While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
Global Market Comments
September 27, 2013
Fiat Lux
Featured Trade:
(GOING BACK INTO JAPAN),
(DXJ), ($NIKK), (FXY), (YCS),
(BE CAREFUL, YOUR PC IS WATCHING)
WisdomTree Japan Hedged Equity (DXJ)
Nikkei Index ($NIKK)
CurrencyShares Japanese Yen Trust (FXY)
ProShares UltraShort Yen (YCS)
The smart people I know believe that prime minister Shinzo Abe?s plans to revive the Japanese economy will succeed, paving the way for a decade long bull market that will take the Nikkei Index ($NIKK) up to new highs. The dumb people I know argue vociferously and passionately that Abe will fail miserably, and that the economy and stocks will crash and burn as early as next year.
I think I?ll go with the smart people.
Last night, we learned that Japan?s Government Pension Investment Fund (GPIF) is going to carry out a massive reallocation out of domestic government bonds and into risk assets. The move not only sent Japanese shares flying, it has major implications for US and European markets as well.
The GPIF is the world?s largest pension investor, with a staggering $1.23 trillion in assets. It will boost its allocation to domestic shares from 11% to 12%, unleashing $12 billion in net stock buying. A far more impressive $37 billion has been earmarked for foreign stock markets. This will come at the expense of bonds, which will see their share cut back from 67% to 60%.
The move was triggered by the terrible performance of the Japanese government bond market this year, which has seen prices plunge and yields soar. Since the 2012 lows, the ten-year JGB yield has ratcheted up from an unbelievably low 0.39% to as high as 1.20%, a threefold increase. This dragged down the overall return on investment for the GPIF to the lowest levels in history. Since the demands by Japan?s retirees are expected to skyrocket from here, the fund had little choice but to move out substantially on the risk spectrum.
This is most likely only the opening salvo of the multiyear Great Rotation by the GPIF out of bonds and into stocks globally. The GPIF is not only attracted by the far higher dividend yields and capital gains offered by foreign stocks. A weakening Japanese yen will also juice profits when translated back to the home currency.
In the meantime, it is pedal to the metal for Mr. Shinzo Abe, whose late father, Shintaro, I knew well. He is betting the future of the country on a potent, and unprecedented, mix of fiscal stimulus, monetary easing and deregulation. The Bank of Japan has been leading the charge here, targeting a 2% inflation rate in two years, and promising to double the money supply. My own forecast is that this package will eventually take the Japanese yen down from today?s ?99 to ?150 to the dollar.
If you are an old fart like me you will recognize this approach. President Ronald Reagan employed a similar strategy to get the US economy off the mat in the wake of the 1974 and 1980 oil crisis and the stagflation that followed. This paved the way for a move in the Dow Average from 600 to 15,000. Nope, newbies, that is not typo. It really happened. If nothing else, the Japanese are great students of history, perhaps better than we are.
The other incentive to make a move on the (DXJ) here is that a further move down in the Japanese yen (FXY), (YCS) is imminent. It has been hovering just below ?100 for six months now, and is on the verge of launching into a new leg down. All that has been missing until now has been the trigger for the break. The GPIF move could be it.
I have written endlessly on the fundamental case for a weak yen for the past two years (for a link why you should sell short the yen, please click here http://madhedgefundradio.com/rumblings-in-tokyo-2/, ?and here http://madhedgefundradio.com/new-boj-governor-craters-yen/, and finally one more http://madhedgefundradio.com/new-boj-governor-crushes-the-yen/.
Hey! You there, staring at this monitor. This is your PC talking to you. No, not you over there standing in the background. I?m talking to the guy sitting in front of me poking at my keys. Ouch! That one hurt!
So you thought no one was watching, did you? Let me set you straight. About a month ago you clicked on a certain website, and I installed myself as a cookie on your computer, which is an innocuous little text file that you can?t see. Since then, I have been tracking your every move, recording websites you clicked on, the pages you visited, and the stuff you ordered. I then used this handy little algorithm to build a profile of exactly who you are. I now know you better than your own mother. In fact, I know you better than you know yourself.
For example, I am aware that you make more than $250,000 a year, live in a posh zip code in San Francisco, belong to a fancy country club, and drive a Mercedes. You donate to Republican political causes, send your kids to a prestigious private school, and bill it all to an American Express Platinum Card. Did I leave anything out?
Because I know every detail of your life, down to your inside leg measurement, I am able to harness the power of this machine to more precisely service your every need. That includes directing advertising to you, which you have a high probability of clicking on. The more you click on my ads, the higher prices I can realize for those ads. The ad campaigns you now see are unique to your own personal computer because they are tied to your IP address. My program, called ?behavioral targeting? is the next ?big thing? in online advertising. It?s all part of the brave new world.
I see you have been shopping for a new car. Check out the new Hyundai athttp://www.hyundaiusa.com/, which offers the same quality as your existing ride, at half the price. Your clicks this morning suggest you?re taking your ?significant other? out to dinner tonight. Might I suggest Gary Danko?s on Bay Street athttp://www.garydanko.com/site/bio.html?? The rack of lamb is to die for there.
Your visits to Travelocity and Expedia tell me you?re planning a vacation. I bet you didn?t know you can find incredible deals in Las Vegas athttp://www.visitlasvegas.com/vegas/index.jsp?. Thinking about buying a condo there? They?ll even pay for the trip if you promise to check one out while you?re there.
Since we?re chatting here?mano a mano, I noticed that that last pair of jeans you ordered from?http://us.levi.com/home/index.jsp?had a 42-inch waist, up from the 40?s in your last order. Better lay off those cheeseburgers. Pretty soon, they?ll be calling you ?tubby? or ?fatso?. Better visit?http://www.weightwatchers.com/Index.aspx?soon, or the legs on that chair might buckle out from under you.
Worried about privacy? Privacy, shmivacy. There hasn?t been privacy in this country since the first social security number was handed out in 1936. And don?t expect any relief from Congress. I doubt half those dummies even know how to turn on their own PC?s.
Don?t even think about trying to delete me. I?m a ?flash cookie?, an insidious little piece of code that reinstalls every time you try that. Think of me as a toenail fungus. Once you catch me, I?m almost impossible to get rid of.
I hope you don?t mind, but I?ve been passing your personal details around to some of my buddies at other websites. That?s why when you clicked on?http://www.nfl.com/?you got deluged with product offers from your local team, the San Francisco 49ers. I?ve got friends at Google, Facebook, MySpace, and pretty much everywhere. Can I help it if I?m a popular guy? I bet the view from those 50-yard seats is great, isn?t it?
I noticed that your spending habits don?t exactly match with the income you reported on your last tax return. Do you think the IRS would like to know about that? I bet you didn?t know the agency offers a 10% reward for turning in tax cheats.
How about those triple XXX DVD?s you bought last week? Whoa! Hot, hot, hot! I hope your employer never finds out about those. It might not go down too well at your next performance review.
I thought it was lovely that you bought your spouse a two carat, yellow, vvs1, round cut diamond ring for $26,000 from?http://www.bluenile.com/?for your 30th?wedding anniversary. But who is Lolita, the Argentine firecracker, in Miami Beach? Does the old wifey know you sent her a $2,000 pair of diamond stud earrings? What?s it worth to you for me to keep mum on this? Maybe you should take a quick peak at? 3StepDivorce.com at?http://www.3stepdivorce.com? and see what you?re in for?
Naw, I?m just pulling your leg. This is all just between friends, right? Think of it as a doctor/patient relationship. I?ll tell you what. See that leaderboard ad at the top of the page? Just click on that and we?ll call it even. Oooh that felt good! Click it again. Oh, baby! Not too many times. You?ll trigger my anti click fraud program.
Now you see that wide skyscraper add over on the right? Click on that too. Oh baby! Click it again! And there?s a little button ad at the bottom of the page. No, not that one. A little lower. What was that little cutie?s name in Miami again? Aaaaah.
?The short message from the Fed is that they?re afraid of congress,? said Boris Schlossberg of BK Asset Management.
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. Read more
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
Global Market Comments
September 26, 2013
Fiat Lux
Featured Trade:
(THE GOVERNMENT THAT CRIED WOLF),
(BREAKFAST WITH BOONE PICKENS)
