Investment Grin Of The Day Google
Why Marc Faber Believes You Should Buy Gold & Short Biotech, Social Media
A very good interview with Marc Faber. Definitely worth 5 minutes of your time. Why? Well, Marc believes the FED is starting to lose control, the US economy is rolling over and the stock market is massively overpriced. Particularly sectors such as Biotech (IBB) and Social Media (SOCL). He suggests shorting them through ETF’s. And the good news? According to Marc, gold is about to surge as it becomes the ultimate hedge against today’s currency wars. I mostly agree.
Why Marc Faber Believes You Should Buy Gold & Short Biotech, Social Media Google
Why The FED Is Freaking Out
2/23/2015 – Another mixed day with the Dow Jones down 24 points (-0.13%) and the Nasdaq up 5 points (+0.10%).
The stock market continues to behave as forecasted. If you would like to find out when and where the market tops out next, please Click Here.
Two relevant views of the stock market in today’s daily update.
- A Stock Market Alarm Is Sounding for the First Time Since 2007
- The Fed is worried about what happens when everyone rushes for the exit
Despite recent higher highs, the market continues to flash a red warning light in various metrics. Today, lets take a quick look at margin debt. As the charts below suggest, long-term margin debt is at an all time high. Higher than at 2000 and 2007 tops. Short-term, margin debt has peaked last year and is now rolling over. That brings into question the validity of today’s rally and the ability of this market to push any higher.
On the flip side, this also raises the question if the liquidity can disappear overnight, just as it did back in 2008. Making the Fed very worried. From January’s FED Minutes.
“Finally, the increased role of bond and loan mutual funds, in conjunction with other factors, may have increased the risk that liquidity pressures could emerge in related markets if investor appetite for such assets wanes.”
Luckily, we do not have to guess here. We just have to look at the most recent sell-off in September-October of 2014. Despite a moderate decline of just 1,500 points on the Dow, the liquidity did dry up at that time. That is to say, should a larger 10-20% sell-off develop over the next few months, it would be wise to anticipate the liquidity to vanish and declines to accelerate. This does not bode well for the overall market.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014/15-2017. 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 2014/15-2017 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. February 23rd, 2015 InvestWithAlex.com
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Just How Big Is China’s Bubble? This Will Blow Your Mind
We often talk about how out of touch with reality China’s massive credit and economic bubbles are (see below). However, when we start talking about $15 Trillion here and $21 Trillion there we oftentimes lose touch with reality as such numbers become too big to comprehend.
The chart above looks at the subject matter in a different fashion. Between 2011-2013 China has used more concrete than the US has over the last 100 years. And while some might see this as evidence of an economic miracle, I will take the other side of the trade. This unbelievable boom in concrete use is a symptom of capital missalocation, malinvestment and a giant credit bubble that is ready to blow.
Here are just a few more bits about China that should scare the bejeezus out of you.
- Chinese corporate borrowers owed $14.2 trillion at the end of 2013 Vs $13.1 trillion owed by U.S. corporations.
- This means that as much as 10 percent of global corporate debt is exposed to the risk of a contraction in China’s informal banking sector.
- Cash flows and leverage at Chinese corporations are the worst among global peers, having deteriorated from being the best in 2009.
As I have mentioned in the past, most of China’s economic growth over the last 5-6 years has been financed by massive credit expansion. The likes of which we have never seen before. The result?
- $21 Trillion Debt Mountain. Roughly the same size as the entire US Banking Sector. It took the US 220 years to get to that number, it took China just 5 years of explosive credit growth.
- $6 Trillion In Shadow Banking. Actually, no one knows how large this number is. I have read good data/reports putting this number at $10-15 Trillion range.
- Empty cities, shopping centers, massive speculative bubble in real estate, built out infrastructure, rising cost of labor and export driven economy.
How much longer can this go on? Well, that’s a Trillion dollar question…..or a $40 Trillion dollar question. Apparently, it is already unraveling. Either way, one thing is for sure, this will not end well nor will it end in an orderly fashion.
Just How Big Is China’s Bubble? This Will Blow Your Mind Google
Investment Wisdom Of The Day
Don’t confuse bull markets with brains. There are times when you just feel you’re the stupidest person in the world and you’ve got to persevere through it. I like to sense whether a person is that kind of person, whether they’re just going to shrink and fold when they’re just on a cold streak or if they’re going to rise to the occasion, work harder, maintain their composure, and overcome. – Art Samberg
Is The Stock Market Already Pricing In The Next Round Of QE?
I continue to maintain that the overall stock market has disconnected from any sort of fundamental reality quite a while ago. As the chart above suggests, a multitude of economic indicators are pointing lower, earnings and revenue guidance has been adjusted down as of late, baltic dry index is sitting at a 30-year low, etc… The question is…
Why is this divergence developing and what will the outcome be?
There are two possible scenarios. First, it is reasonable to assume that neither the economic data nor earnings will improve going forward. On the contrary. If that is the case it would be reasonable to assume that the stock market is setting some sort of a blow off top before reversing and catching up to reality.
The other possibility is, the stock market might already be pricing in the next round of QE. That’s right. As outlandish as it sounds, it would confirm my overall thesis that the US is on the verge of a massive recession and that the FED will have a very difficult time raising interest rates in this environment. This would explain the divergence.
Unfortunately, for the stock market the outcome is singular as it would have to correct in a major way. The two scenarios described above impact the timing, but not the ultimate outcome.
Is The Stock Market Already Pricing In The Next Round Of QE? Google
Two Hedge Fund Managers Discuss The Stock Market, Currencies, Commodities & Investment Ideas – Weekly Podcast
ALL NEW & FRESH: February 21st, 2015: We have a great show for you this week. Hedge fund managers Matthew Demeter and Alex Dvorkin discuss the following topics….
- What the stock market is doing and what we expect to happen over the next few weeks.
- COT Report and what the big guys are buying. Listen to make sure you are not on the wrong side of the trade.
- Swiss Frank, Australian Dollar, Interest Rates, Gold/Silver, Oil, Bond Yields, Copper, Agriculture, Natural Gas and what we expect to happen in these markets.
- A multitude of great investment ideas and various tops/bottoms that can make you a ton of money.
- And of course, much…..much more.
Don’t miss this one and join us again next Saturday.
Listen to the podcast by clicking on the player above. If you prefer iTunes, please Click Here
The Math Behind Identifying February 2nd Bottom
2/20/2015 – A positive day with the Dow Jones up 155 points (+0.86%) and the Nasdaq up 31 points (+0.63%).
In my weekly update to my premium subscribers on January 31st, 2015 I have identified February 3rd, 2015 (+/- 1 trading day) at the Dow 17,050 (+/- 50 points) as a possible turning point. Further, I suggested that if the Dow is to stop there and reverse, it would be highly likely we experience a substantial bounce. Just as we have.
So, how did I do it? In two steps.
- A number of powerful cycles arrived between February 2nd and 3rd. That meant one of two things. The Dow would either break below 17,000 and accelerate lower -OR- it would turn around and stage a bounce/rally. What cycles? It would be impossible to describe in this short summary, but you can learn more about it in Timed Value.
- My multi-dimensional mathematical calculations showed that the move between December 26th top and February 2/3rd bottom, October 16th low and February 2/3rd bottom, etc….(there were many others) would be exactly equal to prior moves. Suggesting a powerful point of force (possible turning point).
The result is now evident. The Dow bottomed on February 2nd at 17,037 before turning around and staging a massive 1,000 + point rally. Thus far. If you would like to find out what happens next, please Click Here.
In the meantime, John Hussman believes the stock market is so overpriced at this juncture that your return over the next 10-years will be a big fat ZERO. Hussman: Get Ready for 10 Years of Near-Zero Returns on Stocks
“Equity valuations — on the most historically reliable measures we identify — are now fully 117 percent above their pre-bubble norms, on average”
I would have to agree with John on almost everything but the actual print on the Dow 10 years from now. My mathematical and timing work suggests that we will be a lot higher than 18,000 by 2025. Mostly due to inflation, not fundamentals. The trick is to realize how we get there. For instance, those who expect this bull market to continue for the foreseeable future will be utterly disappointed. So will the bears who expect this market to collapse. The truth, as always, is somewhere in the middle.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2014/15-2017. 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 2014/15-2017 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. February 20th, 2015 InvestWithAlex.com
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
How Meditation Can Help Your Trading
A great article on the subject matter from Bloomberg and I highly recommend that everyone reads it. To Make a Killing on Wall Street, Start Meditating.
I have been seriously meditating for over 7 years now and I swear by it. Most people don’t have the slightest idea of how stressful it is to be involved in the money management/trading business. In fact, I continue to maintain that it is one of the most challenging professions out there. And while some people turn to drugs, alcohol, partying, hookers, gambling and other destructive/compulsive behaviors, for me meditation is the only healthy (and free) option.
Listen, most people will gain a competitive advantage on Wall Street NOT through superior knowledge…..you can teach a monkey to read a balance sheet or a chart…..but through their psychological make up and patience. In other words, your brain can either be your best friend or your worst enemy. Simply put, meditation, over time, turns your brain/being into a powerful weapon when it comes to trading and/or investing.
Plus, there is a number of additional benefits. Wisdom and a potential enlightenment immediately come to mind. As a quick note, don’t follow anyone or get a “Guru”. Just close your eyes and destroy your mind. It’s the best drug out there. I highly recommend it.
