Guest View
User: Pass: | become a member
Archive for the ‘Phil’s Favorites’ Category

Don’t Get Ruined by These 10 Popular Investment Myths (Part X)

Don't Get Ruined by These 10 Popular Investment Myths (Part X)

Interest rates, oil prices, earnings, GDP, wars, peace, terrorism, inflation, monetary policy, etc. — NONE have a reliable effect on the stock market

By Elliott Wave International

You may remember that after the 2008-2009 crash, many called into question traditional economic models. Why did they fail?  And more importantly, will they warn us of a new approaching doomsday, should there be one?

This series gives you a well-researched answer. Here is the conclusion of this 10-part series.


Myth #10: "Central banks and government policies control the markets."
By Robert Prechter (excerpted from the monthly Elliott Wave Theorist; published since 1979)

Virtually everyone believes this statement; certainly most economists do. Keynesians and monetarists believe that authorities can control the money supply and interest rates, and most neo-Austrians believe that the Fed is all-powerful when it comes to inflating: Whatever inflation rate it wants, it simply manufactures.

Not long ago [in late 2008 -- Ed.] the U.S. government announced that it will fully back the debt of the mortgage companies it created (Fannie Mae, Freddie Mac); it pledged to use taxpayers' money and borrow unlimited amounts to fund banks that it deems "too big to fail," while pledging that the FDIC will fund shortfalls at all other banks. At the same time, the world's top central banks offered unlimited credit at near-zero interest rates, in other words, free money.

According to the exogenous-cause model, these historic pledges and bailouts should have had immediate results. Take a look at Figure 20. Can you tell where on this graph of stock prices authorities took these actions?

According to the economists' beliefs, the only rational place for them to have taken place would be at the bottom of the market. The minute the authorities began flooding the market with liquidity is the minute it should have turned up.

Figure 21 shows that in fact these actions took place in the early portion of the biggest stock market decline in 76 years. These actions did not push stock prices back up. The market finally bottomed months later, at a time when nothing…
continue reading





Napoleon vs. Cheney: “Interrogation That Actually Works”; Icing on the “Hate-Cake”

Courtesy of Mish.

Not only is torture against international law, it also produces no useful intelligence. Common sense is enough to prove that statement.

If someone threatened to rape your sister, kill your mom,  or shackled you until you were half-dead while feeding you up your anus, you would say nearly anything to ease the pain. So would I, and so would everyone else. Anyone who disagrees is either a liar or a fool.

Even Napoleon recognized that fact.

Warning: This is a very long post. Please allow adequate time to read and digest what follows. I sincerely appreciate your effort to reading this post in entirety. Thanks.

From a Napoleon Letter to Louis Alexandre Berthier in November 1798: “The barbarous custom of having men beaten who are suspected of having important secrets to reveal must be abolished. It has always been recognized that this way of interrogating men, by putting them to torture, produces nothing worthwhile. The poor wretches say anything that comes into their mind and what they think the interrogator wishes to know.

Precisely.

“I’d Do It Again in a Minute”

Regardless of the complete futility and illegality of torture, former vice president Dick Cheney Pushes Back on Torture Report: ‘I’d Do It Again in a Minute’.

“I’d do it again in a minute,” Cheney told Meet the Press’s Chuck Todd, offering an unqualified condemnation of the Senate Intelligence Committee’s investigation into the Bush administration’s post-9/11 interrogation methods used at foreign “black sites,” which many regard as torture.

When asked about rectal feeding, which the Senate torture report said at least five detainees were subjected to, Cheney acknowledged that it was not approved as part of the program and said he believed it was done for “medical reasons.” The Senate report said there is no evidence medical need was a factor for rectal hydration.

Cheney also didn’t blink when asked about the report’s findings that at least 26 of 119 detainees were wrongfully held, including two former CIA operatives and a mentally challenged man.

“I’m more concerned with the bad guys that were released than the few that were, in fact, innocent,” said Cheney, adding that the man who became ISIS’s leader, Abu Bakr al-Baghdadi, was held in custody by the U.S. military in Iraq before being released in 2004.

No Concern for Innocents



Continue Here





The Coin of the Realm: How Inside Traders Are Rigging America

The Coin of the Realm: How Inside Traders Are Rigging America

Courtesy of Robert Reich

A few years ago, hedge fund Level Global Investors made $54 million selling Dell Computer stock based on insider information from a Dell employee. When charged with illegal insider trading, Global Investors’ co-founder Anthony Chiasson claimed he didn’t know where the tip came from.

Chiasson argued that few traders on Wall Street ever know where the inside tips they use come from because confidential information is, in his words, the “coin of the realm in securities markets.”

Last week the United States Court of Appeals for the Second Circuit, which oversees federal prosecutions of Wall Street,agreed. It overturned Chiasson’s conviction, citing lack of evidence Chaisson received the tip directly, or knew insiders were leaking confidential information in exchange for some personal benefit.

The Securities and Exchange Act of 1934 banned insider trading but left it up to the Securities and Exchange Commission and the courts to define it. Which they have – in recent decades so broadly that confidential information is indeed the coin of the realm.

If a CEO tells his golf buddy that his company is being taken over, and his buddy makes a killing on that information, no problem. If his buddy leaks the information to a hedge-fund manager like Chiasson, and doesn’t tell Chiasson where it comes from, Chiasson can also use the information to make a bundle.

Major players on Wall Street have been making tons of money not because they’re particularly clever but because they happen to be in the realm where a lot of coins come their way.

Last year, the top twenty-five hedge fund managers took home, on average, almost one billion dollars each. Even run-of-the-mill portfolio managers at large hedge funds averaged $2.2 million each.

Another person likely to be exonerated by the court’s ruling is Michael Steinberg, of the hedge fund SAC Capital Advisors, headed by Stephen A. Cohen.

In recent years several of Cohen’s lieutenants have been convicted of illegal insider trading. Last year Cohen himself had to pay a stiff penalty and close down SAC because of the charges, after making many billions. 

SAC managed so much money that it handed over large commissions to bankers on


continue reading





Pass the Cigars: US Lifts Some Restrictions on Cuba; Why Now?

Courtesy of Mish.

Sanctions and embargoes don’t work. And in the case of Cuba, it took the US 52 years to partially realize that.

In 1962, President John F. Kennedy singed into law a Cuban trade embargo. I have long known how foolish Kennedy’s decision was (and the decision of every president since).  But I did not know until today how blatantly hypocritical Kennedy’s action was.

A clip from Cigars All Around in the Financial Times explains: 

The day before Kennedy signed the law, “Kennedy ordered an aide to buy him 1,000 Petit Upmanns cigars. It was only after Kennedy got word that his request had been carried out that he authorised the new regulations that banned Cuban imports and would have made the purchase illegal.

Wow.

For 52 years, the US embargo poisoned he Cuba-US relationship. What good did it do? Did it drive Casto out of power? Or did it help keep Castro in power?

I suggest the latter.

Free trade is always beneficial and always better that war or cold war. US goods flowing into Cuba and tourists with money would have done more for a regime change than pressure.

Hopefully it won’t take 52 years for the US to realize the stupidity of sanctions on Russia. Don’t hold your breath.

Cuba’s Support of Terrorism

The Financial Times notes “Obama ordered a six month review of Cuba’s designation as a ‘state sponsor of terrorism’. Even the State Department no longer attempts to justify this label, which devalues Washington’s word on international terrorism issues and triggers international financial sanctions against Cuba.



Continue Here





The Terrorist Hackers Win: Sony Pulls Release Of “The Interview” Due To Fears Of “9/11-Style Retaliation”

Courtesy of ZeroHedge. View original post here.

Update: and moments after we wrote this, Sony itself decided to cancel the release of the movie.

Straight to "must watch" Netflix it is.

* * *

One of the biggest conspiracy theories in recent weeks has nothing to do with the stock market and the Fed, or with HFT manipulation, or with Ukraine's gold, or with who brought down the two Malaysian airliners, but whether the now beyond ridiculous drama surrounding Seth Rogen and James Franco's latest movie, The Interview, which has its very own cast of C-grade characters, including an alleged furious North Korean dictator and his hacker disciples, a mega corporation whose servers were hacked releasing the content of thousands of emails into the open, and of course, delighted marketing stuiod execs, has been staged and planned from the beginning. Because the latest development in this soap opera is almost as surreal as today's shocking detente with Cuba: as the Hill reports, America's top five movie theater chains have decided to pull the Sony Picture's comedy "after cyberattackers on Tuesday threatened Sept. 11-style attacks against any theater showing the movie."

Regal Entertainment, AMC Entertainment, Cinemark, Carmike Cinemas and Cineplex Entertainment will all withhold the film from their lineups, meaning “The Interview” will not appear in thousands of theaters nationwide, according to The Hollywood Reporter.

More for those who are, blissfully, unaware of the stupidity behind this latest contrived escalation, from The Hill:

A hacking group going by “Guardians of Peace” infiltrated Sony in late November, stealing massive amounts of data. The group has since been slowly leaking Sony’s internal documents, including unreleased films and Hollywood executives’ emails.

But on Tuesday, the group upped its rhetoric, threatening violence against any theater showing the film and even against any person in the vicinity of one of the theaters.

Many have speculated the cyber offensive is a North Korean retaliation for film, which depicts the fictional assassination of Kim Jong Un. Pyongyang


continue reading





The First Casualty of a Bear Market

The First Casualty of a Bear Market

Courtesy of 

Nick Murray says “The ability to distinguish between volatility and loss is the first casualty of a bear market.”

I turned to one of my favorite passages of his masterpiece Simple Wealth, Inevitable Wealth this morning as turmoil from overseas and the commodity markets made its way through the headlines. Nick relays a great anecdote about how much money one investor personally “lost” during the last Russian Ruble crisis in the summer of 1998…

$6,200,000,000

Yes, that’s right, it’s six billion two hundred million dollars. A very large sum of money, wouldn’t you say? Now what, you ask, does it represent?

It is roughly how much Warren Buffett’s personal shareholdings in his Berkshire Hathaway, Inc. declined in value between July 17 and August 31, 1998. And now for the six billion dollar question. During those forty-five days, how much money did Warren Buffett lose in the stock market? 

The answer is, of course, that he didn’t lose anything. Why? That’s simple: he didn’t sell.

In July and August of 1998, I was doing time at a brokerage firm on Long Island as a summer intern. The brokers were panicking and the partners began yelling at them to get off margin and help maintain order in the Asia Pacific technology stocks in which the firm made markets. It wasn’t working, from what I could surmise. The simultaneous meltdown of several Far East currencies and then the toppling of the Ruble proved too much for US markets and eventually the contagion found its way here.

People forget that, in the midst of the massive late 1990’s bull market, we had this two-month bear market episode in which the S&P 500 dropped by a quick 25 percent. The giant Nobel laureate-run hedge fund, Long Term Capital, imploded as a result and Greenspan was forced to slash rates overnight while the New York Fed arranged a Wall Street-subsidized bailout. Things got back to normal by the end of the fall, but, for a minute there, the panic was palpable and it eventually slammed everyone.

I bring this up because there are some parallels between then


continue reading





FOMC Statement: Does Change From “Considerable Time” to “Patient” Make Any Difference Whatsoever?

Courtesy of Mish.

Today the Fed made its much awaited FOMC Announcement.

Pundits poring over the statement have generally concluded as does the Financial Times, that Fed Signals Tightening by Mid-2015.

Why?

Because the Fed dropped its forecast that it will keep low interest rates for a “considerable time“.

Now the Fed says it can be “patient” in judging when to start raising rates.

The Financial Times claims the “new language is designed to reassure markets that rate rises are not imminent.

If rate hikes are not imminent, what difference does the change make?

Three Dissents

Hawk: Richard Fisher objected because “improvement in the U.S. economic performance since October has moved forward, further than the majority of the Committee envisions, the date when it will likely be appropriate to increase the federal funds rate”

Dove: Narayana Kocherlakota believes “the Committee’s decision, in the context of ongoing low inflation and falling market-based measures of longer-term inflation expectations, created undue downside risk to the credibility of the 2 percent inflation target.”

Data Dependent: Charles Plosser believes “the statement should not stress the importance of the passage of time as a key element of its forward guidance and, given the improvement in economic conditions, should not emphasize the consistency of the current forward guidance with previous statements.”



Continue Here





Gasoline Expenditure Forecast at Lowest Levels in 11 Years

Courtesy of Mish.

The US Energy Information Administration (EIA) forecasts U.S. Household Gasoline Expenditures in 2015 On Track to be the Lowest in 11 Years.

The average U.S. household is expected to spend about $550 less on gasoline in 2015 compared with 2014, as annual motor fuel expenditures are on track to fall to their lowest level in 11 years. Lower fuel expenditures are attributable to a combination of falling retail gasoline prices and more fuel-efficient cars and trucks that reduce the number of gallons used to travel a given distance.

Household gasoline costs are forecast to average $1,962 next year, assuming that EIA’s price forecast, which is highly uncertain, is realized. Should the forecast be realized, motor fuel expenditures (gasoline and motor oil) in 2015 would be below $2,000 for the first time since 2009, according to EIA’s December 2014 Short-Term Energy Outlook (STEO).

The price for U.S. regular gasoline has fallen 11 weeks in a row to $2.55 per gallon as of December 15, down $1.16 per gallon from its 2014 peak in late April and the lowest price since October 2009. Gasoline prices are forecast to go even lower in 2015. Gasoline prices are falling because of lower crude oil prices, which account for about two-thirds of the price U.S. drivers pay for a gallon of gasoline.

Increases in fuel economy are also contributing to lower motor fuel expenditures, as cars and trucks travel farther on a gallon of gasoline. According to the Environmental Protection Agency, the production-weighted fuel economy of cars has increased from 23.1 miles per gallon (mpg) for model-year (MY) 2005 cars to almost 28 mpg for MY2014, an increase of about 21%. Similarly, the fuel economy for trucks has increased 19%, from 16.9 mpg to 20.1 mpg in the same time frame.

Expenditure Forecast

The expenditure forecast is not surprising given the drop in oil prices.

West Texas Crude

I commented on oil factors in What’s Behind the Plunge in Oil? Winners and Losers? Boon to Spending or Recessionary?

Short and Longterm Factors

  1. Slowing global economy, especially China and Europe
  2. US production expansion
  3. OPEC pumping above quotas – they all cheat
  4. Iran embargo failing
  5. Increased fuel economy
  6. Attitudes of millennials towards cars and driving



Continue Here





Surprise… Everyone Was Wrong About The End Of QE

Courtesy of Lance Roberts of STA Wealth Management


continue reading





Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Joshua commented on the QZ article I posted a couple days ago and perfectly summarized the take-home message into an Investing Lesson. 

Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Courtesy of 

worst

The chart above comes from Matt Phillips at Quartz and is a good reminder of why you shouldn’t invest in stupid sh*t. Obviously any asset can decline in price – blue chip stocks, your house, etc – nothing is immune. But don’t go out looking for additional trouble when the world is perfectly capable of handing you losses on the regular stuff.

****

Recall Bitcoin's ugly chart for the year (source).





 
 
 

Phil's Favorites

Don't Get Ruined by These 10 Popular Investment Myths (Part X)

Don't Get Ruined by These 10 Popular Investment Myths (Part X)

Interest rates, oil prices, earnings, GDP, wars, peace, terrorism, inflation, monetary policy, etc. -- NONE have a reliable effect on the stock market

By Elliott Wave International

You may remember that after the 2008-2009 crash, many called into question traditional economic models. Why did they fail?  And more importantly, will they warn us of a new approaching doomsday, should there be one?

This series gives you a well-researched answer. Here is the conclusion of this 10-part series.

Myth #10: "Central banks and government policies control the ...



more from Ilene

Zero Hedge

The Secular Extinction Of Stock Market Bears

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

This week's Investors' Intelligence survey responses highlight the unprecedented reluctance of financial advisors to turn bearish...

 

 

As the secular extinction of stock market bears continues...

 

But - as we hear day after day on financial media - there is still a lot of negativity out there (apparently)?

 

Source: @Not_Jim_Cramer

...

more from Tyler

Chart School

Relief Bounce in Markets

Courtesy of Declan.

Those who took advantage of markets at Fib levels were rewarded.  However, this looked more a 'dead cat' style bounce than a genuine bottom forming low.  This can of course change, and one thing I will want to see is narrow action near today's high. Volume was a little light, but with Christmas fast approaching I would expect this trend to continue.

The S&P inched above 2,009, but I would like to see any subsequent weakness hold the 38.2% Fib level at 1,989.


The Nasdaq offered itself more as a support bounce, with a picture perfect play off its 38.2% Fib level. Unlike the S&P, volume did climb in confirmed accumulation. The next upside c...

more from Chart School

All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David

Digital Currencies

Chart o' the Day: Don't "Invest" in Stupid Sh*t

Joshua commented on the QZ article I posted a couple days ago and perfectly summarized the take-home message into an Investing Lesson. 

Chart o’ the Day: Don’t “Invest” in Stupid Sh*t

Courtesy of 

The chart above comes from Matt Phillips at Quartz and is a good reminder of why you shouldn’t invest in s...



more from Bitcoin

Insider Scoop

Pivotal Research Upgrades Twitter & Google, Finds Both Are Undervalued By 20%

Courtesy of Benzinga.

Analysts at Pivotal Research Group on Wednesday upgraded shares of Google Inc (NASDAQ: GOOGL) and Twitter Inc (NYSE: TWTR) from Hold to Buy.

Analyst Brian Wieser finds both companies are currently undervalued by 20 percent.

Shares of Google were recently up 1.5 percent at around $503.

Shares of Twitter were up 1.6 percent at $35.63.

...

http://www.insidercow.com/ more from Insider

OpTrader

Swing trading portfolio - week of December 15th, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

Sabrient

Sector Detector: Energy sector rains on bulls' parade, but skies may clear soon

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Scott Martindale of Sabrient Systems and Gradient Analytics

Stocks have needed a reason to take a breather and pull back in this long-standing ultra-bullish climate, with strong economic data and seasonality providing impressive tailwinds -- and plummeting oil prices certainly have given it to them. But this minor pullback was fully expected and indeed desirable for market health. The future remains bright for the U.S. economy and corporate profits despite the collapse in oil, and now the overbought technical condition has been relieved. While most sectors are gathering fundamental support and our sector rotation model remains bullish, the Energy sector looks fundamentally weak and continues to ran...



more from Sabrient

Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly.

Click here and sign in with your user name and password. 

 

...

more from SWW

Option Review

SPX Call Spread Eyes Fresh Record Highs By Year End

Stocks got off to a rocky start on the first trading day in December, with the S&P 500 Index slipping just below 2050 on Monday. Based on one large bullish SPX options trade executed on Wednesday, however, such price action is not likely to break the trend of strong gains observed in the benchmark index since mid-October. It looks like one options market participant purchased 25,000 of the 31Dec’14 2105/2115 call spreads at a net premium of $2.70 each. The trade cost $6.75mm to put on, and represents the maximum potential loss on the position should the 2105 calls expire worthless at the end of December. The call spread could reap profits of as much as $7.30 per spread, or $18.25mm, in the event that the SPX ends the year above 2115. The index would need to rally 2.0% over the current level...



more from Caitlin

Market Shadows

Official Moves in the Market Shadows' Virtual Portfolio

By Ilene 

I officially bought 250 shares of EZCH at $18.76 and sold 300 shares of IGT at $17.09 in Market Shadows' Virtual Portfolio yesterday (Fri. 11-21).

Click here for Thursday's post where I was thinking about buying EZCH. After further reading, I decided to add it to the virtual portfolio and to sell IGT and several other stocks, which we'll be saying goodbye to next week.

Notes

1. th...



more from Paul

Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



more from Pharmboy

Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>