Archive for the ‘Appears on main page’ Category

What I Learned at Camp Kotok

 

What I Learned at Camp Kotok

Courtesy of John Mauldin, Thoughts from the Frontline


Photo: David Kotok

I am back from my 14th annual Maine fishing camp and the mood was decidedly different this year. The private event at Leen’s Lodge is generally called Camp Kotok in honor of David Kotok of Cumberland Advisors who started these outings many years ago. CNBC and others began calling it the “Shadow Fed” but it is really just a meeting of wickedly smart people focused on economics and markets. (I am allowed to attend for comic relief.) Throw in a little fishing, more fabulous food and wine than anyone should consume, formal debates and informal Q&A, and it really is one of the highlights of my year.

All this happens at a fishing lodge without many luxuries except for the food which is off the charts in the evenings. For lunch, all the boats meet at one spot and the guides cook what we catch in a 2+ hour experience. (Only the hardcore go out fishing afterwards.) The lunch conversations are simply fascinating.

I am still absorbing what I learned, but for me the general mood stood out more. We will get to that below. First, a point of personal privilege.

I first started writing Thoughts from the Frontline in August 2000. That makes this the beginning of my 20th year. I started with 2,000 email addresses from an earlier writing incarnation. I was still writing a print publication which I sold through the mail and thought I would just stick my letter on the internet for free and see what happened. Within two years I had canceled the print letter as the free publication’s growth went through the roof. Even now, I meet people all the time who say they read it from the beginning (or shortly thereafter).

Words cannot express my genuine gratitude that so many of you have read these letters for so long and continue doing so. Simply saying “thank you” doesn’t adequately express how truly, profoundly thankful I am you give me the single most important part of your life—your attention—when we are all so inundated with emails, TV,


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Everybody Knows Everything

 

Everybody Knows Everything

Courtesy of 

My wife sent me the following text message this morning:

“There is a whole thread about this in a NYC DOE teacher Facebook group I’m in.” The text was followed by the image below.

 

A TDA, or tax-deferred annuity, is a 403(b), which is the equivalent of a 401(k) for teachers, hospital workers, and other not-for-profit organizations.

 

Emotion was running high in this thread. Some people were blaming the economy and other people blaming the media. But they all pretty much had the same question, “what do we do now?” The answers were all over the place, as you might imagine.

Josh wrote the best post on how to think about investing in your retirement accounts, which I would encourage everybody to read if you haven’t already. He said, “volatility is not risk, it is the source of future returns.” Amen brother.

The real question isn’t what should they do in their retirement accounts, but rather why they’re talking about the stock market and the warning it gave for an impending recession.

The simple answer is that news travels faster today than it has at any point in history. I will show you the evidence in two charts.

Below is the yield curve in black, with the red dots representing every time The New York Times mentioned yield curve and “inversion” or “inverted” in an article. You can see that the yield curve, despite a steep inversion in the late 70s and early 80s, wasn’t something that the media, and therefore investors, were so fixated on.


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TGIF – The ECB Takes a Turn at the Stimulus Wheel

Image result for ecb stimulusMore free money!  

That's what's got the markets rebounding this morning as the European Central Bank says they are preparing a "very strong package" of stimulus measures for its next policy meeting in September.  Speaking in his offices in Finland’s capital on Thursday, Olli Rehn said the slowing global economy would see the ECB rolling out fresh stimulus measures that should include “substantial and sufficient” bond purchases as well as cuts to the bank’s key interest rate.

“It’s important that we come up with a significant and impactful policy package in September.  When you’re working with financial markets, it’s often better to overshoot than undershoot, and better to have a very strong package of policy measures than to tinker.”   

ECB President Mario Draghi last month raised the prospect of fresh ECB action in September, but the new comments from Mr. Rehn indicate that the level of stimulus is likely to be at the upper end of analysts’ expectations.  By raising market expectations for the ECB’s September meeting, Mr Rehn’s comments could put pressure on any ECB policy makers critical of a large stimulus package to fall into line.

In my view, there is a certain weakening of the economic outlook for Europe in the last couple of months,” Mr. Rehn said. That worsening economic backdrop “justifies taking further action in monetary policy, as we intend to do in September,” Mr. Rehn said.  Investors are now expecting the ECB to cut their rate to MINUS 0.7% and keep them that low through 2024.  Additionally, the ECB is expected to expand it's already massive bond-buying program – all very bullish for the market but it brings to mind the phrase "desperate times call for desperate measures." 

As we expected, the Central Banksters are teriffied…
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The PhilStockWorld.com Weekly Trading Webinar – 08-14-19

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here.

Major Topics:

00:01:38 Checking on the Markets
00:06:12 SPWR
00:09:37 WPM
00:13:41 Metals: Silver and Gold
00:19:28 SPY
00:39:43 Trade Ideas
00:50:38 MO
01:02:05 Hemp Boca Portfolio
01:06:53 TAP
01:17:01 M Trade Ideas
01:22:24 Market Charts
01:25:12 EIA
01:35:48 Dow
01:38:56 A few pointers before wrap-up
01:42:15 Nikkei

Phil's Weekly Trading Webinars provide a great opportunity to learn what we do at PSW. Subscribe to our YouTube channel and view past webinars here. For LIVE access to PSW's Weekly Webinars – demonstrating trading strategies in real time – click here to join us at PSW!





Thrilling Thursday – Markets Yanked Around by Every Rumor

Wheeee!  What fun!  

At the moment, the Dow (/YM) Futures are up 200 points after being down over 100 points.  The downturn was caused by China threatening to escalate the trade war (yet again), with the Minister of Finance saying that China "would take necessary countermeasures" against any new US tariffs and said the new tariffs "seriously violated the consensus" that Trump and Xi has come to at the G20 meeting.   China meanwhile injected $2.4Bn of stimulus into Hong Kong and then said that Trump and Xi were engaging in phone meetings – flipping the Futures back up.

WalMart (WMT) had good earnings and positive guidance this morning and they are adding 50 points to the Dow by themselves with a 6% gain pre-market but I seem to remember WMT doing well in the last recession as more and more middle-class shoppers looked to cut costs so I'm not sure if what they see as a positive trend is really a positive for the US economy.

Meanwhile, remember that big blue line we drew on the S&P chart two weeks ago with bounce lines predicting the future action of the index?  Well we're still there:

We discussed the 5% Rule in yesterday's Live Trading Webinar as well as our hedges and, at the time, we decided not to get more aggressively bearish, despite the TERRIBLE DAY the market had yesterday, as we are pretty well-balanced and the situation is extremely difficult to predict – so why bet bearish when we are comfortably neutral?  2,880 is the weak bounce line on the S&P Futures (/ES) and we failed that so my note to our Members after the Webinar reflected what I said at its close:

So ugly.  Failed the weak bounces, looks like we're on the way to 2,700 (10% total corrections).

25,500, 2,850, 7,500 and 1,465 are the lines to watch, shorting the laggard if 2 go below and out if any get back above after that


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Ranking The Top 100 Websites In The World

Courtesy of VisualCapitalist's Nick Routley

As a greater portion of the world begins to live more of their life online, the world’s top 100 websites continue to see explosive growth in their traffic numbers.

To claim even the 100th spot in this ranking, your website would need around 350 million visits in a single month. Using data from SimilarWeb, we’ve visually mapped out the top 100 biggest websites on the internet. Examining the ranking reveals a lot about how people around the world search for information, which services they use, and how they spend time online.

Note: This is a ranking of biggest websites, specifically. Brands that extend across platforms or serve the majority of their users through an app will not necessarily rank well on this list. As a result, you’ll notice the absence of companies like WeChat and Snapchat.

The Top 100 Websites

The 100 biggest websites generated a staggering 206 billion visits in June 2019. Google, YouTube, and Facebook took the top spots, followed by Baidu and Wikipedia. Below is the ranking [from 1 to 20]:

[click here for the full list]

Search Reigns Supreme

Search engines provide the connective tissue that binds the internet together, and they accounted for the majority of website traffic in the top 100 ranking.

Google is the undisputed top website in nearly every country in the world. In fact, Alphabet’s 11 domains in the top 100 ranking – including YouTube and a number of international versions of Google – racked up an impressive 90 billion visits in a single month.

Exceptions to Google’s dominance can be found in China (Baidu) and Russia (Yandex), where homegrown search engines have managed to capture the domestic market.

One scrappy competitor, DuckDuckGo, is slowly gaining prominence as an alternative to Google. The search engine’s focus on user privacy appears to be resonating with internet users as the site’s traffic has surpassed 500 million visits


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Which Way Wednesday – Recession Worries

Now, where was I?

Before we were so rudely interrupted by yesterday's "rally," I was pointing out how there are simply too many macro fears to shrug off and get bullish.  Despite the 70-point S&P stick on China "news" that we'd be having a phone call with them in September, I remained skeptical and we took advantage of the rally to begin closing out some long positions in our Options Opportunity Portfolio, turning it a lot more bearish.  I had, in fact, said to our Members right at 9:56 am, in our Live Member Chat Room:

LOL, what a rocket on China Trade news!  How silly…

So hard to take this market seriously when it goes up and down 5% based on whether or not we're going to speak to China on the phone in 2 weeks.  It's like High School!

The market has, indeed, turned into more of a popularity contest than a true measure of economic activity.  The Administration has learned how they can talk the market up or down at will but, as we just saw yesterday – it's a short-lived thing when there's no meat on the bone to back up their statements.  Tartiffs are only delayed until Dec 15th after massive blowback on Trump's announcement last week and the "phone call" to China was nothing more than a face-saving attempt by the Administration so Trump could avoid saying he screwed up and misjudged how badly the market would take new tariff announcements.

Image result for trump report card cartoonThe delayed tariff date will also boost orders into the holidays and give us a better Q4 than we probably would have had as people rush to beat the tariffs with their orders.  That's something that will blow back on us next year, but Trump won't have to run on next year's GDP as it won't be over by the election so this year is his "report card" and, like his school career – the President is willing to cheat to get a C.  

The…
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The Game Has Changed

 

The Game Has Changed

Courtesy of 

2019 has not been kind to a certain segment of the brick and mortar retailer. Neither was 2018, 2017, or 2016.

Not even five years ago, Bed Bath & Beyond was at $80 a share. Today it sits just above $8. A similar story has come to pass in JC Penney and Macy’s, with a few others not far behind.

In a recent Barron’s article, The Retail Reckoning Has Just Begun, they identified one of the main drivers of their demise. Simply put, there is too much supply.

The chart below shows the amount of retail space per person in the United States versus other developed nations.

Making matters worse, people aren’t going to the stores in the same way that they’re no longer going to the movie theater. On top of that, there’s Amazon, and the latest giant, Instagram. Facebook, is coming for the retailers too, and it’s a full on assault.

Yesterday I was scrolling through my Instagram feed when I noticed a little button on Kylie Jenner’s picture that said “View Products.” (Oh stop it, she has 143 million other followers). I clicked on the button to see its utility, which you can see on the right side of the image below.

Facebook is not playing around. They’ve basically turned Instagram into your personal shopper. Over the last six to twelve months, most of the clothing I bought was on Instagram, which is something I never thought I’d say.

I wouldn’t want to be a CEO at these struggling companies trying to figure out how to turn this thing around, and I really feel for the people working there. The game has changed and it’s going to be really challenging for the incumbents to figure out how to play by the new rules.





Tumblin’ Tuesday – Back to 2,880 Again

A bit of a roller-coaster, right?

Since we posted this chart last week, we've been right in the range predicted by our 5% Rule™ and, unfortunately, that means we're likely to test 2,850 again and likely to fail it on the way down to 2,700 at the moment, we can blame escalating trade tensions between the US and China or, as noted yesterday, the Hong Kong protests which Cramer now says are serious (since reading my report) and, of course, yesterday, the Argentine Stock Market fell 48% in a single day – something that's got to make investors in the Developed World Markets reconsider the lofty valuations they are paying for stocks in countries run by tyrants-in-training.

I have been warning people to stay away from Argentina since 2013, when the index first spiked up to ridiculous levels and we had a correction but then spiked to even more ridiculous levels but now Argentina has given up all those gains and more and it's still a stay-away country with a President who lost an election and refuses to leave office (shades of futures past for the US?) and a bond market that's showing a 72% chance of default within 5 years – 50% higher than the chances were on Friday.

And this is why we told you to stay far away from 100-year bonds:

Meanwhile, Argentina is only one of many things on the Global Radar we should be paying attention to and, quite simply, when there are a lot of macro issues to be worried about – we should be a lot less willing to pay higher forward multiples for stocks – in case one of those issues becomes a bigger problem than it is now.

ImageAs you know, the bond market is already pricing in a Recession with the inverted Yield Curve, Germany and South Korea are both very close to recessions already, with almost no growth in the first half and Global Industrial Production and Manufacturing is also very near the contraction line below 50.  Trade Growth is, of course, negative and not looking like it's going
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The Quote of the Decade

 

The Quote of the Decade

Courtesy of 

Howard Marks recently said “The process of lowering rates causes assets to inflate. There will be more wealth piled up by the people who have assets and it’ll be harder for people who just have a little bit of savings to make a return.”

Marks is hardly alone in this line of thinking. “The Fed is punishing savers” is one of the most commonly used financial quotes of the last decade. And while there might be elements of truth to this, I think there’s more to the story.

There are a lot of problems in this world, but the idea that savers are being robbed by lower interest rates, in my opinion, is not one of them. Here’s why:

  • Why should people be entitled to reward with no risk?
  • What’s so great about high interest rates? Be careful what you wish for.
  • Low rates are bad for risk-free investors, but they’re good for consumers.
  • Who are these “savers” everyone keeps talking about anyway?

Why should you get reward with no risk?

You are owed nothing. This goes for investors who take risk in the stock market, and it goes doubly for people who don’t take much risk at all.

If you were able to stomach a moderate amount of risk, say in a 50/50 portfolio for example, you would have earned 8.5% a year since 2010. Low interest rates didn’t punish savers, avoiding risk did it for them.*

What’s so great about high interest rates? Be careful what you wish for.

Interest rates rose from the end of World War II through the end of the 1970s, and have been on the decline ever since.

It’s understandable why investors yearn for the days double digit interest rates. But you have to consider the type of environment that could breed such a high cost of money. It’s great that the government used to pay you 15% to lend them money for two years, but what the government


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Kimble Charting Solutions

Bearish Divergences Similar To 2000 & 2007 In Play Again!

Courtesy of Chris Kimble

Does history at important junctures ever repeat itself exactly? Nope

Do look-alike patterns take place at important price points? Yup

This chart looks at the S&P 500 over the past 20-years.

In 2000 and 2007 bearish momentum divergences took place months ahead of the actual peak in stocks.

Currently, momentum has created a bearish divergence to the S&P 500 for the past 20-months, as the seems to have stopped on a dime at its 261% Fibonacci extension level of the 2007 highs/2009 lows.

Joe Friday Just The Fact Ma’am; A negative sign for the S&P 500 with the divergence in play, would take place if support b...



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Zero Hedge

Libra Members Consider Quitting Project Due To Gov't Pressure: Report

Courtesy of ZeroHedge View original post here.

Authored by Marie Huillet via CoinTelegraph.com,

At least three of Facebook’s early backers for its planned Libra stablecoin launch are considering withdrawing their support in light of the fierce regulatory pushback.

...



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Phil's Favorites

The PhilStockWorld.com Weekly Webinar - 08-21-19

 

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here.

Major Topics:

  • 00:01:28 - Checking on the Markets
  • 00:11:52 - TSLA vs. Walmart
  • 00:18:07 - Spitting Cobra Pattern
  • 00:22:00 - M & THC
  • 00:33:37 - IBM
  • 00:40:42 - Climate Change Miami
  • 00:42:28 - Greenland Ice Melt
  • 00:46:28 - Futures
  • 00:51:02 - Jobs created thru Trump Administration
  • 00:53:40 - U.S. Population Growth by Year
  • 01:00:00 - FED Minutes
  • 01:09:08 - Global Warming
  • 01:16:37 - LTP Review
  • 01:19:20 - STP ...


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The Technical Traders

Do Good Traders Make Good Gamblers?

Courtesy of Technical Traders

Without breaking the rules, have you ever made a trade that was guaranteed to make you money? A trade that was literally guaranteed to succeed.

If you’re struggling to come up with an answer, we’ll give you a helping hand, the word you’re searching for is likely no. Every financial trade ever made – no matter how sound and well researched using technical analysis – carries with it an element of risk.

Outside factors beyond your control always have the possibility of turning profits into losses and ecstasy into agony. In many ways, trading is similar to gambling. For instance, you may think you know ...



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Insider Scoop

Earnings Scheduled For August 22, 2019

Courtesy of Benzinga

Companies Reporting Before The Bell
  • Hormel Foods Corporation (NYSE: HRL) is estimated to report quarterly earnings at $0.36 per share on revenue of $2.29 billion.
  • BJ's Wholesale Club Holdings, Inc. (NYSE: BJ) is projected to report quarterly earnings at $0.37 per share on revenue of $3.38 billion.
  • DICK'S Sporting Good...


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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker

Everything awesome? Gold over $1500. Central banks are printing money to generate fake demand. Germany issues first ever 30 year bond with negative interest rate. Crazy times!

Even Australia and New Zealand and considering negative interest rates and printing money, you know a bunch of lowly populated islands in the South Pacific with no aircraft carriers or nuclear weapons. They will need to do this to suppress their currency as they are export nations, as they need foreign currency to pay for foreign loans. But what is next, maybe Fiji will start printing their dollar. 

Now for a laugh, this Jason Pollock sold for more than $32M in 2012. 





Ok, now call Dan...

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Lee's Free Thinking

Watch Out Bears! Fed POMO Is Back!

Courtesy of Lee Adler

That’s right. The Fed is doing POMO again.  POMO means Permanent Open Market Operations. It’s a fancy way of saying that the Fed is buying Treasuries, pumping money into the financial markets.

Over the past 6 days, the Fed has bought $8.6 billion in T-bills and coupons. These are the first regular Fed POMO Treasury operations since the Fed ended outright QE in 2014.

Who is the Fed buying those Treasuries from?

The Primary Dealers. Who are the Primary Dealers?  I’ll let the New York Fed tell you:

Primary dealers are trading counterparties of the New York Fed in its implementation of monetary policy. They are also expected to make markets for the New York Fed on behalf of its official accountholders as needed, and to bid on a ...



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Digital Currencies

New Zealand Becomes 1st Country To Legalize Payment Of Salaries In Crypto

Courtesy of ZeroHedge View original post here.

Bitcoin and other cryptocurrencies have been on a persistent upswing this year, but they're still pretty volatile. But during a time when even some of the most developed economies in the word are watching their currencies bounce around like the Argentine peso (just take a look at a six-month chart for GBPUSD), New Zealand has decided to take the plunge and become the first country to legalize payment in bitcoin, the FT reports.

The ruling by New Zealand’s tax authority allows salaries and wages to b...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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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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Promotions

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...

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 >>