Archive for November, 2013

Comment by onemantrading

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  1. onemantrading

     The best article I read this year!  This should be a must read for any investor.
    Best Regards on a great job,  Mr. G Jones







The “Anti-Widowmaker” Trade: Get Paid To Wait For The Japanese House Of Card To Collapse

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

So many traders think the key to investment riches lies in buying at the bottom or selling at the top: Such a fine but misguided notion. The cold reality is that unless one has (illegal) inside information, you will only transact at these locations by pure happenstance. The best managers can enter a position in a zip code near the bottom or top, but not precisely. This is why the most successful investors recognize that sizing is the critical concept. A position that is too small will not justify the effort involved in discovering a valuable idea. Even worse, a position that is too large may force a “stop out” before a brilliant theme reaches its denouement. This Commentary reveals a way to gain exposure to a popular idea, but in a manner that will allow one to hang on for the long ride it may take for full realization.

The lesson here is that being “right” is just not good enough to claim investment victory, one must find a way maintain exposure to the investment premise long enough to earn a profit. So let’s turn our focus to what may surely be the next “big investment theme” that has so far only succeeded in gaining the moniker of “The Widow-Maker”. If you guessed wagering upon when the Helicopter Economy of Japan will finally lose altitude, you would be correct.

 

In a tree saving effort, let me boil my argument down to this: “It is never different this time.”

- Harley Bassman, Credit Suisse      

That Japan’s economy is doomed (as best seen in this chart), as are its government bonds, is unquestionable. There is simply no way the country, faced with an inescapable demographic collapse… 

…can crawl its back to viability without imploding in an eventual deflationary singularity, from which, however, courtesy of the BOJ’s epic printathon, it may eventually inflate away its debt, but not before crucifying its currency, and the living standards of its population. In other words, there is no realistic escape.

This is not news. The problem is that for many – especially the Japanese experts – this has not been news for years…
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Comment by David Ristau

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  1. David Ristau

     Pvipul – Yeah would definitely buy if it got into this range. Unfortunately, C has not hit our range of buying. If you bought at 4.69 or 4.68…congrats. I can’t really change the range once I have locked it in writing. 

    Liminal – Sorry for not getting back to you earlier. What we want to do is to figure out what you are happy with in gains. Daytrading is all about knowing how much you want. In my case, I look to make 2-3% per day everyday. Its not much in the short term yet if consistent can be a lot. If you make any money…you are making money. Its never bad to be conservative. Yet, we don’t want to be conservative based on emotions. Puling out at 12.30 would be good for me because I got in at 12.10. I think if a couple hours in you have seen such a small range of movement in the whole market, then its probably okay to be happy with just 1%. On the other hand, if you are looking for 2%, I would hold until you get there or the day is over. That is how I play, typically.







Comment by OptionSage

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  1. OptionSage

    Great read pprice, thanks for bringing CAKE to our attention!







Guest Post: Krugman’s Adventures In Fairyland

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by William L Anderson of The Ludwig von Mises Institute,

After studying and teaching Keynesian economics for 30 years, I conclude that the “sophisticated” Keynes­ians really do believe in magic and fairy dust. Lots of fairy dust. It may seem odd that this Aus­trian economist refers to fairies, but I got the term from Paul Krugman.

According to Krugman, too many people place false hopes in what he calls the “Confidence Fairy,” a creature created as a retort to economist Robert Higgs’s concept of “regime uncertainty.” Higgs coined that expression in a 1997 paper on the Great Depression in which he claimed that uncertainty caused by the policies of Franklin Roosevelt’s New Deal was a major factor in the Great Depression being so very, very long.

Nonsense, writes Krugman. Investors are not waiting for governments to “get their financial houses in order” and protect private property. Instead, he claims, investors are waiting for governments to spend in order to create enough “aggregate demand” in the economy to bring about new investments and, one hopes, full employment.

According to Higgs, the “humor columnist for the New York Times, Paul Krugman, has recently taken to defending his vulgar Keynesianism against its critics by accusing them of making arguments that rely on the existence of a ‘confidence fairy.’ By this mockery,” Higgs says, “Krugman seeks to dismiss the critics as unscientific blockheads, in contrast to his own supreme status as a Nobel Prize-winning economic scientist.”

It seems, however, that Krugman and the Keynesians have manufactured some fairies of their own: the Debt Fairy and the Inflation Fairy. These two creatures may not carry bags of fairy dust, but they might as well, given that their “tools” of using government debt and printing money to “revitalize” the economy have the same scientific credibility.

Let us first examine the Debt Fairy. According to the Keynesians, the U.S. economy (as well as the economies of Europe and Japan) languishes in a “liquidity trap.” This is a condition in which interest rates are near-zero and people hoard money instead of spending it. Lowering interest rates obviously won’t spur more business borrowing, so it is up to the government to take advantage of the low rates and borrow (and borrow).

If governments issue enough debt, argue Debt Fairy True…
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Comment by yopauly

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  1. yopauly

    CELG- Looking really hard at some







Comment by ilene

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  1. ilene

    Jmm, guess we’re not in agreement on this topic… 
     
    <I have worked a lifetime in the field of psychiatry and the truth is that psychiatric diagnoses of this kind are a kind of circular argument.>

    Are you a psychiatrist? What kind of work do you do in the field?

    I don’t think the diagnosis is circular and doubt that people get diagnosed as "psychopaths" because they did something bad. While there’s a higher rate of diagnosed "psycho or sociopaths" in prison, the percent is less than half.  I’ve seen a few statistics today, all less than 50%, some way less. In contrast, the estimate for "psychopaths’ among the general population is about 1%. (I’m not going to find all the numbers that I came across earlier.)

    <A person does something that someone else thinks is bad, so he must have a mental disorder.>

    I don’t think anyone is putting forth "doing something bad" as criteria for a mental disorder.  

    <Either way, it is still a circular argument. Someone does something bad, therefore they must be a psychopath. If a man gets a woman pregnant and then abandons her and a child, he must be a psychopath if he doesn’t  accept responsibility for his own children.>

    I doubt many people would seriously make that argument. 
     
    <Nearly everybody would be a psychopath except that there are laws to keep people straight, and most people are sufficiently scared of being caught that they are scared straight.>

    Sounds like you’re saying fear of being caught is the biggest barrier to being a psychopath (if there is a such thing), but rather we are all just psychopaths but too afraid of getting caught to act like ones?  







Grant Williams On Flushing The Impurities Of QE From The System

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Grant Williams "pulls no punches" in this all-encompassing presentation as the "Things That Make You Go Hmmm" author reflects on what is behind us and looks ahead at the ugly reality that we will face when "the impurities of QE are finally flushed from the system." Central bankers of today have "changed everything" he chides, "in ways that will ultimately end in disaster." Following extraordinarily easy monetary policies across all of the world's central banks, Williams explains why "we are now near the popping point of the 3rd major bubble of the last 15 years," each bigger than the last. The only way Janet Yellen avoids being at the helm when this ship goes down is to blow an even bigger bubble than Bernanke's government bond experiment, "which is highly unlikely." From how QE works, why many don't "feel" wealthy anymore, to the fact that "the geniuses that gave this thing life, don't have the guts to kill it," Williams warns, ominously, "the bills have come due on the blissful latest 30 years."

Starting at around 2:30… Williams introduces the 'extraordinary' differences with today's crop of central bankers

 

5:30 The bubble blowing begins (and ends)

6:45 How QE Works and "why the geniuses that gave this thing life, don't have the guts to kill it."

7:45 Investing Now and Then

9:00 "The bills have come due on the blissful latst 30 years"

9:30 The implications for markets

 

11:00 BoJ specifics…

11:30 Why rotating from bonds to stocks is nuts – even though bonds are in a bubble

13:00 China is flashing red… "if you thikn that doesn't mean anything, then you're wrong"

14:00 Aussie macro and micro economics

18:30 Pension Funds disaster pending – return projections are entirely wrong

22:30 Central Deviousness

23:45 Where Does That Leave Us? - "The Taper is not going to happen in any meaningful way" – The US economy is simply not strong enough.

26:00 So What Do We Do

 

30:00 "Be Brave – Take your money out of the markets and go to cash."

31:00 "Once the impurities of QE are flushed from the system, we can go back to investing in a world that is understandable"

31:30 We've been here before…

 

"Returning to a world
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Black Friday: A Shameful Orgy Of Materialism

Courtesy of Michael Snyder of Economic Collapse

Black Friday It has been called "America's most disturbing holiday".  Black Friday is the day when millions of average Americans wait outside retail stores in the middle of the night in the freezing cold to spend more money that they do not have for more cheap Chinese-made products that they do not need. It is a day when the rest of the world makes fun of Americans for behaving like "rabid animals."

It truly is a shameful orgy of materialism.  It is being projected that approximately 140 million Americans will participate in this disgusting national ritual this year. Sadly, most of them have absolutely no idea that they are actively participating in the destruction of the economic infrastructure of the United States.  If you don't understand why this is true, please be sure to read this entire article.

The amount of merchandise that is purchased on Black Friday is staggering.  For example, just consider how much stuff is sold at Wal-Mart alone:

Wal-Mart said it recorded more than 10 million register transactions between 6 p.m. and 10 p.m. Thursday in its stores and nearly 400 million page views that day on walmart.com. It sold 2.8 million towels, 2 million televisions, 1.4 million tablets, 300,000 bicycles and 1.9 million dolls. Big-ticket electronics like big-screen TVs and new videogame consoles were among the top sellers.

Every year, Black Friday seems to bring out the worst in many people, and this year was certainly no exception. The following are just a few of the national headlines about the rioting and the violence that were witnessed…

-"Holiday shopping season kicks off with fights, arrests"

-"Violence flares as shoppers slug it out for best Black Friday deals"

-"Watch Screaming Mobs Fight Over Televisions At Wal-Mart"

-"Two Arrested After Stabbing Over Parking Space At Wal-Mart"

-"Rialto Walmart Thanksgiving brawl
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Russell Napier: “We Are On The Eve Of A Deflationary Shock “

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In the aftermath of Ray Dalio’s conversion to an inflationista earlier this year (even if he has since once again been pushing a deflationary agenda when he once again went long Treasurys in late September as Zero Hedge reported previously), which promptly got such permanent deflationists as David Rosenberg to change their multi-year tune, it seemed as if there was nobody left in the deflationary camp. Which, implicitly meant Bernanke was winning as the world’s expectations for a return to inflation were rising (remember: hyperinflation has nothing to do with inflation per se, and everything to do with loss of confidence in a currency, even if formerly a reserve), and also meant the Fed would need to do less to further its reflationary agenda.

Alas, as the Taper Tantrum and the shock upon its subsequent withdrawal showed, not to mention the recent outright disinflation in Europe, any rumors that the Fed was back in control were wildly exagerated, and here we find ourselves, entering the last month of 2013 with loud speculation that not only will the BOJ increase its own QE but the ECB itself will have no choice but to join the QE party (even as the Fed may or may not taper although it is increasingly looking likely that with an economy this late in the cycle, Yellen will simply forego tapering altogether, and may even navigate Bernanke’s chopper) in order to stoke even more inflation as the current amount was, surprise, insufficient. We ignore all discussion of what such a reckless action would mean for the credibility of fiat, although we remind readers that right now both the US and Japan monetize 70% of their gross bond issuance, and thus deficit.

So with everyone expecting deflation to have been conquered early in 2013, only for events to once again show that neither is it conquered, nor are central banks in charge despite having a collective balance sheet of over $10 trillion, we have once again gotten a demonstration of Bob Farrell’s rule #9: ” When all the experts and forecasts agree – something else is going to happen.” And yet, that is not exactly true: not all “experts” think the Fed has won the fight, and the deflation has been conquered (what the Fed’s…
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Zero Hedge

Belgian F-16 Pilot Ejects Before Fiery Crash, Gets Caught In High Voltage Power Lines

Courtesy of ZeroHedge View original post here.

A Belgian F-16 fighter jet crashed in Northwestern France on Thursday, leaving one of its pilots hanging by his parachute from high voltage electricity lines, according to the BBC

Both pilots had minor injuries after they ejected from the plane, which clipped the roof of a house and crashed in a field near Pluvinger. The pilot stuck in the 250,000 volt power lines was brought down after a two hour rescue operation by French emergency ser...



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Phil's Favorites

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Digital Currencies

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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The Technical Traders

Is A Price Revaluation Event About To Happen?

Courtesy of Technical Traders

Skilled technical traders must be aware that price is setting up for a breakout or breakdown event with recent Doji, Hammer
and other narrow range price bars.  These types of Japanese Candlestick patterns are warnings that price is coiling into
a tight range and the more we see them in a series, the more likely price is building up some type of explosive price breakout/breakdown move in the near future.  The ES (S&P 500 E-mini futures) chart is a perfect example of these types of price bars on the Daily chart (see below).

Tri-Star Tops, Three River Evening Star patterns, Hammers/Hangmen and Dojis are all very common near extreme price peaks and troughs.  The rea...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga

  • Credit Suisse raised IHS Markit Ltd (NYSE: INFO) price target from $68 to $76. IHS Markit shares closed at $67.75 on Thursday.
  • Wedbush boosted Restoration Hardware Holdings, Inc (NYSE: RH) price target from $170 to $185. RH shares closed at $169.49 on Thursday.
  • Mizuho lifted Seagate Technology PLC (NASDAQ: STX) price target from $46 to $50. Seagate shares closed at $52.94 on Thursday.
  • UBS raised the price target for Weight Watchers Intern...


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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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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...

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