by Phil Davis - September 2nd, 2014 7:50 am
MORE FREE MONEY!!!
Terrible numbers from China's Manufacturing Industry led to rumors of more stimulus from Beijing for Q4 and that propelled Asian markets higher this morning. The HSBC PMI report fell to 50.2 (barely expanding) for August and China's "official" PMI fell from 51.7 to 51.1.
The manufacturing slowdown adds to signs that China's "economy still faces considerable downside risks to growth in the second half of the year, which warrant further policy easing to ensure a steady growth recovery," said HSBC economist Hongbin Qu.
That's all Europe had to hear to put on their own rally caps as they've already got Draghi fever over there, in anticipation of Thursday's ECB rate decision, where a cut is widely expected to stop the Euro Zone from plunging into free-fall with Italy and others practically in a Depression at this point. That's pushing EU markets up half a point in early trading and boosting US Futures (which we're shorting).
Back to China though. As you can see above, we have a cool chart of collapsing housing prices leading one analyst to say: "The way prices have fallen, it's as if there is a global financial crisis." Ha Ha Ha – silly analyst! That's the way things would look if we were in the REAL World but this is not the real world, this is the Central Bankster's Paradise!
"The rental can't even cover the mortgage for these high-end investments – they want to offload but there are no takers."
by ilene - September 1st, 2014 2:51 pm
By John Mauldin
?“It's said that power corrupts, but actually it's more true that power attracts the corruptible. The sane are usually attracted by other things than power.”
– David Brin in The Postman
“For every good idea, ten thousand idiotic ones must first be posed, sifted, sniffed, tried, and discarded. A mind that's afraid to toy with the ridiculous will never come up with the brilliantly original."
– David Brin, Orbit interview
As I begin my 15th year of writing Thoughts from the Frontline – some 700-odd newsletters plus 400–500 editions of Outside the Box, 6 books, and scores of special reports – I decided to take a random walk back through some of my writings (and your comments!). With some glaring and notable exceptions that I would like to take off the internet (but won’t because to do so seems somewhat intellectually dishonest), the body of work has held together pretty well. My writing style has matured and so has my thought process – or at least it seems so to me. Writing this letter has been the best personal educational tool I have ever experienced, enriching my life far more than I have probably enriched yours. I’ve done my 10,000 hours. Plus. No college, no course or seminar, could provide me with the wide range of materials I’ve studied.
And that is the thing that stands out to me: the wide variety of topics we’ve covered over the years. The themes vary from week to week and month to month. I write about what interests me that week – where my research and curiosity are taking me. I am, of course, influenced by my somewhat heavy travel schedule and the interaction I have with readers from all over the world (some 65 countries now), both directly and through correspondence. I seem to attract a number of readers who are quite willing to push back and make me think about all sides of an issue. For that I’m grateful.
by Phil Davis - September 1st, 2014 8:14 am
Don't you just love lists?
Apparently, most American's do because the posts that get the most clicks are the ones with lists and quizzes. I don't do lists very often yet, somehow, I still manage to be fairly popular but let's see what happens when I make a list with a catchy headline.
This list is an update of our original 2014 Buy List, which was written on June 6th and originlaly had 20 trade ideas for the 2nd half of the year. That list quickly grew to 29 and, today, we're adding 11 more to make 40 top stock picks to take us into Q4. Those first 29 picks are already 82% successful with only HOV, IRBT, RIG, TEX and WEN failing to make gains so far and, on average, we're up 72% on our picks in just 3 months.
That's about par for the course with our winning percentages on trade ideas but what makes the Buy List special is that these are the ones we are comfortable committing long-term allocation blocks to, not just messing around with short-term trading. In fact, our 5 "losers" all represent great entry opportunities at lower prices and none are being kicked off the list as our general outlook for these stocks is measured in years, not months!
The strategy we are following is summed up nicely in this video:
As we did in building our Long-Term Portfolio, we're not going to rush in and buy everything. We will do exactly what we did in January where, following our Fall Buy List, we simply added stocks from our list whenever they became cheap. While our Members are able to pick up our trade ideas as they are released, we don't always add them to our virtual portfolios right away. As with the first half's Long-Term Portfolio, we will track every entry and exit in both our Live Weekly Webcasts, as well as in our Live Member Chat Room and alerts will be sent to our subscribers (you can join here, Basic and Premium Members get full access).
by SWW - August 31st, 2014 2:17 am
Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.
Here's the latest issue of Stock World Weekly. Click on this link and use your PSW user name and password to log in. Or take a free trial.
by Phil Davis - August 29th, 2014 8:24 am
Saved by the bad news!
August has been a spectacular month in which we ignored the most bad news ever ignored by a species that is still not extinct. With any luck, an asteriod will head straight for us next month and we can rally the markets another 5% in anticipation of more Fed easing on impact. The asteriod struck the other side of the Earth this morning as Russia Invaded Ukraine and Euro Zone Inflation plunged to 0.3%, miles below the 2.0% target considered "healthy".
This is, of course, GREAT NEWS, because it means Super Mario is free to go ahead and do something – like he always says he will do but never does. That doesn't stop people from believing it because they WANT TO BELIEVE – they want to think someone is going to save them and make all their hardships go away. 11.5% of the people in Europe are still out of work, double the rate in the US. Over 25% of the people under 25 are out of work, about the same as the US. These are horrific figures – of course people are eager to hear the words of a potential savior.
Since it's Friday, we're not going to debate the merits or discuss what a farce it all is – we've done that this week. Today we'll talk about making money.
On Tuesday, in the morning post, I suggested the TNA Sept $72.50/76.50 bull call spread at $2, selling the Sept $68 puts for $2. 10 of those would not have cost you a penny (since it netted out to $0), though about $7,500 in margin on the short puts. Today the spread is $2.50 and the short puts are $1.15 for net $1.35 or +$1,350 in 3 days, which is an 18% gain on the committed margin despite the fact that TNA has essentially gone nowhere.
I don't point this out to brag, we have plenty of trade ideas that have done much better – I point this out because it was a free trade idea, right in the morning post which anyone could have done and it…
by Option Review - August 28th, 2014 3:11 pm
Buffalo Wild Wings Inc. (Ticker: BWLD) shares are in positive territory in early-afternoon trading on Thursday, reversing earlier losses to stand up 0.50% on the session at $148.50 as of 12:15 pm ET. Options volume on the restaurant chain is running approximately three times the daily average level due to heavy put activity in the October expiry contracts. It looks like one or more traders are buying the Oct 140/145 put spread at a net premium of roughly $1.45 per contract. As of the time of this writing, the spread has traded approximately 3,000 times against very little open interest at either striking price. The put spread may be a hedge to protect a long stock position against a roughly 6% pullback in the price of the underlying through October expiration, or an outright bearish play anticipating a dip in BWLD shares in the next couple of months. The spread makes money at expiration if shares in BWLD decline 3.3% from the current price of $148.50 to breach the breakeven point at $143.55, with maximum potential profits of $3.55 per contract available on the trade in the event that shares slump 5.7% to $140.00. Shares in Buffalo Wild Wings last traded below $140.00 back in May.