Jake, I read the Leeb letter you sent me. Looks like it was from year end 2006. I will be happy to share my newsletters with you if you can send me this one whenever it comes out. Even though I don’t care for the style of his advertising bulletin that you sent me, I like his thinking (most of these newsletters use an over-the-top style to get people’s attention). You have sent me other of his newsletters that are written more subtly and I agree with his positions. I would be very interested to receive his alerts.
Leeb does have a good track record and he did make some good observations on the direction of the global economy. The growing power of Asia (China and India) is fairly well known and I have been positioned for that for several years, though have been afraid of the big China runup recently. Looks like a stock market bubble to me. I just have a very little exposure to China with FXI and to India with IFN. Both will probably get hit hard if there is a global correction, which I think has already started. I will move more into those two funds after we go through this bear market. The place of India and China as the top two economies on the planet is just a function of their populations. India has not yet had the will to push its infrastructure along to keep pace with China, but I am sure it will do so in the next few years. Engineering companies like JEC and FLR are a good way to play infrastructure, though overpriced right now.
I see where you may be getting the signals to go all cash. It looks like Leeb has a timing service to recommend that. It will be interesting to see how that turns out. All investment books I have read say that timing doesn’t work, but that modifying allocations to a more conservative posture has a good track record.
Investech is a newsletter written by Jim Stack and is more conservative than Prudent Speculator to which I also subscribe. Check out his “Housing Indicator”. It is amazingly like the internet stock bubble (well not really amazing since EVERY bubble looks like that which is how it gets that name). I also subscribe to Fred Hickey’s High Tech Strategist. He is also VERY bearish, especially on tech and retail stocks, and has been for several years (much too early). He and Doug Kass, another big bear, reference each other’s work all the time in their letters.
Jim Stack is making the same calls as Stephen Leeb, although he is still invested in his fund, but defensively. Stack’s negative calls are based on more traditional investment indicators including stock fund flows and the new “housing indicator”. I have not been as aggressively bearish as Stack, but probably should have (and have changed my thinking). Now I am trying to get my portfolio in line with his allocations, which include a 10% bear fund exposure (I am only at 5% bearish right now). Prudent Bear (BEARX) is how I am doing it, since it outperforms the inverse market index funds like Proshares inverse S&P; (SH). BEARX has a lot of precious metal and mineral exposure in addition to shorts on the weaker stocks. As you know, I like the protection of the precison metals, even at the already high prices.
I have more work to do to get my portfolio squared away. I will need to take some big hits on those financial stocks I picked up too early and allocate the proceeds to BEARX. I can probably keep my portfolio positive for the year if I get that done before any more damage. Too bad I didn’t take the more aggressive approach along with Stack. I was up 20% for the year on my overall portfolio at the end of June.
I have also attached David Tice’s most recent letter to shareholders of BEARX. It was probably written at the end of October, but is dated November 2007. Everything he warned about the financial stocks has come to pass in November (though, it had already started at the end of July). We made a double top in the broad market with the 14,000 peak in July and then again in mid-October. Double tops that break down like this one has (fast), can signal a long term (secular) high in the market. That is why I am thinking 12,000 is likely soon, if not lower. Tice is the most credible bear that I read, though Kass also has been accurate.
I don’t really buy into Leeb’s total gloom and doom for the American market. The inflation story at 12-15% would be no worse than the 1970s (as he himself referenced). We have had the repeat of “guns and butter” in the past 5 years and have deep financial deficits, both public (government) and private (hedge funds, banks, many underwater homeowners), which is why a period of high inflation may be on our doorstep. People did not go broke in the market during the 70s, though it was tough to break even on a “real return” basis, after inflation was netted out. The way to do well in the market in the 70s was the same as now: stay invested in hard assets. Bonds and financial stocks are deadly. We have been agreeing on this strategy, but we should not bail out on the “hard asset” investments right now.
I am staying in the Canroys because I believe as Leeb does, that oil will get more and more precious, and the US dollar will continue to weaken (it won’t crash becaue our trading partners / creditors can’t afford it to). The Canroys are one of the best ways to take advantage of those trends. I will take the tax uncertainties in Canada over the political uncertainties over the other big sources of global oil (Mideast, Africa) or the high cost of deep sea oil. When you buy the big oil companies like MRO, CVX, XOM or BP, you don’t know how global politics might affect their ability to pump oil. They may have their assets nationalized (like in Venezuela and Russia) or the royalties jacked up (even higher than Alberta). I am staying in gold (through BEARX and other funds) because I think gold is a store of wealth while the currency situation gets sorted out. I don’t trust any of the paper currencies. If there is global inflation, as Leeb su ggests, then all world currencies will devalue in relation to gold (or oil for that matter).
I don’t know about this end of the American economy story-line in his 2006 letter. Like I wrote a couple days ago, China and other big American creditor nations need us as much as we need them. They can’t walk away from buying Treasuries or some other American assets. They want to and need to export their consumer products to us in order to employ their huge urbanizing populations. When they export product, they get back dollars in return. They have to put those dollars to work, so they buy our Treasuries or some other financial instrument (including the CDOs and other junky stuff they now own). The other option, which I think will happen and which will eventually support our stock market, is they can recycle their dollars by buying American companies. The oil sheiks have been quietly doing this for years. The only time we hear about it is when they try to buy something that has some possible national security implications, like Dubai trying to buy our ports and China trying to buy Unocal. Then, our Congress shoots them down (unfotunately, in my opinion).
I like the idea of having every creditor country recycling dollars by buying our companies. It props up the stock market and stabilizes the global economy, and global politics by extension. For example, Germany and Japan were at war with us in the 1940s, but now are our best friends. Why? Because they own a big chunk of America (we helped make them powerhouse exporters in the 50s by rebuilding their economies with the best new manufacturing plants and then let them export their cheap products to us without tariffs or duties). When foreign companies own our companies, they send their citizens to live here and help manage their investment (I now work for a German company and just left a company that was sold to the Japanese, so have first hand experience with this).
America has the chance to be a literal United Nations
(much better than the fake figurative one in New York). So, I want the Saudis, Chinese, Russians and Iranians for that matter, to take a big stake in America. That is the future I see, not America as some long-forgotten, has-been nation, as perhaps Leeb sees it.
Access important experiences for managed forex trading – welcome to your own knowledge base.
Exchange Traded Funds (ETFs) are a great tool for the retail traders. ETFs enable you to trade a variety of markets and sectors individually or with options. ETFs are a recent financial innovation that has become highly popular with the investing public.Learn candlestick charting and know these candlestick patterns.
An Exchange Traded Fund (ETF) is a security that is made up of different component stocks, bonds, currencies or commodities and is typically designed to track a particular index or segment of the market.Learn forex trading.
ETFs enable you to reduce risk by offering unleveraged access to certain asset classes and implementing strategies previously only available to large investors. ETFs can also reduce volatility. As ETFs track a group of securities, ETFs volatility is less than that of its component stocks, bonds, currencies or commodities.
If you are looking for a segment of the market to invest or trade, there is a good chance that an ETF will be available that will fit your requirements. There has been an explosive growth in ETFs. So don’t hesitate seeking an ETF for a market you wish to trade. ETFs are similar to a mutual fund. ETFs trade like a stock which means you don’t have to wait till the end of the day to exit a position.
Many ETFs are passively managed and are based on a specific index like the S&P 500 index. Some recent ETFs are actively managed. So you should always check the ETF prospectus to check which index it tracks.
ETFs trade on major US stock exchanges. Buying and selling ETFs is like buying and selling stocks. ETFs popularity has also given rise to the availability of research and scanning tools for ETFs on broker’s websites.
The good thing is that you can use ETF options to reduce risk further since the initial investment is reduced. Since most of the ETFs track some index, you may ask what the difference between index options and ETF options is. The two products differ in three important ways:
1) Index options are cash settled while the ETF options are settled using the underlying security. 2) ETF options have an underlying security that you can own; they lend themselves to combination strategies. 3) Index options can be European Style or American Style while ETF options can only be American Style.
If you have traded stock options than ETF options are pretty natural next step for you. However, as with stocks not all ETFs have options available for trading. When combining ETFs with ETF options, you have access to an index based security that you can protect as well as reduce its cost.
You must again note that not all ETFs have options contract available for trading. If ETF options are available check how liquid the fund and the options contract are.
You can use the protective put, covered call or collared positions to manage risk with ETF options.
Over the last several months, I had the fantastic experience of receiving free Forex training from various companies over the last couple of years, and I found it is a great way to get your skills tuned up before stepping out with your first Forex market trade position as you prepare to perform your first Forex Market Trade decision.
While scores of companies offer this sort of service with you opening a basic account with them, many of them will just offer it as a out-and-out freebie without you having to do anything additional than fill out a registration form on their website.
Of all the free Forex training that I was exposed to, the unsurpassed one to date offered not only the free training, but they offered instruction in the area of their artificial intelligence Forex market trade program. I found it awfully intriguing and after running the Free Demo Account to test their system I completely blown away!
Without question,I was awestruck! I was truly amazed, it was like I was hypnotized by this whole artificial intelligence thing that is also known as AI, because the accuracy was too superior to actually believe, but it all proved to absolutely correct.
Accuracy of 100% for days, weeks and months at a time! I saw it and I am at this point experiencing it! I guess, I just got inquisitive about the aspect of actually utilizing artificial intelligence to manage my trading management.
Soon after looking at all the facts, I concluded that the artificial intelligence Forex market trade program could operate so much more efficiently than me and make a whole lot more money than I ever could because it is working 5 ½ days per week endlessly, without having to take the normal coffee breaks, bathroom runs, going to a job and of course, it did not ever need any sleep time.
So, the key lesson that I took from all these free Forex training courses that I took is if you locate the right technology, then it is quite possible that technology could do all the work and make you lots of profits. In general what I learned from all of the Free Forex training is that if you can find enhanced technology to get things done for you, go for it! It may possibly be extremely lucrative for you!
All in all, what I gathered from all of my free Forex training is if you can dig up technology that can make you money, why not implement it as soon as humanly possible!
The discipline of artificial intelligence or predicative software is not new. As a matter of fact, a few small independent companies developed such software in the mid 90’s, but were bought out totally by large institutions that horded it for themselves and gave their clients a small fractional gain of the proceeds derived from the use of such a software.
Nowadays with so many computers and computer geniuses at work in the field, the new wave of predicative software or artificial intelligence is better, faster and more reliable. Today, first and foremost due to competition, there is a mountain of research out there on the subject of artificial intelligence and/or predicative software being use in trading programs because they can be more consistent and a lot faster.
As I stated previously, I have seen these kinds of artificial intelligence Forex market trade programs run upwards of 6 months without a single loss! Yeah, catch your breath and read that again, because it ain’t no typo! Yes, numerous trades and no losing positions! I mean 100% spot on! Sounds preposterous, but 100% dead on! Let’s be real, Accurate Forex Signals is how the money is made!
If you are on the hunt for free Forex training, may want to keep you eyes open for such a program that can yield you these startling kinds of results.
When you are relaxed with trading with this kind of software you may perhaps find you sleep a whole lot better at night and make a whole bunch of cash when you wake. Pretty cool, huh?
Time is money,so get on the run to find your Free Forex Training. Okay my friend, time is wasting away; so get moving on finding your free Forex training, without delay!
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Glass that has funny imperfections is often popular due to its individuality. There is a sense of charm about pieces that are different, however most people will always be seeking the most perfect glass they can get. They want perfectly cut glass, that is perfectly clear and perfectly free from any imperfections. A new laser-based glass cutter has now made this a reality, giving the ability to create identical perfect glasses with complex designs in a matter of minutes.
New York is where the machine was conceptualized and built, and this is where it will first go on sale to glassware producers, before it is rolled out across the country and causes a huge stir in the industry.News of tool has been buzzing around the industry markets already and investors have been clambering over themselves to get in at the base level.The company has stated that they use a powerful laser that can work in 360 degrees and is accurate to a 16th of a millimeter. It can carve the basic glass shape into whatever design you like by using a computer to guide it and can even create patterns inside the glass. The end result is a perfect product that has the quality and brilliance of crystal glass but can be produced at a fraction of the cost due to the high automated process.
There has not yet been an announcement whether the company will be selling shares on will be holding on to the equity itself, although industry leaders predict the company will be floated at some point down the line whatever happens. The New York company are reportedly looking into other applications for the glass cutting technology including creating other household items such as crystal vases or glass candle holders. The technology may even be used in industrial material shaping and design such as house and car windows
Do You Want Increased Profits? Then Go After Decreased Losses!
Hello, I’d like to share with you a frequently overlooked source of profits from your trading. It’s a simple concept yet so very important if you expect to be able to continue trading for any length of time! The concept is that of controlling both the number of losses you have and the dollar amount of those losses. I realize that statement sounds so obvious that you might be tempted to put this article away in favor of a night of bad television, but please stick with me here. I’ll share some things with you that you probably don’t expect to find here!
To better visualize the concept I’m describing, picture a large washtub, the kind you probably remember from your childhood. Now imagine the difficulty of filling the washtub if it has several ‘six-inch’ holes in the bottom! No matter HOW MANY garden hoses you have filling it up, the water is running out faster than it’s going in!! Now imagine plugging each of the holes, one at a time. Plug the first one and the difference is almost imperceptible. Plug the second hole and you begin to notice that there is less water splashing on the ground. Plug the third and you actually may see the water level in the tub begin to rise … just slightly, perhaps, but rise nonetheless! Plug ALL the holes but one and the difference becomes measurable! Now that you’re down to one hole, let’s begin to repair it a piece at a time. First we cover HALF the hole … while the tub still leaks, you can now tell there’s more water going INTO the tub than running out the bottom. Patch half the remaining leak and you begin to adapt to the idea that it’s OKAY if a little water comes out, just as long as there’s more going in than coming out!
Our trading accounts are something like that. Most new traders have HUGE trading account “holes” and the money is draining out faster than they can replace it! No matter how profitable they are on some of thier trades, they just seem to give it all BACK! If we’re smart about our trading when we notice that, we’ll STOP trading until we find the challenge and FIX it! What I’m describing are the DIRECT results of FOCUSING on the profits and almost totally forgetting about controlling the losses. There are many reasons for that but despite the reason, the results are the same. Left unchecked, such a situation will take us totally out of the trading business in a very short period of time! Does this describe you and your trading account? Would you like to know how to ‘FIX’ it? Let me share with you four RULES for trading which directly address losses and if followed, can ‘plug’ many of your profit leaks!
RULE 1. Wait for the stock to CONFIRM the anticipated direction before entering the trade
This rule can decrease the NUMBER of losses you experience. As simple as that sounds, it’s one of the most often violated principles of good trading habits. So often is this rule broken that we are all familiar with cute little descriptions such as “catching a falling piano”, or “reaching for a falling knife.” What you use for this confirmation is your own affair; price rise or fall, momentum, frequency of trades or bid / ask “size” are just a few ways. Personally I combine them all (more or less), developing a ‘feeling’ about the confirmation, rather than a measurable quantity. However you choose to define confirmation, let experience be your best teacher here and do NOT enter the trade until you’re convinced the stock is moving your direction!
RULE 2. When you are filled on the entry, place a STOP loss to minimize your potential for loss.
This rule controls the AMOUNT you can lose on any one trade. I like to use about 1/2 of the stock daily movement for my stop loss amount. For example, if a stock price moves on average, say $1 every trading day, then I’ll back off 1/2 of that, or 50 cents and place my stop loss there, limiting the losses possibly incurred on that trade. Whatever you use, be FAITHFUL in adhering to the protection afforded by the stop. In other words, DON’T CHANGE IT. If you’re stopped, you’re stopped. He who trades and runs away lives to trade another day!
So much for minimizing the NUMBER and dollar amount of losses. Equally important is allowing your profits to maximize AT THE SAME TIME! Here’s how to do that.
RULE 3. When you become profitable in a trade, replace the stop loss with a TRAILING stop, trailing by that amount of profit.
This one is so important that I believe it should be the 22nd amendment to our Constitution! Say you’re up 25 cents in a trade and you have your stop loss in at 50 cents below your entry (on long positions). Replace the stop loss with a 25 cent trailing stop. At THIS point, you WORST CASE outcome for the trade is BREAKEVEN (give or take a couple of pennies)!!! In my live trading lab on my website, I often refer to this as the MAGIC point in the trade. You have virtually NOTHING to lose and EVERYTHING to gain from that point on!
Finally, for the ‘do-it-yourself- traders …
RULE 4. Leave the trade alone from this point on!
The market overall will do a much better job of managing the trade (with the above rules observed) than you or I EVER could! Once you’ve reached the MAGIC POINT in your trade, just go away and do something else. Your trade is on autopilot!
I’m glad to have been able to spend the last few minutes sharing this with you. I hope it helps you to trade more profitably!!
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