The League of Extraordinary Traders
I never cease to be impressed with the readers of this newsletter.
I was reminded of this once again in Portland, Ore, a few months ago.
Readers seem to fall into three categories.
1) Entrepreneurs whose businesses become so successful that they are throwing off plenty of excess cash to invest. This leads them to an online search (they are also technically very savvy) that brought them to my newsletter.
One of my Portland guests runs a manufacturing business that builds drones. In five years his gross revenues have rocketed from $400,000 a year to $40 million, and he says the best has yet to come.
Two years ago, the Federal Aviation Administration predicted that there would be 1,500 drones in the air by 2020. Today, there are 220,000.
Interestingly, he says he is now besieged by constant foreign takeover offers. These are from European and Asian firms that have gone ex growth and are desperately searching for new profit streams at any cost. So far, he has rebuffed all comers.
2) Financial advisors who have been following my long-term macro and trading advice and who have also become very successful. Winning financial advisors always have new clients and cash coming, which they need to know how to invest.
3) Young men and women in 20s and 30s who dropped out of the mainstream economy and taught themselves to become professional full-time traders.
Perhaps several hundred earn a full-time living just off of my own Trade Alerts. This business has taken a quantum leap with my introduction of the Mad Hedge Technology Letter.
My first-hand observations of the economy in no way indicate that it is in no way performing at a suboptimal 2.5% GDP growth rate.
Airplanes going anywhere are all full. The airports are packed. The cost of overnight parking in San Francisco has risen by 100%. The free electric charging stations, of which there are now 50, are always full.
My favorite Pendleton store in Portland no longer has sales. It’s full price for everything everywhere now. People have plenty of money to spend.
Stores are stocking more expensive, higher margin profits and offering imaginative displays.
Placing your goods on worn-out industrial heavy machines is a popular approach in Portland. I spend more time analyzing the machines than the goods for sale.
The irony is rich.
Restaurants are more expensive, too, always are full, and are also making the grab for higher margins. They now offer food that is gluten free, locally gown and “artisanal.”
When I ordered a steak I was informed that it was hormone- and preservative-free. I asked if I could have one WITH hormones and preservatives, as they put hair on my chest and preserve me as well.
No wonder everyone thinks I’m weird.
Of course, the ultimate expression of this strategy can be found in Portland’s burgeoning marijuana industry.
Huge billboards along the freeways offer “organic” pot by the kilo. It seems they, too, are seeking that 30% markup that Whole Foods and Costco (COST) reap from organic groceries.
Yet there is evidence also of the failed America, the people got left behind. At one stoplight I encountered a family of four holding a big sign in the pouring rain pleading, “We need money.”
They had recently been evicted from their home. All had serious health problems and were morbidly obese. They looked legit. Maybe it was a health care induced bankruptcy?
I asked no questions, made no judgments, and gave them $20. They reacted like they had won the lottery.
The country clearly is not perfect.
