Archive for February, 2018

Sellers Double Down

Courtesy of Declan.

Yesterday established a round of profit-taking after Monday’s breakouts had suggested something more positive in the works. Unfortunately, another round of selling ranking as higher volume distribution left indices in a more precarious state.

The Semiconductor Index had come close to tagging 1,400 but the index looks to have confirmed a bearish ‘evening’ star as part of a double top. A drop below 1,340 would send bulls running to the hills and open up tests of the slower rising channel and 200-day MA.

The S&P fell back inside the breakout consolidation but it hasn’t yet reversed said breakout. Another days worth of selling would probably be enough to kill it and really put the cat amongst the pigeons.

The Nasdaq held up better in the face of selling with technicals hanging on. Relative performance managed a new swing high in the process.

But the same could not be said of the Russell 2000 as relative performance accelerated lower. The index is struggling and a third test of the 200-day MA – should it occur (and probably will) – is unlikely to hold.

For tomorrow, longs will not want to see a third day of selling as this will simply embolden shorts and keep any potential buyers on the sidelines.

You’ve now read my opinion, next read Douglas’ blog.

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Changes To Facebook’s Algorithm Have Claimed Their First Casualty

Courtesy of ZeroHedge. View original post here.

Media companies have been waiting for the other shoe to drop since Facebook announced changes to its all-important newsfeed algorithm that (at least on paper) were designed to stop posts from businesses, brands and media from “crowding out” personalized content.

Now, barely six weeks after the changes were first announced, Facebook’s decision to deprive publishers from a crucial stream of user traffic has claimed its first casualty: A four-year-old publisher called LittleThings.

The change, according to LittleThings’ COO Gretchen Tibbits, had a “material” impact on the site’s traffic, killing 75% of its organic reach, according to DigiDay. 

LittleThings’ comScore traffic declined to 40 million this month from 58 million last May. The closure will leave the company’s 100 employees without jobs.

Facebook CEO Mark Zuckerberg unveiled the changes in a blog post published early last month, claiming that Facebook’s internal research had determined that its users are happier when their feeds are filled with personalized content – like photos from their neice’s graduation – while news and paid advertising typically lead to feelings of malaise.

Of course, anybody who’s been following the monthslong battle between Facebook and Democratic lawmakers over its “failure” to stop a Russian troll farm that has since been indicted by Special Counsel Robert Mueller from distributing $100,000 worth of paid political content on Facebook’s platform.


Unfortunately for the media industry, the fallout from this decision has only just begun to be felt.

Facebook’s algorithm change will probably do lasting harm to dozens – if not hundreds – of publishers who depend on the company’s algorithm to drive traffic to their content. But LittleThings’ aversion to taking outside money (the site was self-funded) meant there was little in the bank to tide the company over during a downturn. The site was in the middle of a pivot away from programmatic advertising toward more lucrative direct sales, as giant American consumer brands felt LittleThings’ inspirational content would be an important counterpoint to the often dreary news cycle.

Because it will also de-prioritize paid ads, the decision is expected to harm the company’s bottom line. Unsurprisingly, its shares tanked after Zuckerberg announced the changes.

LittleThings had other factors working against it. Unlike a lot of distributed media upstarts that chased audiences on platforms using VC money, LittleThings was self-funded, which meant there

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Arizona Funds “Freedom Schools” To Counter Liberal Hegemony On Campus

Courtesy of ZeroHedge. View original post here.

Authored by Nikita Vladimirov via Campus Reform,

Arizona colleges and universities are implementing new academic programs designed to broaden intellectual diversity by examining the importance of Western culture and America’s founding.

According to The New York Times, the new initiatives, referred to by some as “freedom schools,” are backed by Arizona’s GOP lawmakers and funded by the state.

Arizona State University describes its School of Civic and Economic Thought and Leadership as a “new kind of program” that “looks beyond time and borders to explore the fundamental questions of life, freedom, and governance.”

The school explains that the new initiative “looks inward to the guiding principles of America’s founders and the leaders who have inspired us,” while also seeking to combine “classic works and altruistic statesmanship to develop a new kind of leader: trained in critical thought, humble about human imperfection, and ready for anything.”

Last weekend, ASU’s newly-funded school hosted a conference that welcomed students and faculty to discuss “the meaning of the First Amendment on college campuses and free inquiry and intellectual diversity in higher education.”

The conference included lectures by various experts from across the country and panels on free expression, diversity, and challenges in higher education. Other events addressed topics on “Negotiating Controversial Speakers on Campus,” “Freedom of Speech and Thought on Campus: What Role for the First Amendment?” and “State Legislative Remedies to Free Speech Challenges on Campus: Are They Consistent with Academic Freedom?”

Alongside ASU’s School of Civic and Economic Thought and Leadership, The University of Arizona has also launched a new academic project called the “Department of Political Economy and Moral Science.” 

According to the school’s website, the new department was approved last October and will teach a variety of courses relating to Political Science, Philosophy, Economics, and Law.

“We also are part of the team of scholars at Arizona that for the past six years has been peer-ranked as the world’s #1 graduate program in political philosophy,” the department boasts. “That astounding ranking seems to be based largely on our distinctively empirical approach to theorizing about principles of morality and justice, and about how people have to live in order to make sure that their world is better off with them than without them.

Republican State Representative Jay Lawrence, one…
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Total Student Debt In America Now Exceeds The Cost Of Iraq War

Courtesy of ZeroHedge. View original post here.

We’ve all seen the headlines: the cost of university education in the United States has become completely debilitating. And student debt keeps rising to record high levels.

It’s almost commonplace now for a 22-year old to graduate from university with $50,000+ in student debt.

According to data from the Federal Reserve, the total amount of student debt in the United States is now $1.5 trillion.

As’s Simon Black notes, that’s more than the estimated $1.3 trillion in direct costs that the government spent fighting the War in Iraq.

What’s probably even more bizarre is that the US government actually owns about 70% of those student loans– a total of $1.06 trillion.

I discovered this over the weekend when I was reviewing the federal government’s recently published financial statements for fiscal year 2017.

Student loans actually constitute the #1 asset of the US federal government, comprising about 30% of its balance sheet.

In other words, young people of America owe more money to the federal government than the value of every tank, every bullet, every aircraft carrier, every acre of land in the national parks.

That’s a pretty sad statement to make.

And remember that student debt in America is a very special kind of debt: it chases you around forever.

Thanks to a piece of legislation signed into law by Bill Clinton in 1998, student debt is almost impossible to ‘discharge’.

So unlike just about every other type of debt like a home mortgage or medical debt, student debt is extremely difficult to wipe away through bankruptcy procedures.

It’s more a form of indentured servitude than it is debt. There’s no escape.

To me, this really calls into question the long-term value of a university education.

Now, there’s a lot of data on this topic, and it’s all over the board.

A 2016 study in the United Kingdom by the Institute of Fiscal Studies, for example, showed that median salaries for graduates at several dozen universities were lower than non-university graduates.

On the other hand, researchers from the Federal Reserve Bank of New York have argued that university graduates will earn, on average, $1 million more over their lifetimes than people who do not graduate from university.

This is what they call the ‘wage premium’ of a university degree.

But even their own data shows that this…
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Berkshire Hathaway’s Annual Report – Douglas R. Jamieson, President Of GAMCO Asset Management Inc

By VW Staff. Originally published at ValueWalk.

Berkshire Hathaway’s Annual report – Douglas R. Jamieson, President of GAMCO Asset Management Incathaway’s Annual report

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You most likely read Warren Buffett’s 2017 chairman’s letter in Berkshire Hathaway’s Annual report that was released on Saturday, February 24, 2018.

Nearly 20% of the letter was spent on reviewing the results of his 10 year bet with Protégé Partners. The bet was that a mindless index – the S&P 500 would outperform five Fund of Funds over a ten year period.

Warren Buffett won the bet and his designated charity – Girls Inc. of Omaha received $2.2 million. Over the ten year period, from the beginning of 2008 thru 2017, the S&P 500 generated a 126% total return versus 88% total return for the best performing Fund of Fund.

Over the same 10 year time frame, GAMCO’s All-cap-value composite generated a 148% gross return or 134% on a net basis.

Warren Buffett, Warren Buffet, stock market, value investing, bargain stocks, bargain hunting, value stocks, value equities, Warren Buffett quotes, investment methods, investing philosophy Valuewalk, berkshire hathaway

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WTFebruary: Stocks Worst In 9 Years As Record Win-Streak Abruptly Ends

Courtesy of ZeroHedge. View original post here.

This is the first down-February for The Dow since 2009, the worst February for the S&P 500 in 9 years, first down-month since Oct 2016, and biggest monthly drop since Jan 2016 (right before the Shanghai Accord)…

Short volatility in January vs short volatility in February

— Ramp Capital♿️ (@RampCapitalLLC) February 28, 2018

Well it happened…

This is also the worst month since August 2015 for ‘balanced’ portfolios with an aggregate bond and stock mix down dramatically (both bonds and stocks down)…

All the major RP funds bounced back but had ugly months in the end…

Let’s look at February for US equity indices – first cash…

And futures (which show the more extreme swings)…

Stuff started to hit the fan into the close today…Dow is down 700 points from when Powell started speaking in hawkish tones (and VIX is up 5vols, back above 20)

So much for “rebalancing flows” into month-end.

Observing the rest of the February carnage…

  • Trannies worst month since Jan 2016

  • Small Caps worst month since Oct 2016

  • VIX biggest monthly jump since Aug 2015

  • 30Y TSY Yield biggest monthly jump since Nov 2016

  • 2Y TSY Yield up 6 straight months

  • HY Credit (HYG) worst month since Jan 2016

  • HY Spreads worst month since Sept 2015

  • USD Index up most since Feb 2017

  • WTI worst month since Aug 2017

  • Gold worst month since Sept 2017

  • Silver worst month since Nov 2016

Since The Fed last hiked rates, Gold is the winner and bonds the biggest loser…

The February equity carnage has been global…

  • European stocks had their worst month since June 2016 (Brexit) and worst Feb since 2009.
  • Japan’s worst month since June 2016.
  • China’s worst month since Jan 2016.

S&P saw its ‘VIX’ up most in Feb but the entire vol complex ended higher…

The S&P broke below its 50DMA…

Liquidity disappeared today – this was the lowest liquidity for any GDP data release day since at least 2008 (h/t Nanex)

Treasuries rallied today, erasing the Powell Pop in yields…
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Why everyone’s talking about ‘Animal Spirits’


Why everyone’s talking about ‘Animal Spirits’

Courtesy of 

Over the last few weeks people have stopped me at events and parties to talk about Animal Spirits, the new podcast from my colleagues Michael Batnick and Ben Carlson. It’s not hard to understand why. It’s literally the best. Their authenticity, curiosity and senses of humor are what make it different from anything else you can listen to each week.

Their fans range from financial advisors to traders to fund managers to young investors learning the game. I think each week there’s something for everyone.

In this week’s episode, Mike and Ben cover:

  • Our takeaways from the latest Warren Buffett annual shareholder letter.
  • What happens to the Berkshire Hathaway share price when Buffett is no longer steering the ship?
  • When stocks and bonds both fall at the same time.
  • The coming baby boomer retirement crisis.
  • What to do if you haven’t saved anything for retirement yet.
  • Why millennials should think about retirement differently than their parents.
  • The Uhaul shortage in the Bay Area.
  • My Adam Sandler theory on comedy and Silicon Valley.
  • The best year ever in the Dow took place during the worst long-term returns.
  • How financial reporting is often like the show Cops and much more.

Make sure to subscribe (iTunes, Overcast, whatever). And you can follow the boys on Facebook here, for all the latest updates from their blogs and the show.

Florida Killer Sought $800,000 Inheritance Before Shooting According To Court Filing

Courtesy of ZeroHedge. View original post here.

Accused Florida school shooter Nikolas Cruz tried to obtain a reported $800,000 inheritance nearly two months before the shooting, according to court records.

The 19 year old signed a retainer agreement with lawyer Audra Simovitch on December 13 in order to pursue his share of the estate left behind by his adoptive mother, Lynda Cruz, who died in November. Nikolas was set to receive his share when he reached the age of 22, according to an order by Broward County Probate Division Judge Charles Greene.

Simovich accused the public defender's office of "obstructing justice" by denying access to Cruz, and telling the guardian of his younger brother, 42-year-old Roxanne Deschamps, that the suspected shooter may wish to "waive his interest in the estate."

If Cruz is allowed to access the inheritance, he wouldn't be entitled to a free defense attorney under Florida state law. 

Of note, a call placed to the FBI one month before the massacre by a person close to Nikolas Cruz said that he was set to inherit $25,000 per year from his mother's life insurance policy when he turned 21 until the age of 30, and that she was worried that he would spend it on guns, according to transcripts leaked to the WSJ. 

One day after the February 14 shooting, Simovich, acting as a probate attorney, filed court papers on behalf of Deschamps, claiming that she has an interest in Lynda Cruz's estate since she is caring for Zachary Cruz – Nikolas's brother, who has a 50% interest in the state of Lynda.

Zachary, who turned 18 last week, was reportedly taken to a psychiatric hospital "against his will" two days after the shooting at the request of Deschamps under Florida's Baker Act.

After the Cruz brothers' adoptive mother died, they moved in with Deschampps – however Nikolas was kicked out after a few weeks amid agruments over his weapons. Cruz then moved in with Kimberly and James Snead, who agreed to let him live with them last Thanksgiving on the condition that he keep his guns in a safe.

Of note, the caller who tipped the FBI off to…
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Geopolitical Risk Is On The Rise In Oil Markets

Courtesy of ZeroHedge. View original post here.

Authored by Nick Cunningham via,

In the long-term, many oil analysts expect the world to become increasingly dependent on oil production from the Middle East, as U.S. shale fades in importance.

However, geopolitical turmoil is already causing disruptions in major oil-producing countries in the Middle East, raising questions about the region’s ability to supply the global market in the long run.

The IEA has repeatedly warned that while U.S. shale has led to oversupply in the short run, shale output cannot meet future demand by itself. By the mid-2020s, especially because there are questions about the longevity of U.S. shale, there could be a much greater reliance on the Middle East, just as there was in the past.

However, according to the Oxford Institute for Energy Studies (OIES), the deteriorating geopolitical landscape in the Middle East could leave longstanding scars on the region’s energy sector.

Geopolitical threats are cropping up in various ways in the Middle East and North Africa. Formal institutions have been weakened, and in places like Libya, Yemen and Syria there is an absolute lack of legitimacy in government. Non-state actors have stepped into the void, such as Hezbollah, the Houthis, Libya Dawn, and others, according to OIES. These rivaling power centers make it tricky for oil companies and oilfield services to make investments.

As far as the oil market goes, these geopolitical problems are not obvious just yet. The glut of U.S. shale has inoculated the oil market from instability and unrest for the time being. Also, while there are plenty of sources of conflict and no shortage of potential threats, actual oil production outages have remained minimal. In fact, Iran ramped up production after the removal of international sanctions, while Libya, and Nigeria restored quite a bit of output after serious outages.

Nevertheless, geopolitical flashpoints are sowing the seeds of future supply problems, OIES argues. For instance, as tension bubbles, Middle Eastern governments are stepping up spending on security and defense, and the ballooning expenditures translate into higher revenue requirements. That means that a lot of key oil producers will need higher oil prices for their budgets to breakeven.

Moreover, geopolitical tension today is preventing the necessary investments in new production capacity. For example, while Iran was able to restore huge volumes of upstream production after the lifting of…
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The Truth Machine


The Truth Machine

Courtesy of 

Last night I had the honor of appearing on a discussion panel with my friend Paul Vigna as well as Cameron and Tyler Winkelvoss to talk about Bitcoin, the blockchain and “the future of everything.”

Paul, whom I’ve been friends with for almost ten years, is a veteran Wall Street Journal markets reporter who became the paper’s first full-time crypto beat writer last year as the whole digital assets thing took off. Last night’s event was for the launch of his new book ‘The Truth Machine‘, with co-author Michael Casey, about how the blockchain will transform society globally.

I had a few thoughts…

I am in awe of the guts it took for Tyler and Cameron to accumulate as much Bitcoin as they have and to stick to their guns through “25 bubbles and crashes” over the years. Yes, the price rise was fast last year, but this was not exactly easy money. You had to have vision back when this was just “a drug dealer thing” or “a toy” and then you needed intestinal fortitude through the Mt Gox episode and the thousands of rumors about government intervention all along the way. Bravo, boys.

The Winkelvii say that 2017 was only the year Wall Street discovered crypto, but 2018 will be the year they come in full-force. “Their armies have massed along the border, but they’re still outside…”

Joseph Lubin, one of the founders of the Ethereum network, also spoke on a panel. He’s one of the most important figures in the whole crypto story, given how instrumental he was in creating the application layer atop the base layer of ETH. His involvement in the crypto startup scene was elemental in bringing thousands (soon to be millions?) of software developers around to the possibilities of these new protocols. What’s cool about him is that he got interested in Satoshi’s white paper during the financial crisis and truly believes that decentralized apps / distributed ledgers will radically change the current “broken” system of trusted intermediaries that no longer deserve our trust. This includes the giant banks as well as the dominant social media companies.

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Phil's Favorites

Decoding the Fed


Decoding the Fed

Courtesy of John Mauldin, Thoughts from the Frontline

“In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

"There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effe...

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Zero Hedge

The Verdict Is In: "Negative Rates Are A Huge Negative For Savers, Low-Income People, And Investors"

Courtesy of ZeroHedge View original post here.

With the IMF's annual meeting now concluded, few topics discussed during the past week which saw the IMF downgrade its outlook for the global economy to the lowest GDP since the global financial crisis...

... evinced as powerful a response as negative interest rates, and for good reason: long seen as the last "red line" of central banks before they are forced to admit defeat, some $15 trillion in debt now trades w...

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Digital Currencies

Five hurdles blockchain faces to revolutionise banking


Five hurdles blockchain faces to revolutionise banking


Courtesy of Markos Zachariadis, Warwick Business School, University of Warwick

Blockchain is touted as the next step in the digital revolution, a technology that will change every industry from music to wast...

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Chart School

Gold Stocks Review

Courtesy of Read the Ticker

Gold stocks are swinging back forth between the range, and a break out swing higher is due. Gold stocks are holding a near perfect Wyckoff accumulation pattern. All should get ready to play this sector. Yet we must recognize that gold stocks are a one of the most crazy rides at the stock market fair, so play very carefully.

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GDX PnF chart from within the video

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Important channels around the HUI.

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The Technical Traders

Treasuries Pause Near Resistance Before The Next Rally

Courtesy of Technical Traders

Our research team believes the US Treasuries and the US Dollar will continue to strengthen over the next 2 to 6+ weeks as foreign market and emerging market credit and debt concerns outweigh any concerns originating from the US economy or political theater.  Overall, the major global economies will likely continue to see strength related to their currencies and debt instruments simply because the foreign market and emerging markets are dramatically more fragile than the more mature major global economies.

We believe the US Treasuries may surprise investors by rallying from current levels, near price resistance, to levels above $151 on the TLT chart. 

Our belief ...

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Insider Scoop

48 Biggest Movers From Yesterday

Courtesy of Benzinga

  • Hepion Pharmaceuticals, Inc. (NASDAQ: HEPA) shares climbed 43.2% to close at $3.58 on Thursday after the company announced the publication of a research article, "A Pan-Cyclophilin Inhibitor, CRV431, Decreases Fibrosis and Tumor Development in Chronic Liver Disease Models," in the peer-reviewed Journal of Pharmacology and Experimental Therapeutics.
  • Synthesis Energy Systems, Inc. (NASDAQ: SES) rose 26.9% to close at $9.20 after surging 12.24% on Wednesday.
  • Assembly Biosciences, Inc... more from Insider

Kimble Charting Solutions

Bank Index Breakout? Stock Market Bulls Sure Hope So

Courtesy of Chris Kimble

One of the most important sectors of the stock market is the banking industry and bank stocks.

When the banks are healthy, the economy is likely doing well. And when bank stocks are participating in a market rally, then it bodes well for the broader stock market.

In today’s chart, we look at the Bank Index (BKX).

As you can see, the banks have been in a falling channel for the past 20 months. As well, the banks have been lagging the broader market during this time as well – see the Ratio in the bottom half of the chart above.

That said, th...

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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 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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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

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.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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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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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.

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