Archive for the ‘Uncategorized’ Category

How immigrants give American companies a powerful boost against Chinese rivals

How immigrants give American companies a powerful boost against Chinese rivals

Courtesy of Benjamin A.T. Graham, University of Southern California – Dornsife College of Letters, Arts and Sciences

The ongoing trade war is the most visible front in America’s struggle with China for global influence. Oddly, it may be immigration policy, as much as tariffs and trade deals, that determines which country prevails.

That’s because American competitiveness in foreign markets is a key battlefield in the struggle. And while the U.S. has long been the leading source of foreign investment in developing countries, China has emerged as an increasingly assertive player. With its Belt and Road Initiative, China is using investment as a tool to extend its political influence throughout Asia, Africa and Latin America.

But as it turns out, immigrants – a group that President Donald Trump frequently denigrates – provide the U.S. with a surprisingly powerful competitive advantage, as my research has shown. And policies that limit the number of immigrants who can come to the U.S. could be detrimental to America’s competitiveness in the long run.

A nation of immigrants

While America is a nation of immigrants, China is not. Chinese companies have few immigrants to hire, and this hurts them.

There are only a million foreign-born residents in China, compared with 50 million in the U.S., even though China’s population is four times larger.

Whether an American company wants to invest in India, Nigeria, Armenia or Guatemala, there is a flourishing immigrant community in the U.S. that businesses can tap to help them navigate challenging social and political environments. Few Chinese companies can do the same.

This gives American companies a competitive edge. Specifically, immigrants’ social and political ties to their home countries, combined with the professional connections they make in the U.S., allow immigrants to bridge the gap between American companies and valuable networks in developing countries.

Brothers-in-law and childhood friends

In many developing countries, formal institutions like courts are weak, and personal relationships play a large role in both business and politics.

If you want to get a permit quickly, you need a brother-in-law in the permit office or a childhood friend who is now a…
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Will We Hold It Wednesday – S&P 3,000 Edition

So far, so good.

Just a few days into earnings season but no major blow-ups yet and the S&P 500 is holding up over the 3,000 line but the volume finally increased yesterday and it was down volume, not up.  We have to hold 3,000 for the whole weak to make a meaningful breakout and this evening we get earnings from a lot of heavy-weights like EBAY, NFLX and IBM and MSFT reports tomorrow evening so we'll have some clues as to how Big Tech is doing.  

Bank earnings have been good so far and Dow components JPM, GS and even JNJ beat their estimates yesterday though the overall index still finished lower as sellers showed up and found not enough buyers to keep the prices level.  That's the great danger in a low-volume rally:  When it comes time to sell, there's no one to buy it from you and prices can drop very quickly.

We're in a very strange market at the moment where earnings are clearly coming down but the market just keeps going up.  There's a huge disconnect from reality and, as I've said before, Fear of Missing Out (FOMO) is keeping people in but this market can turn ugly very quickly and it's VERY important to have hedges in your portfolios and, keep in mind, CASH!!! is the best hedge there is.

We'll be reviewing our Short-Term Portfolio (STP) this morning (and in our Live Trading Webinar at 1pm, EST) and making sure those hedges are enough to protect our Long-Term Portfolio (LTP) and, if not, then either we need more hedges or less positions!  

Our Money Talk Portfolio has its own hedges and we last reviewed that over at Seeking Alpha on May 16th at $112,908 and, since we only adjust this portfolio live on BNN's Money Talk show and since I haven't been on since (will be on in August), the positions remain untouched but on track as we're now up to $135,583, so it's been a very good two months with a $22,675 gain, which is 45% of our $50,000 base!  SQQQ calls expired worthless and TZA had a reverse split but nothing else has changed but the rally has given us a huge chunk
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Opposite of Conventional Wisdom

 

Opposite of Conventional Wisdom

Courtesy of 

There was an article in the New York Times that highlighted the reversal of previous findings in medicine.

Of more than 3,000 studies published from 2003 through 2017 in JAMA and the Lancet…more than one of 10 amounted to a “medical reversal”: a conclusion opposite of what had been conventional wisdom among doctors.

This got me thinking about conventional wisdom in investing that might need further scrutiny. Before I get into it, this thought exercise was way more difficult than I thought it would be. The only piece of conventional wisdom that 90% of investors will nod their head at is “diversification is the only free lunch.”

I was able to come up with five items where I think the opposite of conventional wisdom is true.

Stocks are riskier than bonds.

One-month U.S. Treasury bills, often put in the risk-free bucket, went 68 years with a negative real return. Sure stocks can kill you fast, but bonds can kill you slowly.

Gold is a good hedge against inflation.

This makes sense in theory, but it is not always the case in reality. If gold did provide a hedge against inflation, you would expect the two to be at least somewhat correlated. The chart below shows the rolling 12-month returns of gold and CPI. Of course I’m cherry picking by starting in 1980, a decade after rampant inflation and amazing returns for gold, but still, over the last 40 years, this conventional wisdom has not held up well.

If you can time the economy, you can time the stock market. 

Okay, this one is actually more true than I thought it would be before I looked at the data. Since 1950, by the time the recession started, on average, stocks were in a 9.2% drawdown, which you can see in the chart below. So it turns out that knowing when a recession starts is a great signal to get out of stocks. Problem is you can never know in real time when a where you are


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America’s Real Divide Isn’t Left vs. Right. It’s Democracy vs. Oligarchy.

 

"Crumbling Justice" by Brandon S. Thvndar

 

America’s Real Divide Isn’t Left vs. Right. It’s Democracy vs. Oligarchy.

Courtesy of Robert Reich

I keep hearing that the Democratic party has moved “left” and that some Democratic candidates may be “too far left”.

But in this era of unprecedented concentration of wealth and political power at the top, I can’t help wondering what it means to be “left”.

A half-century ago, when America had a large and growing middle class, those on the “left” sought stronger social safety nets and more public investment in schools, roads and research. Those on the “right” sought greater reliance on the free market.

But as wealth and power have concentrated at the top, everyone else – whether on the old right or the old left – has become disempowered and less secure.

Safety nets have unraveled, public investments have waned and the free market has been taken over by crony capitalism and corporate welfare cheats. Washington and state capitals are overwhelmed by money coming from the super-rich, Wall Street and big corporations.

So why do we continue to hear and use the same old “right” and “left” labels?

I suspect it’s because the emerging oligarchy feels safer if Americans are split along the old political battle lines. That way, Americans won’t notice they’re being shafted.

In reality, the biggest divide in America today runs between oligarchy and democracy. When oligarchs fill the coffers of political candidates, they neuter democracy.

The oligarchs know politicians won’t bite the hands that feed them. So as long as they control the money, they can be confident there will be no meaningful response to stagnant pay, climate change, military bloat or the soaring costs of health insurance, pharmaceuticals, college and housing.

There will be no substantial tax increases on the wealthy. There will be no antitrust enforcement to puncture the power of giant corporations. No meaningful regulation of Wall Street’s addiction to gambling with other peoples’ money. No end to corporate subsides. CEO pay will continue to skyrocket. Wall Street hedge


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Deutsche Bank job cuts are tip of the iceberg for the finance industry

 

Deutsche Bank job cuts are tip of the iceberg for the finance industry

 

Welcome to the fintech revolution. Shutterstock

Courtesy of Arturo Bris, IMD Business School

Deutsche Bank caused a recent stir with the seemingly sudden announcement that it would cut 18,000 jobs – one fifth of its global staff. It is part of a reorganisation designed to return the bank to its core business of corporate banking, private banking and asset management. Most of the job losses will be in the global equity traders and investment banking division Deutsche Bank stated in an announcement made on July 7.

Some may read the bank’s problems as the result of a bad strategy, bad execution, bad luck, or a combination of these three. I, however, think that the German bank’s problems reflect the profound transformations currently taking place in the financial industry in general, and in investment banking especially.

Let me start by saying that the value of the financial industry is not easy to justify in terms of social and economic benefits. It is true that banks perform a useful function of redistributing financial risk, allocating capital and providing credit. But there are too many banks, and what is even worse, there are too many bankers.

Looking at the case of Deutsche Bank, between 2009 and 2018 the bank lost US$14.8 billion in market value (including dividends paid to shareholders). This is the total value loss, with some ups and downs. In 2016 the market value of Deutsche Bank dropped by almost US$27 billion, while in 2017 it grew by US$21.5 billion.

This means Deutsche Bank destroyed US$15,370 per employee, per year. And, on average, the 100,000 employees of Deutsche Bank were paid more than what they have generated. Hence the logic that firing 18,000 bankers creates value.

A new financial order

In his recent book “Bullshit Jobs: A Theory”, David Graeber from the London School of Economics describes a major trend in modern economies: the proliferation of useless, unfulfilling jobs that do not create value for society. In his words, it is the rapid development of FIRE (finance, insurance, and real estate) companies that…
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As flood risks increase across the US, it’s time to recognize the limits of levees

 

As flood risks increase across the US, it's time to recognize the limits of levees

Water rushes through a breached levee on the Arkansas River in Dardanelle, Ark., May 31, 2019. Yell County Sheriff's Department via AP

Courtesy of Amahia Mallea, Drake University

New Orleans averted disaster this month when tropical storm Barry delivered less rain in the Crescent City than forecasters originally feared. But Barry’s slog through Louisiana, Arkansas, Tennessee and Missouri is just the latest event in a year that has tested levees across the central U.S.

Many U.S. cities rely on levees for protection from floods. There are more than 100,000 miles of levees nationwide, in all 50 states and one of every five counties. Most of them seriously need repair: Levees received a D on the American Society of Civil Engineers’ 2018 national infrastructure report card.

Levees shield farms and towns from flooding, but they also create risk. When rivers rise, they can’t naturally spread out in the floodplain as they did in the pre-flood control era. Instead, they flow harder and faster and send more water downstream.

And climate models show that flood risks are increasing. During this year’s unusually wet winter and spring, dozens of levees on the Missouri, Mississippi and Arkansas rivers were overtopped or breached by floodwaters. Across the central U.S., rivers are becoming increasingly hard to control.

Levees exist in one out of every five U.S. counties. USACE

Remaking the Missouri

In my book, “A River in the City of Fountains,” I describe the complexities of flood control in Kansas City, which sits at the junction of the Missouri and Kansas rivers.

The Missouri, the larger of these two, is America’s longest river, rising in Montana’s Rocky Mountains and flowing east and south for 2,341 miles until it joins the Mississippi River north of St. Louis. Historically it was wide and shallow, full of sand bars and snags that created challenges for steamboats.

In the late 19th and early 20th centuries, Kansas City…
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320% Tuesday – Global Debt to GDP Makes New Records

      $246,000,000,000,000.

That's what we just hit in Global Debt as of Q1 and, as you can easily see by adding up all the numbers in the chart on the right, our Global GDP is just under $80Tn so we're now hitting the 320% mark on the debt to GDP scale for the first time in human history.  And the US "only" has $22.5Tn of that debt so perhaps you are willing to ignore the complete inability of the US to ever pay that bill, but that still leaves $223,500,000,000,000 of debt divided by the remaining $60Tn, which means the rest of the world is getting very close to being 400% of their GDP in debt.

And what is the rest of the World doing about it?  The same thing we are – they are easing their policies and they are spending money on stimulus programs because NO ONE can afford a recession – even a mild one can quickly lead to a total collapse that will ignite this global debt bomb – and no one wants to see that happen so we are Globally "extending and pretending" and waiting for the debt fairy to come and forgive us our economic sins.  

While the Chinese Government is "only" about 100% of their GDP in debt, Chinese Companies make up for it with their own $21Tn pile of debt, 155% of their current GDP.  In fact, Chinese firms accounted for 42% of all Corporate Bonds issued in Emerging Markets this year and the IIF says there are now serious risks of default next year and in 2021.  Sonja Gibbs the IIF’s Managing Director for Global Policy Initiatives, said:

"It’s almost Pavlovian. Rates go down and borrowing goes up. Once they are built up, debts are hard to pay down without diverting funds from other goals, whether that’s productive investment by companies or government spending.”  

This is not a group of borrowers with long experience of managing debt over economic cycles. Once you get into a downturn, a lot of firms have a lot of debts that they will have difficulty in paying.”

There's been a shift to shorter-term borrowing in Emerging Markets as the yield curve widens and that leaves
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Directors are in the crosshairs of corporate climate litigation

 

Directors are in the crosshairs of corporate climate litigation

Melting glaciers threaten the village of Huaraz, Peru. Uwebart/Wikimedia, CC BY-SA

Courtesy of Lisa Benjamin, Dalhousie University

The directors of RWE, a German energy company, had probably never heard of the small village of Huaraz, Peru before 2015. But Saúl Lliuya, a mountain guide and farmer there, sued RWE for climate-related harms that year.

Lliuya’s lawyers, supported by Greenpeace, argued that RWE’s historic green house gas emissions have contributed to increased global temperatures, which have, in turn, caused the glaciers around Lake Palcacocha to melt. The lake sits above Huaraz, where more than 50,000 residents now face an increased risk of severe flooding.

The Higher Regional Court of Hamm, in Germany, agreed with Lliuya’s arguments and let the case proceed to the evidentiary stage. No matter what the outcome, the court’s statements that climate harms can, in principle, give rise to corporate liability, is historic — no other court has made this decision before.

The intersection between climate change, energy and corporate law is a fast-emerging area. This case is part of a second wave of litigation against corporations, and has implications for directors and their legal duties. Corporate fiduciary duties and corporate law have traditionally been insulated from environmental and climate concerns, but as the impacts of climate change escalate, this may no longer be true.

The second wave of climate litigation

The directors of RWE are not alone. There has been an explosion of climate litigation launched against fossil-fuel intensive, or “carbon major” corporations.

The cities of Oakland and San Francisco have sued, as have New York and Baltimore. So have counties in California, Washington and Colorado, the state of Rhode Island and fishermen in Oregon and California.

Most recently, non-governmental organizations in the Netherlands have launched suits, and others are being considered in Toronto and Victoria.

These cases have been dubbed the second wave of climate litigation against carbon majors. There has never been a successful case against corporations for climate-induced harm — yet.

The first wave


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University of California’s showdown with the biggest academic publisher aims to change scholarly publishing for good

 

University of California's showdown with the biggest academic publisher aims to change scholarly publishing for good

For now, it’s going to be trickier for the University of California community to access some academic journals. Michelle/Flickr, CC BY-NC-ND

Courtesy of MacKenzie Smith, University of California, Davis

This month, academic publisher Elsevier shuttered the University of California’s online access to current journal articles. It’s the latest move in the high stakes standoff between Elsevier, the world’s largest publisher of scholarly research, and the University of California, whose scholars produce about 10% of the nation’s research publications.

Last February, Elsevier chose to continue providing access to journals via its ScienceDirect online platform after UC’s subscription expired and negotiations broke down. With its instant access now cut off, the UC research community will learn firsthand what it’s like to rely on the open web and other means of accessing critical research.

The UC-Elsevier showdown made headlines because it’s symptomatic of the way the internet has failed to deliver on the promise to make knowledge easily accessible and shareable by anyone, anywhere in the world. It’s the latest in a succession of cracks in what is widely considered to be a failing system for sharing academic research. As the head of the research library at UC Davis, I see this development as a harbinger of a tectonic shift in how universities and their faculty share research, build reputations and preserve knowledge in the digital age.

Accessing a journal no longer means going to a periodicals room. Newton W. Elwell/Boston Public Library/Flickr, CC BY

Moving from stacks to screens

Here’s how things traditionally worked.

Universities have always subscribed to scientific journals so their researchers can study and build on the work that came before, and won’t needlessly duplicate research they never knew about. In the print age, university library shelves were lined with journals, available for any researcher or – in the case of public universities like the University of California – any member of the public to…
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How do lithium-ion batteries work?

 

How do lithium-ion batteries work?

Lithium-ion batteries power lots of different kinds of devices. Transport Canada

Courtesy of Robert Masse, University of Washington

The smartphone era is only just over a decade old, but the pocket-sized computers at the heart of that societal transformation are only really possible because of another technology: lithium-ion batteries.

First sold commercially in 1991 by Sony for its camcorders, these types of batteries are good for much more than portable consumer electronics. They’re at the center of two other technological revolutions with the power to transform society: the transition from internal combustion engines to electric vehicles, and the shift from an electric grid powered by fossil fuels to renewable energy generators that store surplus electricity in batteries for future use.

So how do these batteries work? Scientists and engineers have spent entire careers trying to build better batteries and there are still mysteries that we don’t fully understand. Improving batteries requires chemists and physicists to look at changes on the atomic level, as well as mechanical and electrical engineers who can design and assemble the battery packs that power devices. As a materials scientist at the University of Washington and Pacific Northwest National Lab, my work has helped explore new materials for lithium-air batteries, magnesium batteries and of course lithium-ion batteries.

Let’s consider a day in the life of two electrons. We’ll name one of them Alex and he has a friend named George.

Battery anatomy

What a standard AA alkaline battery looks like on the inside. Lead holder/Wikimedia Commons

Alex lives inside a standard alkaline AA battery, like in your flashlight or remote control. Inside a AA battery, there is a compartment filled with zinc and another filled with manganese oxide. At one end, the zinc only weakly hangs onto electrons like Alex. On the other end, the manganese oxide powerfully pulls electrons toward itself. In between, stopping the electrons from going directly from one side to another, is a piece of paper soaked in a solution of potassium and water, which coexist…
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Kimble Charting Solutions

Aussie Dollar About To Send Bullish Message To Precious Metals?

Courtesy of Chris Kimble.

The Australian Dollar and its ETF (NYSEARCA: FXA) have traded sideways for much of the past 4 years (see blue shaded area on chart above).

And since the Aussie Dollar and precious metals are highly correlated, this hasn’t helped gold and silver.

But this setup may be changing soon as a big test comes into play for the AU$.

It is currently testing falling resistance on a bullish falling wedge pattern.

If it succeeds in breaking out at (1), it will send metals and commodities a short-term bullish message. Stay tuned!

This article was first writ...



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Zero Hedge

Three Iranians Caught Smuggling "Many Tons" Of Nuke-Related Material Out Of US

Courtesy of ZeroHedge. View original post here.

A major case involving three Iranian citizens who for years allegedly smuggled nuclear related materials into Iran from a US broker has been revealed this week in a New York federal court. 

The scheme involved illegally exporting "many tons" of carbon fiber out of the United States between 2008 and 2013, which federal prosecutors say violated existing US sanctions and a UN em...



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Phil's Favorites

Senator Compares Facebook's Libra Association to Spectre in James Bond Movie

Courtesy of Pam Martens.

David Marcus of Facebook at July 16, 2019 Senate Banking Hearing on Libra Digital Currency

Yesterday the U.S. Senate Banking Committee assembled to hear Facebook’s David Marcus explain how the company wants to create a global digital currency called Libra, to be run by a Switzerland-based global organization called the Libra Association, made up of 27 members from the fields of payment systems, technology, telecommunications, blockchain services, venture capital, nonprofits and academic institutions.

Given Facebook’s serial history of abusing the privacy rights of its users and selling their data without their per...



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Insider Scoop

Curaleaf Holdings To Buy Grassroots In $875M Deal

Courtesy of Benzinga.

Read more about our latest Cannabis News! CANNABIS HOME

Cannabis operator Curaleaf Holdings, Inc. (OTC: CURLF) (CSE:CURA) said Wednesday it has entered into an agreement to acquire multi-state ...



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Digital Currencies

Bitcoin Breaks Back Below $10k, Crypto-Crash Accelerates As Asia Opens

Courtesy of ZeroHedge. View original post here.

Update 2010ET: Having briefly stabilized after this morning's weakness, cryptos are tumbling once again as Asian markets open.

Bitcoin has broken below $10,000 again...

*  *  *

While all eyes are on Bitcoin as it slides back towards $10,000, the real mover in the last 12 hours has been Ethereum after...



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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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ValueWalk

Professor Shubha Ghosh On The Current State Of Gene Editing

 

Professor Shubha Ghosh On The Current State Of Gene Editing

Courtesy of Jacob Wolinsky, ValueWalk

ValueWalk’s Q&A session with Professor Shubha Ghosh, a professor of law and the director of the Syracuse Intellectual Property Law Institute. In this interview, Professor Ghosh discusses his background, the Human Genome Project, the current state of gene editing, 3D printing for organ operations, and gene editing regulation.

...

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Chart School

Gold Gann Angle Update

Courtesy of Read the Ticker.

Charts show us the golden brick road to high prices.

GLD Gann Angle has been working since 2016. Higher prices are expected. Who would say anything different, and why and how?

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



The GLD very wide channel shows us the way.
- Conservative: Tag the 10 year rally starting in 2001 to 2019 and it forecasts $750 GLD (or $7500 USD Gold Futures) in 10 years.
- Aggressive: Tag the 5 year rally starting in 1976 to 2019  and it forecasts $750 GLD (or $7500 USD Gold Futures) in 5 years.

Click for popup. Clear your browser cache if ima...



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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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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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

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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