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Asian Markets Take A Beating

With Asian markets and copper taking a severe beating overnight, is this a simple correction or a start of a new trend? In our view, this is the beginning of the end for this expansion cycle in both the emerging markets and the US. China sitting on a massive pile of dirty debt, miss allocation and a massive speculative bubble in real estate, Japan’s Abenomics are about to backfire and the US is completing it’s bull market cycle as we speak. In short, the future looks bleak. While this will not be a directional move, expect this trend to continue over the next few years.  

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Asian Markets Take A Beating  Google

Ongoing worries over China’s economy weighed Asian equity markets down on Wednesday, while overnight losses on Wall Street further ignited a flight-to-safety.

Copper was given the spotlight for the day as prices fell to their lowest level in nearly four years overnight. Selling was intensified by worries about cooling Chinese demand and the liquidation of inventories used for finance deals.

Tai Hui, Chief Market Strategist Asia at J.P. Morgan Funds, told CNBC’s Asia Squawk Box, “The timing of this volatility coincided with a level of pessimism on China that we haven’t seen for quite some time.

(Read moreTraders watch to see why copper getting scorched)

“As a result, people are starting to backtrack every step along the way. In that sense, the collateral use of copper, steel and iron may be more of a negative story in the near term,” he added.

Wall Street shares declined on Tuesday on commodity jitters, while concerns about Ukraine lingered and investors awaited signals on the state of the economy.

The Dow Jones Industrial Average dropped 0.4 percent, while the S&P 500 shed 0.5 percent. The tech-heavy Nasdaq declined 0.6 percent.

  Name Price   Change %Change
NIKKEI Nikkei 225 Index 14830.39
 
-393.72 -2.59%
HSI Hang Seng Index 21901.95
 
-367.66 -1.65%
ASX 200 S&P/ASX 200 5384.20
 
-29.64 -0.55%
SHANGHAI Shanghai Composite Index 1997.69
 
-3.46 -0.17%
KOSPI KOSPI Index 1932.54
 
-31.33 -1.60%
CNBC 100 CNBC 100 ASIA IDX 6963.23
 
-109.99 -1.55%

 

74% Of Americans Believe The US Is Still In Recession

That’s staggering. Just think about it. The stock market is up over 150%, the FEDs expanded their balance sheet by over $1 Trillion, the real estate market is enjoying its “dead cat bounce”, the unemployment is down to 6.6%….yet 74% of Americans believe we are still in recession. Of course, the gains we have seen over the last 5 years have disproportionately benefited the rich due to their access to cheap credit and their ability to speculate.  

The question is, what happens when the US actually falls back into a severe recession of 2014-2017 that we are predicting here? (Based on our timing and mathematical work) 

Will the Amercian public finally turn off the “American Idol” or “The Biggest Loser” and start asking questions about the US Economy and who is responsible? That would be nice, but I have my doubts. Even some of the most sophisticated investors that I talk to do not have a grasp of what is happening within our economy or our financial markets.  As such, I would expect this cycle of boom, bust, money print, boom, bust, money print…..to continue for the foreseeable future. 

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74% Of Americans Believe The US Is Still In Recession Google

 

Seventy-four percent of Americans believe that the nation is still in a recession, which may be a sign that the lower and middle classes are still anxious about unemployment, the value of their homes and stagnant wages.

 

In a new Fox News poll, when asked “For you and your family, does it feel like the recession is over, or does it feel like the country is still in a recession?” only 22% said they believed the downturn had ended. The 74% is better than the 86% from the poll in September 2010, but only barely, if the “improvements” in gross domestic product and unemployment rates are taken into account.

The results are troubling if people’s beliefs affect their behavior. It has been assumed that as unemployment fells and home prices made a modest recovery, Americans would become more likely to be aggressive consumers. But recent data tell otherwise. Holiday sales were poor by most measures. There is little sign that the median household income of Americans has moved much above the $51,000 that the Census Bureau reported for 2012, and in real dollars this is down from a decade ago. A recent Pew study found that:

But starting in the mid- to late 1970s, the uppermost tier’s income share began rising dramatically, while that of the bottom 90% started to fall. The top 1% took heavy hits from the dot-com crash and the Great Recession but recovered fairly quickly: according to Emmanuel Saez, an economics professor at UC-Berkeley, preliminary estimates for 2012 (which will be updated next month) have that group receiving nearly 22.5% of all pretax income, while the bottom 90%’s share is below 50% for the first time ever (49.6%, to be precise).

While there is no direct link between the two studies, the results from the Pew research may help explain the Fox News poll results. Apparently, many Americans feel left behind whatever recovery has happened — or they do not believe the recovery ever happened at all. 

IPO Insanity

Earlier today I wrote about the IPO Market and how 74% of all IPO’s are not making any money. You can see that blog post here. Here is the visual representation of the same for your consideration. As they say, sometimes picture is worth a thousand words. If you are playing in the IPO market I hope this chart will force you to reconsider. 

ipo market investwithalex

Stock Market Update. March 11th, 2014

Daily Chart March 11, 2014 investwithalex

3/11/2014 – A fairly strong down day with the Dow Jones down -67 points (-0.41%) and the Nasdaq down -27 points (-0.63%). 

There is now a noticeable divergence developing between the Nasdaq and the Dow. With the Nasdaq breaking an important short-term low around 4,310…. indicating further downside to close the gap that was opened up on March 3rd at around 4,280. While the Dow is hesitant to follow just yet, the next few days are incredibly important for short term market developments. 

Plus, while the long-term picture and trend remain incredibly bullish it is not indicative of where the market is today. As I have mentioned many times on this blog, we are fast approaching an inflection point where this fast moving 5-year bull market will very soon turn into a vicious bear market of 2014-2017. To read the full report on the upcoming bear market please Click Here and select our stock market report.  

If you would be interested in finding out the exact composition and timing for the upcoming bear market, please Click Here.  

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Stock Market Update. March 11th, 2014 Google

The Secret To Beating The Market & The Street.

wealth-investwithalex

Just give it up. You are not going to be able to do it. Why? Here is why…

“Virtu, a high tech, high frequency trader, makes markets in more than 10,000 securities across 210 exchanges. According to the Virtu S1, in 2013 it had revenues of $664.5 million and net income of $182 million. Virtu said it ”had only one losing trading day during the period depicted, a total of 1,238 trading days.”

Let that sink in for a second. These guys had 1 losing trading day over the last 5 years and that is who you are competing against. How is that possible? Well, in this particular case the market is rigged as Virtu is able to make a few pennies here and there with no risk. Eventually, those pennies add up to massive gains as the article above indicates. And that’s who you are competing against. Day in and day out. 

Well, that’s not entirely true. There are a few things you can do to come out on top. 

  1. Just invest an index fund and forget about it. Keep adding money on a fixed schedule, keep the cost low and you will come out way ahead. 
  2. Become a Warren Buffett type of a stock picker. Takes a lot of work, but anyone can do it. 
  3. Become a market timer. If you can predict what the stock market is going to do you going to be able to minimize risk while setting yourself up for over sized returns. 

While we used to do #2, we now specialize in #3. If you would like to learn more, please Click Here

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The Secret To Beating The Market & The Street Google

Unprofitable IPOs Don’t Scare Investors…Great

As WSJ reports, 74% of all IPO’s today are not making any money and/or are not profitable. Guess when that happened before?  That’s right, right before the 2000 Nasdaq collapse. 

But don’t worry. It’s different this time. After all, the investors are “NOT Scared” this time around….whatever that means.  This is just another indication that the bear market is about to start and destroy bulls. Particularly, those playing in the IPO market. Earlier today I posted a good “Short List” that should get you started. 

Since January of this year I have argued that the Dow Jones topped out on December 31st 2013 at 16,588. We continue to maintain this position as it is based on our precise mathematical and timing work. With the Dow pushing this level again, it is up to you to figure out what happens next. However, if you would like an exact breakdown and bear market composition of (2014-2017) please Click Here.  

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Unprofitable IPOs Don’t Scare Investors…Great Google

A hot IPO market isn’t necessarily an optimistic development for the aging bull market.

Companies are going public at a pace reminiscent of the 1990s Internet heyday, a positive sign for young companies aiming to cash in on the rallying stock market. But analysts say the underlying mix of companies rushing to go public represents a warning sign for the stock rally.

Some 74% of companies that went public over the past six months weren’t profitable, the highest level since March 2000 when about four out of five new companies were money-losers, according to Jason Goepfert, founder of Sundial Capital Research and author of the SentimenTrader Daily Report. That same month, the Nasdaq Composite peaked before tumbling into a deep bear market as the dot-com bubble burst.

Since 1990, 42% of companies that have gone public, on average, haven’t been profitable, Mr. Goepfert says. In the early-to-mid 1990s less than 1/3 of these companies didn’t generate profits. This percentage rose through the tech bubble, fell afterward and rose again through the 2007 market peak before tumbling to as low as 15% in October 2009, seven months after the bear-market bottom.

In the past several years the percentage of unprofitable companies going public has hovered predominantly between 55% and 65%. It moved back above 70% early last month.

“This kind of behavior is troubling,” Mr. Goepfert said. “Not only do we have a willing public market ready to provide capital to these companies, but in many cases these are instances of professional investors selling their claims to a less-sophisticated public,” he added.

The list of newly minted money-losing public companies in the past six months includes microblogging platform Twitter Inc. and cybersecurity firm FireEye Inc.FEYE -0.08%Twitter shares have more than doubled off the IPO price; FireEye has more than quadrupled.

Investors don’t seem too perturbed by the trend. If anything, recent IPOs boast better returns than the broader market. The average U.S. IPO this year rose 19% from its debut through Feb. 28, and 5% from where it closed after its first day of trading, according to Dealogic. The S&P 500 index, meanwhile, has edged only slightly higher for the year.

To be sure, the IPO market has a long way to go before reaching tech-bubble levels. In the first two months of this year, 42 companies went public in the U.S., compared to 77 in the same period in 2000, according to Dealogic.

That’s why many stock investors aren’t willing to turn bearish right now.

In his weekly commentary, BlackRock strategist Russ Koesterich didn’t sound enamored with stocks, but he still considered them to be better than other alternatives.

“To start, we would say equities are no longer cheap and that stronger economic growth will be needed to drive earnings and prices higher,” he said. “But we do believe stock prices are more likely to head higher rather than lower from here,” Mr. Koesterich added, while cash investments “are effectively paying nothing, and traditional areas of the bond market offer little return after factoring in the effects of inflation and taxes.”

Even with a pricey stock market and an increasingly frothy IPO market, the fact that inflation and interest rates are low and the economy is gradually improving offers “sound arguments for overweighting stocks,” he says.

Morning MoneyBeat Daily Factoid: On this day in 1888, a brutal blizzard smacked the Northeast, resulting in a shutdown of communication and transportation lines along the U.S. Atlantic Seaboard. More than 400 people died from the storm.

Ukraine Wants The US To Get Into A War With Russia

Why are we supporting these idiots again? Oh, right, freedom, liberty and justice for all. Especially the Ukrainians who would like nothing more but to get America involved into yet another war that would cost the lives of thousands of American soldiers. Right…..

The new and illegitimate Ukrainian government makes it very clear. They want the US to interfere militarily. I hope no one in our administration is even considering this action. Doing so would trigger a massive war with Russia. I guarantee you that. Plus, any war with Russia would be a little bit more difficult than blowing up a 1984 Toyota Pickup full of Taliban fighters. 

It is time the US stops meddling in the business of other countries and starts paying attention to the US Economy and our own future.  

usa vs russia investwithalex

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Google

Ukraine forms new defense force, seeks Western help

KIEV/SEVASTOPOL (Reuters) – Ukraine’s interim leaders established a new National Guard on Tuesday and appealed to the United States and Britain for assistance against what they called Russian aggression in Crimea under a post-Cold War treaty.

Blaming their ousted predecessors for the weakness of their own armed forces, acting ministers told parliament Ukraine had as few as 6,000 combat-ready infantry and that the air force was outnumbered nearly 100 to 1 by Moscow’s superpower forces.

There was no let-up in the war of words, with the pro-Russian regional parliament in Crimea approving a declaration of independence that will take effect if people on the Black Sea peninsula vote to unite with Russia in a referendum on Sunday.

The national parliament in Kiev said it would dissolve the Crimean assembly if it did not cancel the plebiscite.

Viktor Yanukovich, whose overthrow last month after protests triggered the gravest crisis in Europe since the Cold War, insisted from his refuge in Russia that he was still Ukraine’s legitimate president and commander of its armed forces.

Lavrov: Russia has proposals to resolve Ukrainian  …Play video

Lavrov: Russia has proposals to resolve Ukrainian  …

Acting Prime Minister Arseny Yatseniuk, who will visit the White House and United Nations Security Council this week, said a 1994 treaty under which Ukraine agreed to give up its Soviet nuclear weapons obliged Russia to remove troops from Crimea and also obliged Western powers to defend Ukraine’s sovereignty.

He said a failure to protect Ukraine would undermine efforts to persuade Iran or North Korea to forswear nuclear weapons as Kiev did 20 years ago. The terms of the Budapest Memorandum oblige Russia, Britain and the United States as guarantors to seek U.N. help for Ukraine if it faces attack by nuclear weapons.

DISARMAMENT PACT

Parliament passed a resolution calling on the United States and Britain, co-signatories with Russia of that treaty to “fulfill their obligations … and take all possible diplomatic, political, economic and military measures urgently to end the aggression and preserve the independence, sovereignty and existing borders of Ukraine”.

NATO powers – and the authorities in Kiev – have made clear they want to avoid a military escalation with Moscow, which has denied its troops are behind the takeover of Crimea 10 days ago by separatist forces – a denial ridiculed by other governments.

U.S. Ambassador to Ukraine: Discussion “over& …Play video

U.S. Ambassador to Ukraine: Discussion "over" …

The European Union and United States have been preparing sanctions against Russia, though with some reluctance, especially in Europe, which values commercial ties with Moscow.

Direct diplomacy has stalled this week. U.S. Secretary of State John Kerry turned down an invitation to Moscow until Russia modifies its stance. Ukrainian premier Yatsneniuk said he had been unable to reach either Russian President Vladimir Putin or Prime Minister Dmitry Medvedev for the past five days.

Russia says the overthrow of Yanukovich was a coup backed by the West and that it has the right to defend the interests of the ethnic Russian majority in Crimea, a territory of two million that the Kremlin transferred from Russia to Ukraine at a time when the collapse of the Soviet state was unthinkable.

NATO AWACs surveillance planes were beginning flights over Poland and Romania to monitor events in Ukraine and the U.S. navy was preparing for exercises in the Black Sea with NATO allies Bulgaria and Romania over the next few days.

Yatseniuk, who said he supported efforts to set up a “contact group” of major powers to resolve the crisis, accused Russia of seeking to undermine the world security system:

Russians rally in Moscow to support annexation of  …Play video

Russians rally in Moscow to support annexation of  …

“This is not a two-sided conflict. These are actions by the Russian Federation aimed at undermining the system of global security,” he told parliament.

NATIONAL GUARD

Acting president Oleksander Turchinov said the National Security and Defence council had decided to raise a new National Guard among veterans. He accused Yanukovich of leaving the military in such a poor state that it had to be built “effectively from scratch”.

The acting defence minister said Ukraine had not been prepared for military confrontation with Russia. Having mobilized its forces, he said the country had only 6,000 combat-ready infantry out of a nominal infantry force of 41,000 -compared to over 200,000 Russian troops on its eastern borders.

Turchinov warned against provoking Russian action, saying that would play into Moscow’s hands. The National Guard, based on existing Interior Ministry forces, would “defend citizens from criminals and from internal or external aggression”.

View gallery

An armed man, believed to be Russian serviceman, is …

An armed man, believed to be Russian serviceman, is seen in an armoured military vehicle outside a U …

A partial mobilization would begin of volunteers drawn from those with previous military experience, he said.

Yatseniuk said the government was doing all it could to finance pay and equipment for the armed forces, but that Kiev needed help from Western guarantors of its security.

Western powers have been careful to note that Ukraine, not being a member of NATO, has no automatic claim on the alliance to defend it. But Yatseniuk said the principles of its 1994 nuclear disarmament pact entitled it to expect assistance.

“What does the current military aggression of the Russian Federation on Ukrainian territory mean?” he said.

“It means that a country which voluntarily gave up nuclear weapons, rejected nuclear status and received guarantees from the world’s leading countries is left defenseless and alone in the face of a nuclear state that is armed to the teeth.

“I say this to our Western partners: if you do not provide guarantees, which were signed in the Budapest Memorandum, then explain how you will persuade Iran or North Korea to give up their status as nuclear states.”

George Soros: Banks Are Parasites….I agree.

In his new book “The Tragedy of the European Union” George Soros blasts the banking sector by calling them “parasites” who prevent real economic recovery. He goes on,  “35% of all corporate profits in the United Kingdom and the United States came from the financial sector. That’s absurd.” Mr. Soros is, of course, right on the money, but I will go even further than that. It’s not just the banks. It’s the collusion between the big banks/financials and the government. Until this cartel is broken up we will continue to have these boom/busts cycles where the primary driver behind economic growth (or perceived economic growth) is credit and speculation. 

Too bad. 

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George Soros: Banks Are Parasites….I agree.  Google

George Soros blasts ‘parasite’ banks

George Soros, the billionaire investor, has warned that little has changed since the 2008 crisis in the ‘parasite’ banking sector

George Soros, the billionaire investor, believes the banking sector is a “parasite” holding back the economic recovery and an “incestuous” relationship with regulators means little has been done to resolve the issues behind the 2008 crisis.

“The banking sector is acting as a parasite on the real economy,” Mr Soros said in his new book “The Tragedy of the European Union”.

“The profitability of the finance industry has been excessive. For a while 35pc of all corporate profits in the United Kingdom and the United States came from the financial sector. That’s absurd.”

Mr Soros outlined how the problems that caused the Eurozone economic crisis remain largely unresolved.

“Very little has been done to correct the excess leverage in the European banking system. The equity in the banks relative to their balance sheets is wafer thin, and that makes them very vulnerable.

“The issue of “too big to fail” has not been solved at all.”

The proposed solution of a European banking union does not address the underlying problems, Mr Soros adds.

“A real danger to the financial system is the incestuous relationship between national authorities and bank managements. France in particular is famous for its inspecteurs de finance, who end up running its major banks. Germany has its Landesbanken and Spain its caixas, which have unhealthy connections with provincial politicians.”

In his new book Mr Soros outlines, in a series of interviews with Dr. Gregor Peter Schmitz, how he believes the European Union is in danger of becoming a thing of the past unless its flawed structure is reformed.

The German economy at the regions heart could also be its biggest weakness.

“What was successful in Germany before the crisis will not be successful as a prescription for the rest of Europe in the years ahead.

“In German the word Schuld has a double meaning (both “blame” and “debt”). So it is natural (selbstverstandlich) to blame the debtor countries for their own misfortunes,

“Germany’s tone, is sometimes self-righteous and even hypocritical…. In 2003 Germany was among the first countries to break the eurozone rules. ”

The prospect of Germany leaving the eurozone is very real and it would have serious implications as the euro would depreciate sharply and deutsche mark would go through the roof, Germany would find out how painful it is to have an overvalued currency.

Mr Soros, who famously “broke the Bank of England” by betting against the pound during the 1992 sterling crash, talks candidly about his most successful trade.

“I have a clean conscience. The big events in which I participated would have occurred sooner or later, whether I speculated on them or not.”

Get Your Shorts Ready

It’s not a secret. The stock market in a massive overvaluation bubble that is about to pop. Based on our mathematical and timing work it would be prudent to start getting your short positioning ready for what is to come. And I mean NOW. Below is list of stocks that I deem “highly overvalued and speculative”. It should be a good start. Typically, when the bear market starts such issues decline much faster and further than the overall market. Providing you with out-sized returns.  Good luck and don’t forget. Do you own research and always wait for a breakdown confirmation. 

ALKS, COG, TECH, PINC, AL, ILMN, CELG, RGLD, MA, DDD, V, GILD, SSYS, FLT, TRIP, SBAC, VRTX, AR, REGN, FB, TWTR, VEEV, NOW, N, DATA, TSLA, SPLK, WDAY  

If you would be interested in learning about when the bear market will start and it’s exact composition, please Click Here. 

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Get Your Shorts Ready  Google