?The Fed is not worried about inflation in the next few years and want growth first, growth second, and growth third. With the stabilization of Europe, the apparent pick up in China, and a US economy still on a reasonable footing, the Fed?s heavy leaning to a growth policy should lead to a pretty favorable environment for the markets,? said legendary hedge fund manager, David Tepper, of Appaloosa Management.
The Trade Alert service of the Mad Hedge Fund Trader has posted a year-to-date gain of 43.24%, a new all time high. Performance since inception 33 months ago soared to 98.29%. This pegs the average annualized return at 35.7%, putting me in the absolute top tier of all hedge fund managers.
These numbers come off the back of a blistering September month to date of up +5.66%. Some 72% of all Trade Alerts since the beginning have been profitable. Carving out the closed 2013 trades alone, 42 out of 51 have made money, a success rate of 82%. In addition, we are carrying six open trades, which are profitable. It is a track record that most big hedge funds would kill for.
This performance was only made possible by correctly calling the near term direction of stocks, bonds, foreign currencies, energy, precious metals and the agricultural products. This may sound easy, until you try it. Some retirement!
My big win this month has been my major short position in the Japanese yen (FXY), (YCS), which is probing new lows against the dollar as we speak. The Japan win on hosting the 2020 Olympics gave the beleaguered Japanese currency some extra downside momentum. The yen has already collapsed in the crosses, and a further major breakdown against the dollar is imminent.
We really coined it on a short position in the Euro (FXE), coming out near the bottom. A new position in copper producer, Freeport McMoRan (FCX), become immediately profitable, jumping some 5% after the Trade Alert went out. I jumped at the $60 selloff in Apple shares in the wake of their latest product launch, instantly, moving into the green with this holding as well. The same is true for my long in the Australian dollar (FXA).
Only my oil short left me with a hickey, which I stopped out of, thanks to the Syria gas attack. Still, if I had held it for only two more hours it would have made money when the Russian peace initiative for Syria was announced. Risk control is paramount if you want to swing for the fences. Welcome to show business.
The coming autumn promises to deliver a harvest of new trading opportunities. On the menu are the taper, a new Fed governor, a debt ceiling crisis, a possible war with Syria, and the death of the bull market in bonds. The Trade Alerts should be coming hot and heavy.
Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011 and 14.87% in 2012. The service includes my Trade Alert Service and my daily newsletter, the Diary of a Mad Hedge Fund Trader. You also get a real-time trading portfolio, an enormous trading idea database, and live biweekly strategy webinars, Global Trading Dispatch PRO adds Jim Parker?s Mad Day Trader service to the mix.
To subscribe, please go to my website: ?www.madhedgefundtrader.com, find the ?Global Trading Dispatch? box on the right, and click on the lime green ?SUBSCRIBE NOW? button.
Some Retirement!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.
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 24, 2013
Fiat Lux
Featured Trade:
(APPLE?S BLOWOUT NUMBERS SEND BEARS SCAMPERING),
(AAPL), (QCOM), (CHL), (SSNLF), (MSFT), (GOOG),
(EXPIRATION OF MY YEN BEAR PUT SPREAD),
(MY PERSONAL LEADING ECONOMIC INDICATOR),
(NOTICE TO MILITARY SUBSCRIBERS)
Apple Inc. (AAPL)
QUALCOMM Incorporated (QCOM)
China Mobile Limited (CHL)
Samsung Electronics Co. Ltd. (SSNLF)
Microsoft Corporation (MSFT)
Google Inc. (GOOG)
Apple?s (AAPL) report this morning that it sold a stunning 9 million model 5s and 5c iPhones has bowled over even the company?s most optimistic cheerleaders and sent the bears running. The consensus estimate had been only for 5 million units. At the opening highs, shares were up $30 to $497, well above the $468 that prevailed at my September 11 Trade Alert to buy the calls.
The blowout success emboldened Apple to substantially raise its Q4 guidance. Forecast revenues were quickly taken up from $34 to $37 billion, while margins edged up from 36% to 37%.
Analysts complained that the company muddled the numbers by simultaneously launching two new phones and retiring one. Certainly that generated some Apples to orange comparisons (no pun intended!). But the bottom line here is that this was a spectacular launch.
There are a number of reasons why both the analyst community and Wall Street got this so wrong. For an incremental upgrade, so many improvements were unleashed at once that it took some time to digest them all.
The iOS 7 64 bit operating system on the new A7 chip, the first ever for a smart phone, substantially boosted speeds, up to ten times for some functions for long suffering iPhone 4 owners. The iSight camera makes a generational leap to a very fast 8 megapixels. Other improvements came through for hundreds of other applications, which I am still trying to figure out. It?s like having to learn how to use an iPhone all over again, so save your upgrade for a free weekend.
Entire new business lines were introduced with barely any notice, like the free Internet radio service, which saw an amazing 11 million unique listeners sign up during the first few days. The agreement with Japan?s NTT Docomo to offer iPhones was hugely overlooked. With 60 million high earning customers, it makes the China Mobile (CHL) now show almost an irrelevance. Even without a (CHL) deal, consumers can now simply buy a 5c for $475 and connect to the domestic network for the first time.
Apple is still the fastest smart phone by miles, according to the chart below, beating the pants off of Google?s Android (GOOG), the Samsung Galaxy (SSNLF), and the Windows smart phone (MSFT). This is a crucial element in the company maintaining its premium pricing. Consumers don?t want to start collecting Social Security by the time their next page loads. If you are a fast typist, unlike me, you can hit the keys faster than the other operating systems? ability to process the commands, muddling the text.
It didn?t hurt that a staggering 200 million customers downloaded the new iOS 7 since last week, reminding us once again of the firm?s dominance in this space. Now we learn that several car manufacturers are going to build in iOS 7 into new models coming out next year. Apple is muscling into huge markets that no one else is even thinking about now. That?s another potential 30 million unit a year business.
I think we are 5 months into a 17 month leg up in Apple stock since it bottomed on April 21 at $380. In the wake of the 5s and 5c launch, we will probably trade in a range from $460 to $525. We will then break out to the upside in the new year, spurred on by another raft of new product launches for the iPad and iMac that could take us as high as $600.
A second period of digestion will follow. Then the prospect of an iPhone 6 launch in September 2014 should return us to the old high of $707. That gives you a potential gain in the stock from this level of 44%.
The company is putting its money where its mouth is. During a long, tedious summer, when its shares were trading in the low $400?s, it was the major buyer. The bulk of its $50 billion war chest is still in place to buy the dips.
I never believed the ultra bears, who seemed to berate the firm for its successes as much as its failure (iMaps, etc.). Downside targets have gone as low at $250 a share.
I have never been one to hold back from throwing rocks at the establishment. But this is a company that is making net profits of $14 million an hour, and they want to sell it short? If they were based in California, I?d say they were smoking something. Oops, they are based in California.
Add this one to the ?WIN? column.
I strapped on this position because I believed that the world was adding risk, expecting major bull moves, once it becomes clear that the multiple disasters now threatening the world don?t actually happen. The list includes war with Syria, the taper, the Bernanke replacement, the debt ceiling crisis, another sequester, yada, yada, yada.? A yen short is one of many ways to achieve this.
This is why US stocks refuse to sell off in any meaningful way. We are setting up for a great ?buy the rumor, sell the news? event. Remember when the first Gulf War started in 1991? Stocks drifted for six months in the run up, then soared once the bombs actually fell. We could be in for another one of those. That would take the yen and the euro to new lows for 2013.
Count on President Obama to draw out the Syria crisis for as long as possible. This gives the message of the coming military action the greatest political impact internationally. It also boosts his own political fortunes at home, leaving the Republicans drifting in the wind. Why be in a hurry to end it? They are now in the uncomfortable position of having to turn pacifist, after supporting Middle Eastern wars with a blank check for the last 11 years.
All of this worked out exactly as expected for our yen short, which is why it expired on Friday at its maximum value. The expiration print of $98.35 cleared our nearest strike of $103 by miles. This added a welcome $1,330 in profits to our $100,000 model trading portfolio for 2013.
On to the next one.
Kaching!
