Investment Wisdom Of The Day Google
Bill Gross & Sam Zell: Everything Is Freaking Mispriced
When smart and successful investors are talking, it pays to listen. Watch the videos below and decide for yourself. Their message is loud and clear…..
Bill Gross & Sam Zell: Everything Is Freaking Mispriced Google
Is The S&P About To Breakdown?
4/1/2015 – Another down day with the Dow Jones down 78 points (-0.44%) and the Nasdaq down 20 points (-0.40%).
A very solid technical look of where we are in the technical composition of the market. Definitely worth 2 minutes of your time.
I am seeing the same thing as Carter. The markets are getting weaker by the day. Markets internals continue to deteriorate, distribution period has been in place over the last 6-9 months, interest rates are about to rise, stocks are overvalued and so on and so forth. You get the picture.
In terms of the catalyst. I don’t think you will have to look further than Q-1 earnings season. Again, due to the recent surge in the US Dollar and slowing economy, I would expect quite a few big guys to miss and guide lower. And I am not even talking about small and mid caps. That could be devastating, considering today’s expensive P/E multiples and high expectations.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. 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 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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. April 1st, 2015 InvestWithAlex.com
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Why You Should Never Go To War Over Your Investments
The saga of Herbalife continues. Six weeks ago I wrote about Ackman battling against Soros and Icahn, with Herbalife being stuck in the middle. Is It Time To Buy Herbalife (HLF)? The Saga Of Giant D#$*s And with the stock being up over 12% since then, the fun is just getting started.
Ackman says shutting Herbalife down is key to him
I have argued before that Ackman should have never dragged his short position into the court of public and judicial opinion. That is a big no no for any short seller and his Sin #1. And his Sin #2? Making a personal crusade out of the whole thing.
William Ackman, who has spent more than two years accusing Herbalife Ltd of running a pyramid scheme, said on Monday that shutting down the company is “one of the most important things” he can do.
This is important for a few reasons. First, Herbalife’s (HLF) stock broke out of its first resistance level. Suggesting that it wants to test its secondary resistance level at around $55. Probably soon. Second, Ackman is too committed to a particular outcome and 99% of the time this backfires. Finally, with Soros and Icahn on the opposite side of the trade, it is highly probable the stock will break out once this “witch hunt” goes away.
All in all, the likelihood of Herbalife’s stock pushing higher this year is very high.
Investment Grin Of The Day
Rates Will Rise As Risk Skyrockets
Everyone has an opinion on whether or not the FED will increase interest rates. Futures are saying YES and I don’t think the FED can be any more clear here. Strong case for June rates liftoff, says Fed’s Lacker
“Given what we know today, a strong case can be made that the federal funds rate should be higher than it is now,” Lacker said in prepared remarks to the Greater Richmond Chamber of Commerce. “I expect that, unless incoming economic reports diverge substantially from projections, the case for raising rates will remain strong at the June meeting.”
Which leads us to a pretty good advice from Saxo Bank’s chief economist. Sell Your Stocks and Take Six Months Off
“If nothing else, reduce your stock portfolio to where it was on the first of January last year, put the money into cash and take a nice long summer holiday,” said Jakobsen, 50, also chief investment officer at the Danish lender. “You won’t make any money, but you lose all the downside risk.”
I would tend to agree with the sentiment above. Imagine going into cash at 2000 and 2007 tops and that is precisely what Mr. Jakobsen is telling you to do now. Although I would make one slight adjustment. This will take a heck of a lot longer than six months to play out. Consider staying out for at least 2 years.
Will Earnings Surprise To The Downside?
3/31/2015 – A down day with the Dow Jones down 198 points (-1.10%) and the Nasdaq down 46 points (-0.44%).
It appears that way as we have discussed the likelihood of that happening over the last few weeks. Strong dollar, collapsing GDP growth, decelerating economy and corporate growth, no QE and anticipated interest rate hikes. Given today’s hefty valuation levels, is this a perfect bearish setup or a bear trap if the earnings are not as bad? Watch the video below and decide for yourself.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. 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 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. 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. March 31st, 2015 InvestWithAlex.com
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When Bernanke Speaks You Listen
If you haven’t heard, Bernanke is now a blogger. Which gives us a window into the Fed’s hypocrisy. Straight from the horses mouth.
A similarly confused criticism often heard is that the Fed is somehow distorting financial markets and investment decisions by keeping interest rates “artificially low.” Contrary to what sometimes seems to be alleged, the Fed cannot somehow withdraw and leave interest rates to be determined by “the markets.” The Fed’s actions determine the money supply and thus short-term interest rates; it has no choice but to set the short-term interest rate somewhere. So where should that be? The best strategy for the Fed I can think of is to set rates at a level consistent with the healthy operation of the economy over the medium term, that is, at the (today, low) equilibrium rate. There is absolutely nothing artificial about that! Of course, it’s legitimate to argue about where the equilibrium rate actually is at a given time, a debate that Fed policymakers engage in at their every meeting. But that doesn’t seem to be the source of the criticism.
The state of the economy, not the Fed, is the ultimate determinant of the sustainable level of real returns. This helps explain why real interest rates are low throughout the industrialized world, not just in the United States.
Alright, fair enough. I would have to agree with Mr. Bernanke on one thing. As the chart above illustrates, we have been in a 33 year bear market in yields. A bear market that is technically not yet over. I continue to maintain that we will see either a lower low or a double bottom at around 1.3-1.5% on a 10-Year before this bear market is finished.
The problem has to do with interpretation of the Fed’s message by investors and the Fed’s foolishness of believing in their own BS (highlighted quote). For instance, today both the Fed and most investors believe that the FED can control liquidity and stability. I continue to maintain that it is the biggest fallacy out there. Something that most people will only figure out when it is already too late and the markets are in free fall. That is the biggest risk today.
Investment Wisdom Of The Day
Some of Murphy’s Laws:
- If anything can go wrong, it will.
- Nothing is ever as simple as it seems.
- Everything takes longer than you expect.
- Left to themselves all things go from bad to worse.
- Nature always sides with the hidden flaw.
- Mother Nature is a bitch.
- It is impossible to make anything foolproof because fools are so ingenious.
- If everything seems to be going well, you have obviously overlooked something.
- If you can keep your head when, all around you, others are losing theirs, you just don’t understand the situation.
- For every human problem, there is a neat, simple solution — and it is always wrong.
What You Ought To Know About Global Deflation
Despite currency wars, zero interest rates and world central banks outright monetization, deflation is not going away. Globally. Case and point…..
- Deflation risk is now a worry even for China
- The latest signs China’s trillions in debt are getting tricky to handle
Deflation is not bad. Well, unless your economy is leveraged to the hilt and you have to rely on low interest rates and money printing to wiggle your way out of it. As is the case with most, if not all, global economies.
Can anything be done to prevent deflation at this juncture?
Sure, an outright debt and currency monetization. Something the FED has been trying to do for quite some time. Something that they have failed to do despite introducing a $1 Trillion QE and keeping interest rates at zero for way to long. That is not to say that they won’t be successful in the future, but rather, to suggest that blatant currency destruction is the only viable option they have left.
In other words, there is no possible outcome where this ends well. And while they might be successful at keeping deflation at bay for a little bit longer, eventually it will overwhelm the global economy. Just take a look at Japan and you will have a fairly good idea about how this ends.