Archive for the ‘Members’ Corner’ Category

Selling our Telecom position

John Hempton explains why he is selling Telecom. Does anyone have any thoughts on his thesis/broken thesis?

Selling our Telecom position

Courtesy of John Hempton, Bronte Capital

Several people on twitter and some in person have asked me for an update on my very bullish position on Verizon – especially since the results were not as good as expected last quarter.

I promised I would be forthcoming – but that I wanted to spell it out to our clients first. This is an extract from a client letter.

I want to start with the original bull thesis.

The original thesis

The original thesis came from watching Randall Stephenson (the CEO of AT&T) talk at a Milken Conference in 2012. The original recording is here. The relevant portion of the video starts at about minute 18.

Randall Stevenson tells a story of the iPhone’s introduction. The introduction of smart phones ran the company out of capacity in parts of country. [Apple offered the iPhone exclusively through AT&T in the USA.]

In New York the problems were intense. The complaint in New York was that the iPhone was a great phone so long as you accepted you could not use it as a phone. Jon Stewart mocked the coverage with unusual brutality on the Daily Show (link).

AT&T solved this by more and more capital expenditures. At the time, capex ran at around US$20 billion per annum. AT&T was – other than the government – the single biggest capital spending entity in the US.

Stephenson (speaking in 2012) said that the same problem would recur as usage continued to grow massively. But this time Stephenson argued it is different. He asserted that AT&T would not be able to solve this problem by more capital equipment. Spectrum congestion was inevitable.

He saw this as apocalyptic, but we saw potential pricing power and improving profitability.

We were doing simple arithmetic and getting very large numbers. Most Americans if given a choice between their pay-tv provider and their smart phone would choose the smart phone, but they currently pay more for their pay-TV.

We figured


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How Investors Get Tricked by Yield Products

It the article below, the "high-yield closed fund" that author Eric Newman constructs seems slightly like what a Bernie Madoff Fund might look like, before the investors started asking for their money back. 

How Investors Get Tricked by Yield Products

Courtesy of 

I want to send you over to Eric Newman’s shredding of a popular closed-end fund, which purportedly offers a 20%-plus yield to investors so that you can learn about one of the worst conventions of the investment biz. Eric is the CIO and partner of TFS Capital.

As rates rise (if they rise?) a lot of this type of thing will come back to haunt the investor class and the brokers who’ve been pitching it to people. It’s going to be ugly. You can protect yourself by understanding how the sausage is made.

It’s so good I won’t even excerpt. Just go:

Designing a bizarre Closed-End Fund (TFS Capital)





On the Climate Change Risk Management, the Paris Agreement & the Clean Power Plan

Concerned about global warming? Send your thoughts to the EPA and tell Trump that you support the Clean Power Plan.

Submit your comments, identified by Docket ID No. EPA-HQ-OA-2017-0190 at http://www.regulations.gov

From the U.S. Federal Register website: In accordance with Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” EPA is seeking input on regulations that may be appropriate for repeal, replacement, or modification. Comments must be received on or before May 15, 2017.

(See also Previous comments"TIPS for effective comments." Proposed EPA cuts. Commentary on Trump's dangerous climate Executive Order.)

To learn more about climate change risk management and the Paris Agreement, watch this discussion by Dr. Jan Dash. Jan Dash is author of Quantitative Finance and Risk Management, A Physicist's Approach and over 60 scientific papers. He is also the Managing Editor for the Climate Portal.  

Resources

The Climate Portal has a variety of resources and links for business and climate change. Business, spurred by investors, is waking up to the material risks of climate change. The transition to the huge opportunity of the distributed energy economy is underway. This will mitigate the worst impacts of climate change, if done with all deliberate speed. The future of our grandchildren depends on the success of the renewables transition.  The good news is that the renewables train has left the station. The climate contrarians/deniers may try, but they cannot stop it. Have a look. ~ Jan

Business and Climate Change (main page)

Climate Economics

Carbon Finance 

Non-fossil Renewable Energy 

Articles

News Log

****

Paris Agreement

The Paris Agreement (French: Accord de Paris) is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gases emissions mitigation, adaptation and finance starting in the year 2020. The language of the agreement was negotiated by representatives of 195 countries at the 21st Conference of the Parties of the UNFCCC in…
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Should I buy that stock?

Courtesy of Phil Stasukaitis (pstas)

I was asked by my local investment club to do a presentation on "how to buy a stock?" As I pondered the question, I began by noting all the elements that I monitor regularly and which come in to play as part of my decision process. As the group is comprised novices to experts, I tried to gear my discussion to cover both basics and more advanced concepts.

Four Part Discussion

  1. Macro Economic Indicators
  2. Market Indexes
  3. Fundamental Analysis
  4. Technical Analysis

1. Macro Economic Indicators

We'll start with reviewing some basic concepts and measurements that have direct effects on the stock market. 

A. Gross Domestic Product (GDP)

Data source: Dept. of Commerce/Bureau of Economic Research (https://www.bea.gov/index.htm)

Total market value of US produced goods and services – $18 Trillion.

GDP measures total US economic activity. Positive numbers indicate expansion; negative numbers indicate contraction, i.e., recession. In the past, there usually have been accelerated expansions coming out of recessions. That has not been the case since the Great Recession. 2% annual GDP growth, plus or minus, appears to be the new normal.

The GDP and change in GDP are "lagging" indicators meaning they tells us where we have been. Where the economy is headed falls to GDP forecasts which are regularly issued from various sources.

B. Consumer Price Index (CPI)

The CPI is used to measure inflation. The CPI measures changes in the prices paid by urban consumers for representative basket of goods and services. Latest report on the last 12 months gave a CPI reading of +2.5%. The Federal Reserve uses a different inflation measure, Personal Consumption Expenditures (PCE). CPI is based on a survey of what households are buying; PCE is based on surveys of what businesses are selling. Both measures break out "headline" and "core" numbers. Core numbers strip out housing and energy which tend to be more volatile month to month.

Source: Bureau of Labor Statistics- US Dept. of Labor https://www.bls.gov/

C. 10-Year Treasury Note

The Ten Year Treasury is often used as…
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Bombing – Right or Wrong?

Courtesy of Jean-Luc

I am telling you Angel – makes no sense… BTW:

Republicans Love Bombing, But Only When a Republican Does It

By Kevin Drum, Mother Jones

A few days ago I noted that Republican views of the economy changed dramatically when Donald Trump was elected, but Democratic views stayed pretty stable. Apparently Republicans view the economy through a partisan lens but Democrats don't.

Are there other examples of this? Yes indeed. Jeff Stein points to polling data about air strikes against Syria:

Democrats are about as supportive of the strikes as they were under Obama, with 38 percent backing them in 2013 and 37 percent agreeing with them now, according to the Washington Post. Now 86 percent of Republican voters back the strikes, compared with the just 22 percent who did so in 2013.

This is a pretty stunning difference. Democratic views stayed solidly negative regardless of who was president. But Republican approval rates skyrocketed from 22 percent to 86 percent when Trump became president. This despite the fact that Bashar al-Assad's use of chemical weapons was more extensive in 2013 than it was this year…  more >

I mean WTF – because you have a GOP president, strikes are now OK. Liberals a bit more consistent there.

***

SJL, "WTF" is a common (but not highly regarded) form of philosophical reasoning. Instead of looking at the outcome of an action, or examining whether the act itself is right or wrong, this less logical approach considers whether the actor is a republican or a democrat to determine whether the act is right or wrong. ~ Ilene





CAR-T & CRISPR – the Future is Now

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

PSW Members….it has been a while since my last post, but since many have all been on the board following the chat, it is time for a scientific lesson in a few of the companies we are long.  In addition, another revolution is coming in the medical field, and it will be touched upon as well.

CAR-T – stands for Chimeric antigen receptors (CARs) and the T is for T-cell.  

From the picture above, T-cells are one cell type of our immune system that fight off infection as well as they are one player at keeping rogue cells from becoming cancerous. Unfortunately, cancer somehow evades the immune system and so it begins.

CAR-T came along in the late1980s via a brilliant scientist, Zelig Eshhar, an Israeli immunologist at the Weizmann Institue of Science.  The basic steps are noted below in picture.  The insertion of different 'components' and the way the replication of the protein happens (Step 2; Step 2 subitem 4) yields the clinical variations that are competing in this area by the companies.    

KITE, JUNO and Novartis all have CD19 directed CAR-T technologies.  CD19 was attractive as a CAR-based target therapy because most B-cell leukemias and lymphomas express it, but normal tissue other than the B cell lineage do not.   The companies therefore have focused on CD19 first, and there are subtle difference in the way the T-cells are made.

Any modification of the immune system comes with risk, and CAR-T was no exception.  Even thought the CAR-T was hailed as a wonder treatment due to is successes in blood born cancer, it also caused some complications.  Last year, JUNO hit the wall with their lead, as it caused severe cerebral edema – cytokine storm??  This caused all the CAR-Ts to be evaluated, but in the end, only JUNO's lead was halted. Companies are continually making progress on the CAR-T front, and BLCM seems to be on the cusp of one way to get around a side effect.  

BLCM also has a CD19 directed CAR-T program, with a twist that…
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Natterings from the Naybob

Courtesy of The Nattering Naybob

[Click on titles for full articles.]

The American Dream: An Endangered Ethos?

At Danielle DiMartino Booth's The American Dream: An Endangered Ethos -

"It has been a dream of being able to grow to fullest development as man and woman, unhampered by the barriers which had slowly been erected in the older civilizations, unrepressed by social orders which had developed for the benefit of classes rather than for the simple human being of any and every class."  No more elegant words were ever written to ensure our ethos would never be endangered. And yet it is at risk of extinction today. It is high time we stand up for what is rightly ours and take back the American Dream for one and for all."

Ever excellent and mental viagra. Musing… Life, liberty and the pursuit of happiness. Homes are sticks and bricks where people live their lives and raise families. All have the right to earn that dream which should not be denied by greedy serial flippers or serial landlords.

Our Corporate Anthem?

Once again, not to be mistaken for Tuesdays With Morrie, it's time for Tuesdays With Trump. Over at Philstockworld… High Finance for Real People – Fun and Profits… 

Muck – "As long as we allow corporations to buy congress critters we will get more of the same."

We Natter… Sixty-nine of the world’s 100 top economic entities are now corporations instead of countries. Juristic person hood could be the biggest sham ever perpetrated on an unsuspecting and naive public. SCOTUS holding that spending money is in any way related to the core of freedom of expression, is of dubious moral character, but it gets far worse my fiends, er friends…
 

 

 

Are You Credentialed?

StJL – Ackman's Pain – "So out of a $4.6 billion investment, Pershing Square got back about $874 million."

We Nattered… Proving that even so called accredited "experts" can get drunk on their own punch bowl. We covered Ackman's bankrupt investment philosophy and felonious folly in Platform Value: The Fall?  Along those lines, re my latest, A Quick


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More Natterings

Courtesy of The Nattering Naybob

[Click on the titles for the full articles.]

A Quick $20 Trick?

Summary

Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:

  • Last time out, Sinbad The Sailor, QuickLogic.
  • GlobalFoundries, Jha, Smartron and cricket.
  • Quick money, fungible, demographics, QUIK focus.

Last Time Out

Monetary policy is just one form of policy that effects capital, investment, jobs, wages, spending, asset bubbles and your standard of living. When any policy decision is based in false doctrine, you get distortions which can affect every facet of life. - The President's Analyst?

Weak productivity is symptomatic of a much larger problem. As for the illusion of rising wages, meaningful wage increases have not occurred in decades. The proof in that pudding can be found in one chart where both personal income and spending growth are in a steady 36 YEAR downtrend. - Mary Tyler Moore?

Due to monetary policy effects, some might be attempting to make up the difference between their wages and the cost of living. In chasing that elusive bag and buried market treasure, our theme for tonight's missive turns to a legendary character in an apropos plot…


 

Straighten Up and Fly Right?

Once again, not to be mistaken for Tuesday's With Morrie, it's time for Tuesdays With Trump… 

POTUS Trump’s budget blueprint comes as a surprise. Amid an 18 percent cut to the Department of Health and Human Services — including one-fifth of the National Institutes of Health’s budget — the administration has said it will prioritize funding for important anti-HIV activities. On the domestic front, the budget calls funding for Ryan White HIV/AIDS providers — a “high priority” it wants to continue.  - VOX

Trump's Vice President Mike Pence is familiar with the programs. From Pence's 2000 website, The Pence Agenda for the 107th Congress: A Guide to Renewing the American Dream:

"Congress should support the reauthorization of the Ryan White Care Act only after completion of an audit to ensure that federal dollars were no longer being given to organizations that celebrate and encourage the


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Natterings

Check out some new posts from our friend The Nattering Naybob. 

The Big Lebowski Sequel?

Taking a "resp-shit" or "potty break" from "in the Toilet Thursday" or "Thursday's in the Loo"… One of our favorite scenes from the 1998 cult classic The Big Lebowski, the ash can scene where Walter Subchak (John Goodman) eulogizes the departed Donnie (Steve Buscemi) with Jeffrey Lebowski (Jeff Bridges) looking on.

Keep reading: The Big Lebowski Sequel?

 

Captain Queeg?

Continuing on from Old Yellow Stains?, we muse in retrospect…  The troll known as DKS showed up with his own acolyte or Sancho Panza, another ass clown albeit whose asshattery was not as vile but equally inane. But here is the real kicker… I KNEW the DKS screen moniker rang a bell, went digging and found below in my SA PM Inbox…

Keep reading: Captain Queeg?

 


Summary

  • Discussion, critique and analysis of the potential impacts on equity, bond, commodity, capital and asset markets regarding the following:
  • Last time out, Sinbad The Sailor, QuickLogic.
  • GlobalFoundries, Jha, Smartron and cricket.
  • Quick money, fungible, demographics, QUIK focus.

 

Last Time Out

Monetary policy is just one form of policy that effects capital, investment, jobs, wages, spending, asset bubbles and your standard of living. When any policy decision is based in false doctrine, you get distortions which can affect every facet of life. - The President's Analyst?

Weak productivity is symptomatic of a much larger problem. As for the illusion of rising wages, meaningful wage increases have not occurred in decades. The proof in that pudding can be found in one chart where both personal income and spending growth are in a steady 36 YEAR downtrend. - Mary Tyler Moore?

More here >

 





The Armchair Trader

 

The Armchair Trader

Updated 3-15-17

Courtesy of Yodi

As I've noted in my comments, I am looking for monthly and quarterly income. In contrast to the future traders on our board, I'm not looking at the progress of success every minute. With the armchair, Trader you can sit back and look at your progress once a month, while you follow your job and do other things.

In my examples below I have chosen a variety of stocks from REITs to banks and commercial companies. Regretfully in today’s market it can be hard to select stocks, mainly because so many are trading at the higher end of the scale, especially as we are facing rate hikes and market uncertainty. Phil is warning on a daily basis that the Trump balloon will pop.

Taking this in to consideration, make sure you are happy with any stock you chose and don't blindly follow my footsteps!

It is the object of this exercise to have a steady monthly income. I combine the stock dividend together with further out option plays. The option plays mainly consist of a call/put strangles or straddles. I also sometimes sell a covered call against a stock I'm holding, however using only calls reduces the monthly income accordingly.

With my trades, I'm looking for a combined monthly return on investment of 1.5 to 2% per month. If I invested $100,000, I'd be looking for a return of around $2,000 per month.

Each example below is based on 100 shares of stocks plus 1 option strangle or straddle (1 call and 1 put).

****

Ashford Hospitality Trust, Inc.'s (AHT) was $6.23 at the close on 3-15. It's paying $0.12 cents quarterly or 7.7% per annum. That's a return of 0.64% per month.

Selling a Sept 5/7.5 put/call strangle @ $0.50 yields a return of 1.3% per month.

The combined monthly return (dividend plus premium) is 1.95%.

****

ARMOUR Residential REIT, Inc. (ARR) was $21.75 on 3-15. It's yielding a 10.42% annual return, or $0.19 or 0.87% per month.

Selling an Oct 20/22.5 p/c strangle @ $1.40 yields a return of 0.86% per month.

The combined monthly income would be 1.73%.

***

Chimera Investment
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Phil's Favorites

Phil on MoneyTalk

 

MoneyTalk: Why markets aren't rattled by Trump's troubles

President Donald Trump has stirred up controversy around the world after meeting with NATO allies and Russia's Vladimir Putin. Yet, U.S. markets are still not far off their record highs. Phil Davis, options strategist and founder of philstockworld.com weighs in on how he's playing the market with options.

[In the next clip], Phil Davis discusses his trade strategy and how options can be used in the current market conditions.

...

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Zero Hedge

California Supreme Court Blocks Proposal To Split Up State From November Ballot

Courtesy of ZeroHedge. View original post here.

The California Supreme Court has shot down a measure that would have allowed Californians to vote on whether the state should be divided into three smaller states, dealing a serious setback to Venture Capitalist (and Elizabeth Holmes superfan) Tim Draper, who has insisted that the state is "ungovernable" in its current form and spearheaded a campaign to split it up.

The Court on Wednesday sided with an environmental group that had challenged the ballot measure, arguing that the reforms demanded by the ballot measure were "...



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Insider Scoop

Comcast Ends Pursuit Of Fox Assets, Will Focus On Sky

Courtesy of Benzinga.

Related CMCSA 'Convergence' Is Key: Credit Suisse Weighs In On The Telecom And Media Sector Raymond James: AT&T To Suffer Extend...

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

Digital Currencies

Citadel CEO Says Bitcoin Still A "Head Scratcher" But Billionaire Lasry Sees $40,000 Soon

Courtesy of ZeroHedge. View original post here.

Ken Griffin, the CEO and founder of the Citadel hedge fund, has reiterated his negative stance on Bitcoin (BTC) in an interview with CNBC this morning.

Speaking at the Delivering Alpha Conference in New York, ...



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Chart School

S&P Firms Breakout As Tech Keep The Pressure On

Courtesy of Declan.

Given overnight news and Netflix disappointment I was surprised to see markets finish as strong as they did given comments on the economy by the Fed Chairman.

The S&P opened at support and 'engulfed' the prior day's trading; it's not a true bullish engulfing pattern as this is a reversal pattern and what we have is a breakout but it does contribute to a confirmation of the breakout.


The Dow Jones is inching towards channel resistance. In the context of other indices, it was a low key day...

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Biotech

How summer and diet damage your DNA, and what you can do

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

 

How summer and diet damage your DNA, and what you can do

Bright sun and fatty foods are a bad recipe for your DNA. By Tish1/shutterstock.com

Courtesy of Adam Barsouk, University of Pittsburgh

Today, your body will accumulate quadrillions of new injuries in your DNA. The constant onslaught of many forms of damage, some of which permanently...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



more from Kimble C.S.

Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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 ...



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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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All About Trends

Mid-Day Update

Reminder: Harlan 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...

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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...

Learn more About Phil >>


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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.

Market Shadows >>