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Tag Archive for: (RTN)

Mad Hedge Fund Trader

October 16 Biweekly Strategy Webinar Q&A

Diary, Newsletter

Below please find subscribers’ Q&A for the Mad Hedge Fund Trader October 16 Global Strategy Webinar broadcast from Silicon Valley, CA with my guest and co-host Bill Davis of the Mad Day Trader. Keep those questions coming!

Q: How do you think the S&P 500 (SPX) will behave with the China trade negotiations going on?

A: Nobody really knows; no one has any advantage here and logic or rationality doesn’t seem to apply anymore. It suffices to say it will continue to be up and down, depending on the trade headline of the day. It’s what I call a “close your eyes and trade” market. If it’s down, buy it; if it’s, upsell it.

Q: How long can Trump keep kicking the can down the road?

A: Indefinitely, unless he wants to fold completely. It looks like he was bested in the latest round of negotiations because the Chinese agreed to buy $50 billion worth of food they were going to buy anyway in exchange for a tariff freeze. Of course, you really don’t get a trade deal unless you get a tariff roll back to where they were two years ago.

Q: Did I miss the update on the Citigroup (C) trade?

A: Yes, we came out of Citigroup a week ago for a small profit or a break-even. You should always check our website where we post our trading position sheet every day as a backstop to any trade alerts you’re getting by email. Occasionally emails just go completely missing, swallowed up by the ether. To find it go to www.madhedgefundtrader.com , log in, go to My Account, Global Trading Dispatch, then Current Positions. You can also find my newly updated long-term portfolio here.

Q: How much pain will General Motors (GM) incur from this standoff, and will they ever reach a compromise?

A: Yes, the union somewhat blew it in striking GM when they had incredibly high inventories which the company is desperate to get rid of ahead of a recession. If you wonder where all those great car deals are coming from, that's the reason. All of the car companies want to go into a recession with as little inventory as possible. It's not just GM, it’s everybody with the same problem.

Q: When does the New Daily Position Sheet get posted?

A: About every hour after the close each day. We need time to process our trades, update all the position sheets before getting it posted.

Q: What do you think about Bitcoin?

A: We hate it and don’t want to touch it. It’s unanalyzable, and only the insiders are making money.

Q: Are you predicting a repeat of Fall 2018 going into the end of this year to close at the lows?

A: No, I’m not. A year ago, we were looking at four interest rate increases to come. This year we’re looking at 1 or 2 more interest rate cuts. It’s nowhere near the situation we saw a year ago. The most we’re going to get is a 7% selloff rather than a 20% selloff and if anything, stocks will rise into the yearend then fall.

Q: Why are we trading the Russell 200 (IWM) instead of the ($RUT) Small Cap Index? We pay less commissions to brokers.

A: There's more liquidity in the (IWM). You have to remember that the combined buying power of the trade alert service is about $1 billion. And that’s harder to do with smaller illiquid ETFs like the ($RUT), especially the options.

Q: If this is a “Don’t fight the Fed” rally for investors, where else is there to go but stocks?

A: Nowhere. But it’s happening in the face of an oncoming recession, so it’s not exactly a great investment opportunity, just a trading one. 2009 was a great time not to fight the Fed.

Q: Do you want to buy Facebook (FB) even though there are so many threats of government scrutiny and antitrust breakups?

A: The anti-trust breakups are never going to happen; the government can't even define what Facebook does. There may be more requirements on disclosures, which means nothing because nobody really cares about disclosures—they just click the box and agree to anything. I was actually looking at this as a buy when we had the big selloff at the end of September and instead, I bought four other Tech stocks and (FB) had moved too far when we got around to it. I think there’s upside potential for Facebook, especially if we can move out of this current range.

Q: Would you sell short European banks? It seems like they’re cutting jobs right and left.

A: I always get this question after big market meltdowns. European banks have been underpricing risks for decades and now the chickens are coming home to roost. Some of these things are down 80-90% so it’s too late to sell short. The next financial crisis is going to be in Europe, not here.

Q: Is it time to short Best Buy (BBY) due to the China deal?

A: No, like Macys (M), Best Buy is heavily dependent on imports from China, and the stock has gotten so low it’s hard to short. And the problem for the whole market in general is all the best sectors to short are already destroyed, down 80-90%. There really is nothing left to short, now that all the bad sectors have been going down for nearly two years. There has been a massive bear market in large chunks of the market which no one has really noticed. So, that might be another reason the market is going up—that we’ve run out of things to short.

Q: Do you like Intel (INTC)?

A: Yes, for the long term. Short term it still could face some headwinds from the China negotiations, where they have a huge business.

Q: Would you buy American Airlines (AA) on the return of Boeing 737 MAX to the fleet?

A: Absolutely, yes. The big American buyers of those planes are really suffering from a shortage of planes. A return of the 737 MAX to the assembly line is great news for the entire industry.

Q: Do you like Raytheon (RTN)?

A: No, Trump has been the defense industry’s best friend. If he exits in the picture, defense will get slaughtered—it will be the first on the chopping block under a future democratic administration. And, if you’re doing nothing but retreating from your allies, you don't need weapons anyway.

Q: Will Freeport McMoRan (FCX) benefit from a trade war resolution?

A: Yes, the fact that it isn't moving now is an indication that a trade war resolution has not been reached. (FCX) has huge exposure to traditional metal bashing industries like they still have in China.

Q: Would you go long or short gold (GLD) here?

A: No, I'm waiting for a bigger dip. If you can get in close to the 200-day moving average at $129.50, that would be the sweet spot. Longer term I still like gold and it is a great recession hedge.

Good Luck and Good Trading!

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

 

 

 

 

Yes, I Still Like Gold

https://www.madhedgefundtrader.com/wp-content/uploads/2018/12/John-Thomas.png 418 627 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2019-10-18 04:02:102019-12-09 13:07:53October 16 Biweekly Strategy Webinar Q&A
Mad Hedge Fund Trader

June 14, 2019

Diary, Newsletter, Summary

Global Market Comments
June 14, 2019
Fiat Lux

Featured Trade:

(WEDNESDAY JUNE 26 BRISBANE, AUSTRALIA STRATEGY LUNCHEON)
(MAY 29 BIWEEKLY STRATEGY WEBINAR Q&A),
(TSLA), (BYND), (AMZN), (GOOG), (AAPL), (CRM), (UT), (RTN), (DIS), (TLT), (HAL), (BABA), (BIDU), (SLV), (EEM)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2019-06-14 02:06:172019-06-14 09:17:34June 14, 2019
Mad Hedge Fund Trader

June 12 Biweekly Strategy Webinar Q&A

Diary, Newsletter

Below please find subscribers’ Q&A for the Mad Hedge Fund Trader June 12 Global Strategy Webinar with my guest and co-host Bill Davis of the Mad Day Trader. Keep those questions coming!

Q: Do you think Tesla (TSLA) will survive?

A: Not only do I think it will survive, but it’ll go up 10 times from the current level. That’s why we urged people to buy the stock at $180. Tesla is so far ahead of the competition, it is incredible. They will sell 400,000 cars this year. The number two electric car competitor will sell only 25,000. They have a ten-year head start in the technology and they are increasing that lead every day. Battery costs will drop another 90% over the next decade eventually making these cars incredibly cheap. Increase sales by ten times and double profit margins and eventually, you get to a $1 trillion company.

Q: Beyond Meat (BYND)—the veggie burger stock—just crashed 25% after JP Morgan downgraded the stock. Are you a buyer here?

A: Absolutely not; veggie burgers are not my area of expertise. Although there will be a large long-term market here potentially worth $140 billion, short term, the profits in no way justify the current stock price which exists only for lack of anything else going on in the market. You don’t get rich buying stocks at 37 times company sales.

Q: Are you worried about antitrust fears destroying the Tech stocks?

A: No, it really comes down to a choice: would you rather American or Chinese companies dominate technology? If we break up all our big tech companies, the only large ones left will be Chinese. It’s in the national interest to keep these companies going. If you did break up any of the FANGS, you’d be creating a ton of value. Amazon (AMZN) is probably worth double if it were broken up into four different pieces. Amazon Web Services alone, their cloud business, will probably be worth $1 trillion as a stand-alone company in five years. The same is true with Apple (AAPL) or Google (GOOG). So, that’s not a big threat overhanging the market.

Q: Is it time to buy Salesforce (CRM)?

A: Yes, you want to be picking up any cloud company you can on any kind of sizeable selloff, and although this isn’t a sizeable selloff, Salesforce is the dominant player in cloud plays; you just want to keep buying this all day long. We get back into it every chance we can.

Q: Do you think the proposed merger of United Technologies (UT) and Raytheon (RTN) will lower the business quality of United Tech’s aerospace business?

A: No, these are almost perfectly complementary companies. One is strong in aerospace while the other is weak, and vice versa with defense. You mesh the two together, you get big economies of scale. The resulting layoffs from the merger will show an increase in overall profitability.

Q: I had the Disney (DIS) shares put to me at $114 a share; would you buy these?

A: Disney stock is going to go up ahead of the summer blockbuster season, so the puts are going to expire being worthless. Sell the puts you have and then go short even more to make back your money. Go naked short a small non-leveraged amount Disney $114 puts, and that should bring in a nice return in an otherwise dead market. Make sure you wait for another selloff in the market to do that.

Q: What role does global warming play in your bullish hypothesis for the 2020s?

A: If people start to actually address global warming, it will be hugely positive for the global economy. It would demand the creation of a plethora of industries around the world, such as solar and other alternative energy industries. When I originally made my “Golden Age” forecast years ago, it was based on the demographics, not global warming; but now that you mention it, any kind of increase in government spending is positive for the global economy, even if it’s borrowed. Spending to avert global warming could be the turbocharger.

Q: Why not go long in the United States Treasury Bond Fund (TLT) into the Fed interest rate cuts?

A: I would, but only on a larger pullback. The problem is that at a 2.06% ten-year Treasury yield, three of the next five quarter-point cuts are already priced into the market. Ideally, if you can get down to $126 in the (TLT), that would be a sweet spot. I have a feeling we’re not going to pull back that far—if you can pull back five points from the recent high at $133, that would be a good point at which to be long in the (TLT).

Q: Extreme weather is driving energy demand to its highest peak since 2010...is there a play here in some energy companies that I’m missing?

A: No, if we’re going into recession and there’s a global supply glut of oil, you don’t want to be anywhere near the energy space whatsoever; and the charts we just went through—Halliburton (HAL) and so on—amply demonstrate that fact. The only play here in oil is on the short side. When US production is in the process of ramping up from 5 million (2005) to $12.3 million (now), to 17 million barrels a day (by 2024) you don’t want to have any exposure to the price of oil whatsoever.

Q: What about China’s FANGS—Alibaba (BABA) and Baidu (BIDU). What do you think of them?

A: I wanted to start buying these on extreme selloff days in anticipation of a trade deal that happens sometime next year. You actually did get rallies without a deal in these things showing that they have finally bottomed down. So yes, I want to be a player in the Chinese FANGS in expectation of a trade deal in the future sometime, but not soon.

Q: Silver (SLV) seems weaker than gold. What’s your view on this?

A: Silver is always the high beta play. It usually moves 1.5-2.5 times faster than gold, so not only do you get bigger rallies in silver, you get bigger selloffs also. The industrial case for silver basically disappeared when we went to digital cameras twenty years ago.

Q: Does this extended trade war mean the end for emerging markets (EEM)?

A: Yes, for the time being. Emerging markets are one of the biggest victims of trade wars. They are more dependent on trade than any of the major economies, so as long as we have a trade war that’s getting worse, we want to avoid emerging markets like the plague.

Q: We just got a huge rebound in the market out of dovish Fed comments. Is this delivering the way for a more dovish message for the rest of the year?

A: Yes, the market is discounting five interest rate cuts through next year; so far, the Fed has delivered none of them. If they delayed that cutting strategy at all, even for a month, it could lead to a 10% selloff in the stock market very quickly and that in and of itself will bring more Fed interest rate cuts. So, it is sort of a self-fulfilling prophecy. The bottom line is that we’re looking at an ultra-low interest rate world for the foreseeable future.

Good Luck and Good Trading.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader

 

 

 

 

 

 

https://www.madhedgefundtrader.com/wp-content/uploads/2019/04/john-thomas-6.png 387 291 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2019-06-14 02:02:482019-07-17 10:25:01June 12 Biweekly Strategy Webinar Q&A
Mad Hedge Fund Trader

May 28, 2019

Tech Letter

Mad Hedge Technology Letter
May 28, 2019
Fiat Lux

Featured Trade:

(CHINA’S RARE EARTH WEAPON)
(TSLA), (AAPL), (LMT), (BAESY), (RTN)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2019-05-28 03:04:592019-07-11 13:02:11May 28, 2019
Mad Hedge Fund Trader

China's Rare Earth Weapon

Tech Letter

There are many ways to describe the trade war the U.S. administration finds itself in.

Many experts have chimed in too categorizing it as a fight for technological supremacy.

There are many different ways to skin a cat.

I’ll tell you what is really going on.

Above all else, this logjam has more to do with a battle for resources, and more specifically, rare earth elements that power the devices, cars, and gadgets that many westerners have become accustomed to.

Let’s make no bones about it, Beijing has cornered the rare earth’s market spanning from assets in the Congo and the cobalt that is produced there to supply on their own turf forcing the U.S. to be reliant on China for about 85% of its rare earth supply.

In other words, the rare earth industry in China is a large industry that is important to Chinese internal economics.

Rare earths are a group of elements on the periodic table with similar properties.

The elements are also critical to national governments because they are used in the defense industry for top-secret weaponry.

Permanent magnets can be used for several applications including serving as essential components of weapon systems and high-performance aircraft such as drones.

China has touted their own state-owned companies to reach deep into this market and make it their own.

The results are visible to the entire world and China gaining a stranglehold on these valuable inputs will have lasting consequences.

Rare earth metals are made up of 17 elements — lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium, scandium, and yttrium.

U.S. companies will need to start developing new supply channels in other markets and Australia could allow U.S. companies' lifelines in securing the orders they need to function as a company.

Military companies important to national security devour these types of precious metals and Raytheon Co (RTN), Lockheed Martin Corp (LMT) and BAE Systems (BAESY) all produce sophisticated missiles with these elements powering their guidance systems, and sensors.

These traded companies’ shares could be in for short-term turbulence if China decides to pull the rug out from underneath banning Chinese companies doing business with American companies, or by slapping on tariffs to respond to the tariffs on Chinese imports.

California's Mountain Pass mine is the sole US rare earth facility with a caveat.

The owner of the mine ships over 50,000 tons of rare earth concentrate for processing in China, meaning that it will be harder than first thought to strip China out of the process.

China and America are in the first stages of a massive decoupling.

Not only smartphone operating systems will be affected with Huawei announcing it will roll out its own in-house operating system after Google announced that they will pull its apps and use of the Android system off of Huawei’s phone, but almost anything of significant value from an Ivy league computer engineering degree to electric cars will be retrenched on each side.

This is terrible news for Tesla (TSLA), and they could be hit next by the Chinese communist party if they deem electric cars integral to national security because of the data and sensors that deliver precious information back to Silicon Valley.

Tesla is in the midst of building a Gigafactory in Shanghai and their growth strategy is solely focused on China.

China standing up to the U.S. is a blunt force way of saying that nobody will dictate to the Chinese their future prospects except themselves.

They feel after 35 years of economic super growth, they should be granted with the options of choosing their destiny.

Huawei will feel the repercussions of these detrimental policies with their European business a big question going forward.

Germany was always a large bullseye for the Chinese government and scooping up robotic centerpiece Kuka, was a smash and grab in broad daylight.

The sleeping giant of Germany has woken up and is on the offensive after allowing the Chinese unfettered access for a generation.

Risks are high in Germany and they could be the first industrial power to be gutted and left behind the woodshed by China Inc and the CCP.

The U.S. faces a conundrum in that the method in which aided China’s rise of forced technology transfers and IP theft can only be stopped if actively removed, meaning we are headed for a game of chicken with the other side hoping the other side blinks first.

The market fallout will be deep and wide-ranging with the most movement in technology companies that are leveraged to China meaning chip companies.

But then there are the tech companies who have deeply embedded interests in China such as Apple (AAPL) whose supply chain is in the eye of the storm with Foxconn.

The worst possible case is China banning the sales of precious earth metals to the U.S. forcing the U.S. to buy from a 3rd party country which in turn would increase costs of American products.

This is what I would categorize as a hard landing and absolute decoupling.

The common denominator of this trade war is higher costs for the American consumer and mass layoffs in China – this is my base case.

However, I would argue that a rare earth's ban would not be as bad as initially thought because many consumers are tapped out with phones, tablets, and computers.

The elongated refresh cycle will not mean consumers will go without access to the internet and its services.  

In terms of the stock market, this puts a wet towel on the positive momentum of early spring when the Nasdaq roared higher.

The Nasdaq could be stuck under 8,000 for the summer unless a rapprochement takes place which I would put at 30% for a structural détente and 65% for a kick the can down the road détente.  

The ironic unintended consequence is the safe haven trade of buying treasuries has come back in vogue and could be a huge boon for the domestic real estate market.

This extends the bull market in properties at least another six months with lower rates allowing fresh buyers to take advantage of lower financing opportunities amid a bump in inventory.

The bull market absolutely needs the real estate market on-sides to perpetuate because of the fragile nature of this part of the late economic cycle.

I also believe that U.S. President Donald Trump will become even more brazen as stronger economic data stateside suggests he could pile on even more pressure on the Chinese communist party to coerce them into a big win that will aid him in his reelection efforts.

Let’s not forget that much of this has to do with the 2020 road back to the White House.

As it stands, corporate America has finally understood the message of moving their supply chain out of China which means mass layoffs for many Chinese particularly in the southern region around Guangzhou.

This is not a marketing charade, this trade war has teeth.

China’s Central Bank will be forced into dovish policy to help state-owned companies who many are akin to zombie companies and another relic of communism that has yet to be uprooted.

All this means debt, debt, and more debt piling up on the mainland and on American shores.

If you thought this was the time of austerity, then you are truly wrong.

The end game could be a Chinese yuan that drops like a heavy stone through the psychological threshold of $7 and on its way down to $7.50.

If this comes to pass, expect a 10% correction and a demonstrably strong U.S. dollar, Japanese yen, Swiss Franc, and a generational entry points into the equity market.

 

 

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2019-05-28 03:02:092019-07-11 13:02:17China's Rare Earth Weapon
MHFTF

November 7, 2018

Diary, Newsletter, Summary

Global Market Comments
November 7, 2018
Fiat Lux

SPECIAL ELECTION ISSUE

Featured Trade:
(THROWING RED MEAT TO MY BASE)
(RTN), (LMT), (NOC), (HON), (XOM), (CVX), (DVN)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 MHFTF https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png MHFTF2018-11-07 10:51:482018-11-07 10:50:15November 7, 2018
MHFTF

Throwing Red Meat to My Base

Diary, Newsletter

It turned out to be a category two blue wave, not the Category four or five one Democrats had hoped for.

The Democrats picked up 28 seats in the House of Representatives but lost two in the Senate.

The one-liner here is that the most generous corporate tax cuts in US history are frozen in place for two more years. That is good for the economy and good for stocks.

You have to laugh at some of the stories that started filing in on Tuesday. In Brooklyn, NY election, officials called the fire department to break down the door of the polling place because they had the wrong keys. Polls everywhere ran out of ballots, while others suffered voting machine breakdowns.

Not so here in Nevada where everything ran flawlessly. My smiling face was safely stored in the Washoe County voter database and a backup paper ballot was created for good measure. No Russians here! Nevada now has two Democratic Senators for the first time in history.

Fortunately, I am old enough to have taken a civics class in high school which has not been taught in public schools for decades. A year working in the White House Press Corps (during the Reagan era) gives me additional perspective.

It shows. According to a recent survey, only 27% of Americans can identify all three branches of the federal government (executive, legislative, and the judicial).

The responsibility, therefore, falls to me to explain the outcome of yesterday’s midterm election and the trading and investment implications therein.

With the Democrats winning the House of Representatives and the Republicans controlling the Senate, we are about to enter the golden age of gridlock.

It is now impossible for any new law to be passed at the federal level. The only way it could is if they agreed on something, but so far, the two parties have shown little propensity to do so. They might as well be chalk and cheese.

Even if they did jointly pass a bill, it could still be vetoed by president Trump. Can you really see Donald Trump signing a bill sponsored by Nancy Pelosi? Given his preference for disruption, I would say there is a little chance of that happening.

The Democrats now have a crucial power and that is complete control of the purse strings. If Trump wants to spend anything at all, it can only be with Democratic approval.

It is highly unlikely that the Democrats will not approve ANY expansion of the debt ceiling, given the enormous increases in government spending Trump has inspired.

You can certainly expect the growth of defense spending to slow, if not stop completely, so avoid these stocks like the plague, like Raytheon (RTN), Lockheed Martin (LMT), Northrop Grumman (NOC), and Honeywell (HON).

This perfectly sets up a number of government shutdowns in the coming two years. Each one of these will bring a 10% stock market correction, but probably not much more. This was the case when Republicans shut down the government under President Obama sometime for weeks.

Control of the Senate isn’t really all that important. Once one branch of government is gone, the legislative calendar grinds to a halt. It does retain for the president the right to appoint judges. But that really involves social issues, not market ones, and will have no market impact. I can’t think of any big business issues coming up before the Supreme Court.

You can count on the House to resurrect the investigation of Russian influence in the 2016 election which was put to sleep with no findings by the Republicans nearly a year ago. On the first day in office, the new Democratic majority will subpoena Donald Trump’s tax returns. Long in hiding like the Loch Ness monster and bigfoot, they will finally see the light of day.

An impeachment motion against Trump will almost certainly pass the House but it won’t be anything more than a symbolic gesture. Without a two-thirds vote in the Senate, it will go nowhere. I doubt it will even come up for a vote.

The House can also use the Congressional Review Act to roll back any Trump administration rule it doesn’t like, which is pretty much all of them. Just last week, Trump said he could overturn a constitutional amendment with an executive order.

Expect the courts to get clogged with litigation on everything. Oil companies will be the big victims here. Avoid Exxon (XOM), Chevron (CVX), and Devon Energy (DVN). Their free pass on environmental regulation is about to end.

And while the tax cuts have been frozen on place, so is the steep upward trajectory of the growth of government debt. Borrowing is expected to top $1.4 trillion next year, levels not seen since the Great Recession. That means the Golden Age of short selling in the bond market, now 2 ½-year-old, has many more years to run. Keep selling the United States Treasury Bond Fund (TLT) on rallies and buy the (TBT) on dips.

The figures belie the massive leftwing swing that has taken place in the nation. West Virginia went for Trump by 43 points in 2016 but just reelected a Democratic Senator, Joe Manchin. In Colorado, they elected the first openly gay governor. The Republicans only won the Senate in Arizona because the Green Party split the vote, taking 2.2%.

Where Republicans did win, it was only by razor-thin margins, seeing 2016 leads disappear from double digits to tenths of a percent across the country, as we saw in Florida and Texas. That sets up and interesting 2020 where demographic change alone should be enough to tip the balance leftward. Oh, and we will be in recession by then too.

Fortunately, you will be rewarded for your long suffering during the campaign which saw an unwelcome 46% increase in negative advertising. Markets have delivered an average 8.5% return in every fourth quarter since 1980 and are up 89% of the time. Since WWII, every midterm election has generated an eye-popping 14.5% average return in the following 12 months.

And now for the bad news: the 2020 presidential campaign starts tomorrow, and we won’t know who the Democratic candidate is until TWO MONTHS BEFORE THE ELECTION!

 

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 MHFTF https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png MHFTF2018-11-07 10:50:522018-11-07 10:49:36Throwing Red Meat to My Base
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