Archive for the ‘Immediately available to public’ Category

The FAANMG Capex And R&D Budget Is Rapidly US Government Defense Spending

Courtesy of ZeroHedge View original post here.

Authored by Adam Virgadamo, Morgan Stanley equity strategist

Wrapping up our annual gathering this past week, three common themes across regions and sectors stood out. As 2020 unfolds, we’ll have more to say on these topics, but in the meantime, here are the broad outlines of our dialogue.

Disruption: Few themes are as evergreen as identifying disruptors and the disrupted, so it was no surprise that we spent much of our day on the subject. Our ideas around the poster children for disruption – e-commerce and the retail industry – came full circle as our retail teams argued that traditional retailers need to disrupt themselves, innovating in order to reinvent their cost structures. Innovation isn’t just driving down costs, but also transforming the way businesses grow – e.g., using digital technologies to scale up, it’s taken upstart Luckin Coffee just two years to match the store count that Starbucks needed 20 years to build in China. We also discussed the hype around 5G, the opportunities it may bring in an increasingly urbanized and data-centric world, and its limitations in transforming manufacturing processes (where investors may need to wait for 6G). And since no discussion of disruption would be complete without addressing the proliferation of the public cloud, we debated the ultimate size of the addressable market and growing risks that not only tech hardware companies but also software firms could see increased disintermediation from the cloud platforms themselves.

Spheres of influence: The new theme this year was the movement of the US and China away from integration. The idea of diverging spheres of influence – separate universes of economic activity, technological standards and political influence – came up again and again. Intensifying competition for technological leadership, as well as limited market access for companies seen as too closely aligned with one side or the other, will affect fundamentals and multiples. Long term, identifying exposure to these trends will create alpha. For example, we think that China’s buildout of a semiconductor industry is likely to have meaningful implications for US and European players. Whether it’s in big data and AI, payment & networking standards, innovation in biotech, consumer products or social networks, the theme of US-China divergence is bound to be relevant. This new reality also raises the

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Hedge Fund CIO: “If Biden Somehow Gets The Nomination This Time, Progressives Will Go Berserk”

Courtesy of ZeroHedge View original post here.

Submitted by Eric Peters, CIO of One River Asset Management


“First they needed some high-profile endorsements,” said the CIO. “Then they needed to win a couple early primaries,” he continued. “Only then could they raise the big corporate money to fund a campaign.” Few candidates could make it, they’d drop out early, narrowing the field by the end of March. “Now candidates raise money online. And the timeline has accelerated so that 70% of delegates are allocated by March 31, whereas previously it was only 35-40% by then. This will transform the Democratic primary process in ways few people yet understand.”

“If a candidate gets above 15% of the vote in a state primary, they receive their proportional share of that state’s delegates,” explained the same CIO. “In the past, that was fine because the field narrowed early. But we’re likely to see four candidates make it all the way to the convention in July.” Biden, Buttigieg, Warren, Sanders. “It’s highly unlikely anyone will win 50% of the delegates.” So candidates will transfer delegates to the contender of their choice, and that will determine the winner. “This will be America’s first parliamentary-style nomination.”

"We’ll head into the July convention with two voting blocks,” he said. Warren and Bernie (Progressive). Biden and Buttigieg (Moderate). “It will create a lot of uncertainty as to who will prevail, and some people will think this will benefit Trump. But he is an extremely weak candidate.” Trump lost the 2016 popular vote and were it not for 77k voters spread across Philadelphia, Detroit and Milwaukee, he would have lost the Electoral College. “He’s tripling down on a strategy to bring out his base, but there aren’t many ageing, white, rural males left.”


Is A Global Crash Just Around The Corner? Central Banks Are Cutting At The Fastest Rate Since The Financial Crisis

Courtesy of ZeroHedge View original post here.

There is something very fishy about the world's economic situation. On one hand, US president Trump keeps repeating that the US economy is the strongest it has ever been, with global strategists, economists and officials parroting as much they can, repeating that the world economy is also set to rebound sharply any minute now. And yet, two things stand out.

As we pointed out first last month, and as Convoy Investments echoed last week, with the US economy allegedly doing very well, the Fed's balance sheet is now expanding at a rate matched only briefly by QE1, and faster than QE2 or QE3, in the aftermath of September's repo fiasco which provided Powell with an extremely convenient scapegoat on which to hang the return of "NOT QE" (which, we now know, is in fact QE.)

The Fed's unprecedented balance sheet expansion in a time of alleged economic stability and solid growth is a handy explanation why the S&P has been soaring in the past two months, and as we pointed out, a remarkable correlation has emerged whereby the S&P is up every week the Fed's balance sheet is higher, and down whenever the balance sheet has declined.

And so, while helping us understand what has been the fuel for the market's recent blow-off top meltup, the Fed's emergency intervention does beg the question: is there something amiss more than just the repo market, and is Powell telegraphing that a far more serious crisis may be looming.

It's not just Powell, however. It's everyone.

As Bank of America's Michael Hartnett notes in his latest Flows and Liquidity weekly, global monetary policy has flipped from Quantitative Tightening (net 42 hikes & $650bn liquidity removed in 2018) to aggressive Quantitative Easing (net 53 cuts) and represents that fastest pace of central bank cuts since the financial crisis.

Of course, back then, there was a legitimate reason for central banks to be cutting rates as if their lives depended on it: they literally did, because absent stabilization at any cost, fractional reserve

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2020 – The Year Decennial & Presidential Cycles Collide

Courtesy of ZeroHedge View original post here.

Authored by Lance Roberts via,

Here Comes Santa Claus (Rally)

On Friday, the market rallied sharply on the back of a much better than expected employment report and comments from Larry Kudlow that a “trade deal” is near. Given we are now at the last stages of the year where mutual, pension, and hedge funds need to “window dress” for year-end reporting, we removed our small equity hedge from the portfolio for the time being.

A quick word about that employment report.

While the headline number was good, it remained primarily a story of auto workers returning to work and continued increases in lower wage-paying jobs and multiple jobholders. Such has been the story of the bulk of this recovery. However, more importantly, the bump did not change the overall dynamics of the job market cycle, which is clearly deteriorating as shown in the chart below.

The key to trend change is CEO confidence which is extremely negative and coincident with employment cycle turns. Note that the end of employment cycles, when compared to CEO confidence, looks very similar at the end of each decade.

Nonetheless, in the short-term, the market dynamics are positive suggesting the market can indeed rally into the end of the year. As noted above, we have removed our equity hedge for now to allow our long-positions to fully benefit from the expected “Santa Claus” rally.  (Or if you prefer the more PC version then it would be the expected “Jovial Full-Figured Holiday Person” rally.)

With the market back to short-term overbought, and the short-term “sell signal” still in place, it is possible we could see a bit of a correction next week. However, as we head into the last week of the year, a retest of highs is quite likely. 

In the longer-term, as we will discuss more in a moment, the risk remains to the downside. It is highly unlikely there will be a “trade deal” anytime soon, and with the upcoming election, there will likely be increased volatility going into 2020.

From a purely technical perspective, on a monthly basis, the

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“See You After Jail Guys”: Art World Stunned After Man Eats $120,000 Banana Duct Taped To Wall

Courtesy of ZeroHedge View original post here.

On Friday, we reported on the latest bizarre milestone in the "art" world, when a banana duct-taped to a wall sold for $120,000 at that excess-liquidity conclave of ultra rich and other wannabe poseurs known Art Basel Miami Beach. Worse, a second banana duct-taped to a wall also sold for $120,000. Yet even worse than that, a third banana duct-taped to a wall is expected to sell for $150,000.

Then on Saturday, at around 1:45pm, the art world was shocked and the art gallery stunned, when a random man, allegedly a performance artist, ate said duct-taped banana that sold earlier this week for $120,000.

New York-based performance artist David Datuna ate the banana early on Saturday afternoon in front of a stunned convention full of "art" lovers most of whom had no idea whether they were witnessing even more "art", of just some clueless rando eating the world's most discussed "art" exhibit, the gallery told the Miami Herald.

Perrotin Gallery spokesman Lucien Terras told the Herald that Datuna did not "destroy" the artwork because "the banana is the idea", or as Magritte would say "Ceci n'est pas une banane.

The controversial piece, called "The Comedian," was created by Maurizio Cattelan, an Italian artist who had also entertained art lovers from around the globe in 2017 with his "America" 18-carat-gold toilet. The $6-million throne was stolen from England's Blenheim Palace over the summer according to CBS.

Emmanuel Perrotin, the gallery founder, told CBS News that Maurizio's work is not just about objects, but about how objects move through the world.

"Whether affixed to the wall of an art fair booth or displayed on the cover of the New York Post, his work forces us to question how value is placed on material goods," he said, although he could have also added "or eaten."

He added that "the spectacle is as much

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The David Einhorn Podcast: The Fed Is Monetizing Debt Again

Courtesy of ZeroHedge View original post here.

It was back in 2012 that famed contrarian and value investing hedge fund icon, David Einhorn, first took aim at the pinnacle of market manipulation when he slammed the Fed for creating the ultimate toxic cocktail: something he called the Jelly Donut Policy. As the Greenlight founder wrote in May 2012, the Fed is "presently force-feeding us what seems like the 36th Jelly Donut of easy money and wondering why it isn't giving us energy or making us feel better. Instead of a robust recovery, the economy continues to be sluggish."

Seven years later, the recovery is just as sluggish and yet nothing has changed; in fact, just two months ago, the Fed launched what Fed Chair Powell sternly refuses to admit is QE4 but… is QE4. And while Einhorn has been right that the Fed is ultimately destroying the very fabric of not only the US economy, but taking down society with it as the growing wealth and income disparity chasm will eventually culminate in civil war, by fighting the Fed, Einhorn has seen his AUM plummet in recent years, his hedge fund a shadow of what of what it once was, largely due to the relentless ascent of the so-called "bubble basket" of stocks, those names which benefit entirely due to the Fed's monetary generosity, and which have seen their stocks prices explode in the past decade.

Which brings us to another Jelly Donut – that's the name of a new podcast service, which in recent weeks has interviewed, Julian Brigden, Ben Hunt, Miles Kimball, and others. Most notably, among those interviewed is that man responsible for the concept in the first place: David Einhorn.

While David Einhorn has recently been in the press for yet another feud he is currently waging, this time with Elon Musk, in which he first accused the Tesla CEO of "Significant fraud",  followed up with even more specific accusations of accounting irregularity profiled here, in the podcast with Ryan – which marked the Greenlight CEO's first appearance in two years – Einhorn goes back to his roots and takes on his primary nemesis, the Federal Reserve, which is why among the topics covered are QE, ZIRP, MMT, fiscal and central bank

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“Where In The World Is Inigo?”: The Mysterious Disappearance Of The Billionaires’ Art Dealer

Courtesy of ZeroHedge View original post here.

“Where In The World Is Inigo?”: The Mysterious Disappearance Of The Billionaires’ Art Dealer

Where in the world is 32 year old art dealer Inigo Philbrick?

The mysterious young dealer burst onto the art scene years ago, bidding for million-dolllar works before age 30, his name written down in the rolodex of every art-collecting billionaire.

But now, he has vanished. And as Bloomberg reports, his name was one of the biggest topics of discussion in Miami Beach this week, where Art Basel – one of the biggest events in the art industry – is taking place. 

His disappearance comes after a wave of lawsuits filed against him for fraud in London, New York and Miami. The aftershock has left the Art Basel crowd fearing that it could stoke broader fears about the often-opaque industry globally. 

The story, not unlike the industry itself, stretches around the globe. It has links and ties to major auction houses, including an art-finance firm backed by George Soros.  Los Angeles-based art dealer Timothy Blum said: "It checks every box in a bad way. So gross."

The scandal centers around allegations that Philbrick sold the same art works to different investors, often at inflated prices. Just like with rehypothecated collateral, companies in Asia, Europe and the U.S. have all staked claims to the same art pieces. 

The allegations emerged in October which is when Philbrick disappeared. His gallery in Miami has been closed and he hasn't been spotted for weeks at the trendy Japanese restaurant where he was once a regular. There was a "For Rent" sign hanging outside of his London gallery.

Meanwhile, he failed to appear for court last month in both Miami and London and his lawyers in Miami have stopped representing him; his whereabouts have raised questions across the industry. 

Wendy Goldsmith, a London-based art adviser, asked: "What was he thinking?"

Adam Lindemann, a dealer and collector, said: "Philbrick seemed to come out of nowhere, and [I] was never quite sure where he got his funding. He had this charming, rogue manner about him. The art world always has people like

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Convenience Stores Outsmart Amazon With New ‘Honor System’ Model

Courtesy of ZeroHedge View original post here.

It's a time-tested principle: honesty through paranoia.

After Amazon spent all that time and money developing its cashierless 'Amazon Go' convenience store model, where a complex array of sensors and cameras are employed to ensure that customers are charged for their groceries via their Amazon accounts, convenience store chains from Russia to the US have found that allowing customers to pay for their own items at self-checkout counters – a system that relies on customer honesty – is equally as effective.

It sounds like an invitation to steal, but in the race to make shopping as seamless as possible, it makes sense. And many convenience store owners have found that rates of theft are surprisingly low.

"Our answer to Amazon Go is a store based on trust," said Andrey Krivenko, founder and chief executive officer of Vkusvill, Russia’s fastest-growing grocery chain, which started opening what it calls "micro markets" in Moscow office buildings last year. “People scan everything themselves and, in our already sizable experience, there’s virtually no theft."

Check out the photo below, taken at a Vkusvill market in Moscow. It's not quite the Amazon Go walk out with your groceries model, but it's close. And at a cost of $0.

Some of these markets have come up with truly ingenious psychological tricks to discourage theft.

Across the globe in downtown New York, beverage-maker Iris Nova sells $10 bottles of brands like Dirty Lemon in a small store in the bottom of a building that doesn’t have employees or a cash register. Customers are trusted to use their phones to pay for drinks via text message. The space has visible security cameras, as well as mirrors that may subconsciously push visitors to pay because they don’t want to see themselves stealing—although the company says the mirrors are purely for aesthetics.

Such a setup works because “you want to show yourself you’re a good person,” according to Kelly Goldsmith, an associate professor of marketing at Vanderbilt University’s Owen Graduate School of Management, describing it as “self-signaling.”

The mirror thing has helped the location clock a

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Meet The Old School Fund Manager Who Wants To Be The First To Embrace Quantum Computing

Courtesy of ZeroHedge View original post here.

Hedge fund manager Michael Hintze of CQS, based in London, is still a certain type of "old school".

His firm makes its investment decisions based on daily meetings, where managers pitch their ideas and thoughts about macroeconomic events behind a podium. He also has a "situation room", where TVs feature news networks like Al Jazeera and China's CCTV, according to Bloomberg.

But nowadays that is considered archaic and behind the times, especially in the age of algorithms and high frequency trading. 

And so Hintze looks as though he may be ready to embrace a switch, saying in a interview that his firm has now turned to "quantum computing" - a superfast technology that is still in labs, where major corporations like Google and IBM are still trying to figure it out. 

Hintze said: “We’re trying to get a little bit ahead. You need to be mindful of the tools you have, the ground you’re fighting over, and, thirdly, who you’re fighting against.”

But he also dismissed plans to start a fund run by algorithms. Instead, he says that CQS is working with a startup to develop a quantum chip to help the firm optimize portfolios and execute hedging strategies. CQS recently hired Ahmad Deek, formerly of Oppenheimer, to be the firm's head of data science. 

The firm has about $19 billion under management and so far, has done so just using traditional human analysts and managers. The company is one of the largest firms in Europe and its $3.1 billion multi-strategy CQS Directional Opportunities fund is up more than 550% since launching in August 2005. This is double the gain of the S&P 500 over the same time period and about 7x the average hedge fund return.

Hintze knows he faces upcoming challenges, too. Almost half of his firm's assets are in long-only strategies and he has recently entertained approaches by at least one PE firm about buying a stake in CQS.

He also has to deal with an investor appetite that is stoked primarily for quant funds and low-cost passive funds. He has previously called this a "paradigm shift"

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Are Profit Margins Really Plunging? Goldman Responds To Zero Hedge

Courtesy of ZeroHedge View original post here.

Ask any Wall Street analyst why stocks are at all time highs and the immediate answer will be because adjusted corporate profits and income are similarly at or near all time highs, which means that the multiple needed to justify an S&P around 3,150 is not all that egregious (technically it is, as DB's Binky Chadha noted last week when he pointed out that the S&P 500 is trading at a multiple that’s higher than any time since the dot-com era, except for a few months in late 2017 and early 2018. As Chadha wrote , "the S&P 500 trailing multiple has historically mostly stayed in a range between 10x-20x. So current valuation at 19.1x is clearly at the higher end of the historical range. Indeed, over the last 85 years, outside the late 1990s equity bubble, the multiple remained below current levels around 90% of the time.")

But is that really the case in a world where virtually everything is fake, pro-forma, non-GAAP or otherwise "adjusted" to fit a given narrative?

To answer this question, ten days ago we showed the one measure of corporate profitability that avoids various non-GAAP adjustments and one-time addbacks. We referred to the data set tracking corporate profitability without the benefits of non-GAAP adjustments, which is reported by the BEA as Corporate profits with inventory valuation (IVA) and Capital Consumption (CCAdj) adjustments. Such operating profits, or profits from current production, are the purest form of corporate earnings since this series puts all firms on the same accounting framework – it avoids non-GAAP adjustments – and the profit numbers are not adjusted for the number of shares outstanding.

And here, something stunning emerged when looking at corporate profits (after tax with IVA and CCAdj) as a % of US GDP: these have not only tumbled to the lowest level this decade, but are in fact lower than where they were when the US was sliding into the 2007-2009 financial crisis and when the US entered the 2007 recession!

Needless to say, this is a problem because as former chief economist for Alliance Bernstein, Joseph Carson, put

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Zero Hedge

The FAANMG Capex And R&D Budget Is Rapidly US Government Defense Spending

Courtesy of ZeroHedge View original post here.

Authored by Adam Virgadamo, Morgan Stanley equity strategist

Wrapping up our annual gathering this past week, three common themes across regions and sectors stood out. As 2020 unfolds, we’ll have more to say on these topics, but in the meantime, here are the broad outlines of our dialogue.

Disruption: Few themes are as evergreen as identifying disruptors and the disrupted, so it was no surprise that we spent much of our day on the subject. Our ideas around the poster children for disruption – e-commerce and the retail...

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Digital Currencies

The Road To Retirement: Millennials Put Their Faith In Bitcoin But Goldman Says Go With Gold

Courtesy of ZeroHedge View original post here.

"Drop Gold" - the ever-present tagline of Grayscale's Bitcoin Trust TV commercial - appears to be working its magic on a certain cohort of society.

2019 has seen assets under management in GBTC soar...

Source: Bloomberg

And for Millennials, according to the lates...

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Phil's Favorites

Tobin Smith: Foxocracy, the 2020 Election, and the Stock Market


For decades, Fox News has been spreading false information and hooking its audience into an angry, xenophobic and paranoid world view. It's no mystery that Fox was instrumental in the 2016 election -- but how did it do it? Tobin Smith, CEO of Transformity Research, Inc. and former Fox News contributor and talk show host, explores this phenomenon and discusses Fox News’ emotionally predatory and dangerously seductive partisan propagand...

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Kimble Charting Solutions

Gold Miners Indicator Attempting Multi-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble

Are Gold Mining stocks about to be sent a bullish signal they haven’t received in years? Possible says Joe Friday.

This chart looks at the Senior Miner/Junior miner (GDXJ/GDX) ratio over the past few years. Historically when the ratio is heading up, miners tend to do very well.

The ratio has created a series of lower highs just below the falling line (1), since the summer of 2016. The ratio is currently testing the strong falling resistance line and the June 2019 highs at (2).

Joe Friday Just The Facts Ma’am; If the ratio succeeds in a double breakout at (2), it sends miners a long-awaited bullish message.


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Insider Scoop

Scott Galloway Calls For Twitter's Board To Replace 'Part-Time CEO' Jack Dorsey Amid Africa Move Plans

Courtesy of Benzinga

A shareholder in Twitter Inc. (NASDAQ: TWTR) and New York University business professor wrote an open letter Friday to the company's board calling for the replacement of CEO Jack Dorsey.

What To Know

Scott Galloway, who owns more than 330,000 shares of Twitter stock a... more from Insider

Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance


Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...

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Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).

Click for popup. Clear your browser cache if image is not showing...

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Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook


Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein


Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...

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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...

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Why telling people with diabetes to use Walmart insulin can be dangerous advice

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


Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:


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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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