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China’s Role In The Upcoming War

Continuation from two weeks ago…..When it comes to China the situation is quite interesting. The Pentagon does not see China as a major nuclear force or a threat.  For instance, while the US has in excess of 2,000 warheads capable of hitting China on short notice, China deploys an estimated 20 ICMBs capable of targeting US cities.  In fact, if a military conflict between the US and China was to develop, the US plan of action calls for an immediate tactical nuclear strike against China’s nuclear forces, rendering them obsolete.

“In the first hypothetical nuclear attack scenario, U.S ballistic missile submarines stationed in the Pacific Ocean will fire Trident II D5 submarine launched ballistic missiles (SLBMs) at Chinese DF-DA missile silos. As discussed above the U.S. Trident force has evolved to become the main element in the US nuclear war plans against China.  U.S. long-range bombers based in the Pacific region or flown from the United States would require a relatively long time to reach their targets and would have to penetrate China’s airspace. The US ICBM force, based in silos in the upper Midwest, would have to over-fly Russia and risk triggering the remnants of the Soviet early-warning system, or worse. Since the end of the Cold War, US nuclear forces have been shifted to the Pacific in the form of additional Trident SSBN’s based at the Submarine Base at Bangor, Washington. For these reasons, we developed a scenario involving a Trident strike against the DF-5A, the sole Chinese nuclear weapon system capable of hitting the continental United States (CONUS) and China’s primary deterrent against the United States. “

As you continue to study the pentagon document above, it soon becomes evident that the top US military brass does not view China as a legitimate nuclear threat.  If anything, the Pentagon expects to neutralize China’s nuclear forces within minutes. As accurate as that view might be, they are missing one crucial point.  An eventual Chinese and Russian military alliance. Turning any strike against China, into a strike against Russia as well.

As was suggested so many times throughout this book, it is highly probable that we will see an official Russian and Chinese military alliance by the late 2020’s. To counterbalance the US/NATO and ensure the survival of both countries.  China will view Russia’s nuclear forces as a major deterrent against the US and Russia will see China’s potential 100 Million men army as a major asset against NATO.  Making this alliance a brilliant strategic military move for both countries.  In essence, in the very near future a war against China would lead to the same outcome as a war against Russia.  A mutually assured annihilation.

In summary, it is next to impossible to predict which exact event will set us on the path to the Nuclear World War 3. It might be as simple as escalating economic sanctions or a short firefight between a Chinese and an American soldier.  If anything, the history has thought us that we have already come, a number of times, within an inch of initiating a full out nuclear war.  Whatever that trigger point might be in the future, one thing in certain. One way or another, the war will be triggered in our proposed time window.

To Be Continued Tomorrow …...(Why Am I Seeing This On A Financial Site?)

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China’s Role In The Upcoming War Google

When You Should Trade In & Out Of Your Potential Tenbagger

Continuation from Friday…….One of the first things we have to realize in our attempt to anticipate and to time such large moves in the underlying stocks is the fact that the fundamental analysis will not be very useful.  We cannot rely on such an analysis due to a simple fact that the stock market or individual stock movements lead the fundamentals at least 95% of the time. In other words, by the time the actual numbers filter through onto financial statements or into press releases the corrections we are trying to identify are likely to be over.  Or nearly over.  The only fundamental metric that would be useful in our case is the general overvaluation of an underlying security.

For instance, if company’s stock price had appreciated so much over a relatively short period of time that it now sells above any reasonable valuation level, even if the future is otherwise bright, it is highly probable that the underlying stock price might correct fairly soon. Once we understand such fundamental shortcomings, it leaves us no choice but to concentrate on the technical and mathematical/timing side of the equation.

Our first 60% drop in Keurig’s stock price had occurred between 2001 and 2002. To be exact, the company’s stock price topped out in July of 2001 at around $2.90 a share and then proceeded to collapse into October of 2002 bottom of $1.00 a share. A 65% decline.  GMCR4

Once we look at the chart a number of things become immediately apparent.

  1. From the fundamental perspective alone , by the time 2001 top had arrived the company’s stock price had already zoomed up 1,100% from our 1999 proposed $0.25 entry point. Going parabolic on a number of occasions. In other words, while Keurig coffee systems were starting to get traction, there was no way for the fundamentals to keep up with a rise in the stock price. The stock was overpriced and overextended.
  2. An investor applying mathematical and timing work to the overall market would be aware that the overall stock market is going through its initial bear leg and that this bear leg was not scheduled to bottom out until October of 2002. Rendering 2001-2002 period as a high risk one.

Given the setup above, any investor in the GMCR stock should have shifted in a highly defensive mode in 2001 by watching the technical side of the stock extremely closely for any sign of a technical breakdown.  As a technical breakdown at this juncture would have likely yielded a substantial decline in the company’s stock price.

That is exactly what happened in August of 2001 when Keurig’s stock broke below its lower low at around $2.50 and continued to head lower.  At that point, any investor who was watching the stock should have A. Sold his holding and B. Gone short.  The overall probability of a significant stock decline at that juncture was too great not to do so. Particularly when the technical analysis was confirming the move.

To Be Continued Tomorrow……

Z30

When You Should Trade In & Out Of Your Potential Tenbagger Google

Is This The Buying Opportunity Of A Lifetime

daily chart August 8 2014

8/8/2014 – A strong up day with the Dow Jones up 185 points (+1.13%) and the Nasdaq up 36 points (+0.83%). 

As you very well know, psychological make up is incredibly important when it comes to making money in the market. If you would be interested in learning what the prevailing view on the Wall Street is today, watch the video below.

While Mr.Smith makes a number of ridiculous statements, I will address only two. At appears that he believes that the economy drives the stock market. The reality is quite different. It is the stock market that drives the economy. And you don’t have to go further than 2007-2009 to see this principal at work. The economy was booming as the stock market topped out on October 11th, 2007 and then proceeded to collapse. Even Bernanke was talking about how hot the economy was until the second quarter of 2008. And while the economic numbers continued to collapse well into 2010, the stock market was surging higher since the March of 2009. So, who is leading whom Mr. Smith?

Second, bull markets do not die of old age. Sure, that would be great if we were in a bull market. This is the mistake that 99.99% of all investors are unaware of. We are not in a bull market. We are still in a secular bear market that started in 2000 and that will end in 2017. The 2007-2009 correction was not a bottom. Rather, it was a mid cycle correction within a secular bear market. Same as 1972-1974, 1941-1942 and 1907-1908 corrections. In other words, another big decline is still in front of us.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 8th, 2014 InvestWithAlex.com

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Is This The Buying Opportunity Of A Lifetime  Google

Tenbagger Trading Rules

Tenbagger Trading Rules
Maximizing Returns

Book Continuation From Yesterday…….While analyzing individual stocks in previous chapters we have looked at a number of variables that would allows us to first identify potential Tenbaggers, analyze their potential and then possibly take a position.  Yet, as we study the companies above we soon come to a realization that it is just as important to know when to get out or trade out of such stocks as it is when to initiate an original position. Doing so at the right time would not only prevent unnecessary losses, but in many cases it would allow us to double or triple the overall return on an underlying position (capital gains taxes are not considered in this analysis).

For instance, while Apple’s stock price had appreciated 3,700% over the last 11 years, the stock itself went through three significant corrections during the same period of time. A 60% drop in 2005, another 60% drop during the financial crisis of 2007-2009 and a 45% drop in 2012-2013. What’s more, another large drop is just around the corner.

If we were able to …..

A. Rotate in and out of these stocks at the right time and
B. Even go short

….our returns for such underlying Tenbaggers would skyrocket. For example, if we were able to avoid the three massive corrections in Apple’s stock price, our 3,700% return would quickly turn into a 16,220% return (approximately). A 162 bagger over the same period of time. Not bad. Yet, if we were fortunate enough not only to avoid the collapses but to short into them, we would be able to push our returns even higher. In the case of Apple our returns would skyrocket from 3,700% to 27,100%. Do this a few times and begin to realize just how important this approach is.

That is why it becomes incredibly important to lay out the necessary framework of getting in and out of our Tenbaggers at the right time. In this chapter we will look at each individual Tenbagger we have decided to invest in (Keurig, Apple and Chipotle) in order to ascertain at what points we should have gotten out and at what points we should have re-established our positions in the underlying securities. We will also determine if it would have made sense to go short at certain times to boost our overall returns. Finally, we will establish a clear set of trading rules that we should be able to apply to our future Tenbaggers.

Trading In and Out of Keurig Green Mountain (GMCR)

GMCR

To summarize, Keurig Green Mountain’s stock price had appreciated 49,600% between 1999 and today. Yet, if we were fortunate enough to take a long position in the late 1999 or early 2000 it would not have been an easy ride up. That would be due to a fact that Keurig suffered through a number of serious corrections during the same holding period.  To be exact, the stock had suffered through a 60% drop between 2001 and 2002, 50% drop in 2008 and a gut wrenching 84% collapse between 2011 and 2012.

To Be Continued On Monday……

Z31

Tenbagger Trading Rules  Google

When Will This Correction End?

daily chart August 7 2014

8/7/2014 – Another down day with the Dow Jones down 75 points (-0.46%) and the Nasdaq down 20 points (-0.46%). 

The stock market continues to behave as anticipated. So much so, that my subscribers know not only where this correction will bottom, but also the exact date. Plus, what to expect from the resulting rally. Click here to learn more. 

If you follow mainstream financial media you are likely to believe that the most recent sell off has been caused by geopolitical tensions throughout the world. In fact, according to the same people once this 5-10% correction is over, it will present patient long-term investors with a “Buying Opportunity Of A Lifetime”…..as always. Perhaps. 

Yet, as I have suggested here so many times before, the stock market doesn’t care about any of that. The market simply traces out its exact mathematical structure in multidimensional space. Its own DNA sequence. Something I describe in great detail in my book “Timed Value”. For instance, today’s 5 year cycle (off 2009 March 6th bottom) has now lasted as long as only ONE other 5 year cycle since the stock market started trading on May 21st, 1790. And if we are to compare them we would know exactly what happens next.

If you would be interested in learning what happens next and/or when a bear market of 2014-2017 will start (to the day), please CLICK HERE

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 7th, 2014 InvestWithAlex.com

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When Will This Correction End?  Google

Investment Wisdom Of The Day

peter lynch“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” Peter Lynch

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Investment Wisdom Of The Day Google

No Dice For Bally Technologies (BYI)

BYI2

TIMING & MATHEMATICAL ANALYSIS:

After going public in 1982 at around $20 a share (split adjusted) the company’s stock price has failed to follow any clearly identifiable cyclical or structural frameworks associated with it. While the stock appears to move in accordance to an eight year cycle, bottom-to-bottom, this cycle is questionable at best.  If anything, the stock appears to move inverse to the overall market about 50% of the time.

For instance, Bally’s all time low in May of 2000 had occurred just a few weeks after the Nasdaq set its blow off top and started to collapse. What’s more, while the overall market went through a 2.5 year bear market, setting a secondary bottom in March of 2003, that was the exact time of Bally’s high. And while the overall stock market surged higher between 2003 and 2005, the company’s stock price proceeded to decline by over 60%. Only to realign with the overall stock market thereafter.

In short, just as with our Best Buy analysis earlier, Bally’s stock price did not have a cyclical nor timing structure associated with it. Even following the overall structure of the market would have proven to be futile in this case. Any investor who would have been familiar with the overall structure of the market and the topping of the 18 year cycle in 2000 (1982-2000 bull market) would have never taken a position in Bally’s stock in the early 2000. Or 99% of other stocks for that matter.  Let alone a stock of the company that was on the verge of a financial collapse and a delisting.

As mentioned earlier, such stocks tend to oscillate on their own accord and without as much of a hint as to what the future holds.  It would not be at all inappropriate to file such stocks under a “Wild Animal” category and forget about them. Particularly when the fundamental and the technical analysis results had failed to yield anything worthwhile.  Based on my personal experience, it is best to steer clear of such stocks.

CONCLUSION:

Bally Technologies Inc, gave us no warning or evidence in 1999 or 2000 that it was about to stage a massive 8,000% rally over a 14 year period of time. In fact, all of our analytical metrics have failed in predicting the rise.

Sometimes it is just as important to know when it is time to take a position as it is when it is time to walk away. Bally Technologies presents us with a clear cut case as to why we should have walked away, even though the stock was about to stage a massive rally.

From the fundamental perspective alone, we would have been unable to determine if the company was about to stage a successful turnaround campaign or fall into bankruptcy. The management wasn’t talking, the company’s operations at the time were beyond complex, the stock was about to get delisted from the Nasdaq and there were no clear signs that things were about to improve. Certainly, there were no signs that the company was about to start a major consolidation/divestiture drive.

Our technical and mathematical analysis did not fare much better. Both have failed to predict an upcoming surge in the share price.  While our technical analysis did suggest a possible entry point in March of 2001 at $3 a share, when the stock price broke above its previous high, neither the fundamental nor the mathematical side of the analysis would warrant a position.

In conclusion, even thought Bally Technologies’ stock price went on to gain 8,000% between 2000 and today, there was no prudent way to take a position in the stock in either 1999 or 2000. By the time the fundamental picture was starting to clear up, the stock price had already surged to $20-30 a share.   In other words, it would have been impossible to predict this stock rise.

Final Prescription: Walk Away ….To Be Continued Tomorrow

Z31

No Dice For Bally Technologies (BYI)  Google

Why Some Investors Zig While Most Others Zag

daily chart August 6 2014

8/6/2014 – A slight up day with the Dow Jones up 13 points (+0.08%) and the Nasdaq up 2 points (+0.05%). 

The stock market continues to behave as anticipated. So much so, that my subscribers know not only where this correction will bottom, but also the exact date. Plus, what to expect from the resulting rally. Click here to learn more. 

I often get asked why I am so bearish or negative on today’s financial markets. Such people miss the entire point. I am neither a bull nor a bear. In fact, I could care less if the stock market is about to surge higher or collapse into a 2009 bottom. What is important is my mathematical and timing work. The same work that have made me incredibly excited and bullish in the first week of March 2009. Watching the Dow slam right into my target bottom on March 6th was a thing of beauty.

Which brings me to the point I am trying to make. There is a small subset of investors who are inversely predispositioned to the market. As opposed to other investors, it is in their nature to question things that do not make sense and to go against the grain when their research proves conclusive. Typically, such investors are able to outperform the market by a large margin.

For instance: India central bank chief warns of another market crash

India’s central bank governor, renowned for forecasting the 2008 financial meltdown, has warned that the world economy faces risk of another market crash as asset prices surge.

What is it that he sees that most other market participants in today’s environment miss? May it be extreme overvaluation levels, FED tightening, flattening yield curve, multiple divergences, speculative fever, etc……What is it? Most likely all of the above. Once again, if you are able to step away from the fire it is incredibly easy to see that the overall stock market is in a massive bubble that must unwind. One way or another.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years.  If you would be interested in learning when the bear market of 2014-2017 will start (to the day) and its internal composition, please CLICK HERE

(***Please Note: Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. August 6th, 2014 InvestWithAlex.com

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Why Some Investors Zig While Most Others Zag  Google