him; one son died of cancer, and the other committed suicide. Madoff died in prison in 2021.
Suffice it to say, if it’s too good to be true, it isn’t.