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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
Please click HERE to read a synopsis of my view of the financial situation.

Thursday, October 13, 2016

Gold Miners - What next?

As a refresher, I put quite a bit of emphasis on a tried and true long term stock purchasing guide that is described in post "Long Term Investment Trading signal".

Gold miners after CRUSHINGLY punished for years I believe hit a bottom in January 2016 for years to come.

Since then miners exploded up over 250% from low to high this year, and recently had a tear-your-face-off pullback.  Does that mean gold miners are dead? Hardly.

Lets take a look shall we?

Notice the weekly SMA is still on the upswing, and the downswing for GDX has held above the 50 weekly SMA.  This was a brutal, but normal pullback.

What stocks to consider? Depends on your risk-to-reward.
Lets assume GDX hits 35 by march...

GDX/GDXJ - lower risk, ETF across miners (major/minor)  Profit ~50%

Call options on GDX for far out, I purchased 20 GDX calls for March 2017 strike 23.
Risk: very high, options can go worthless.  but if GDX hits 35 by then, will be a 500% profit.

Another way to get higher % with somewhat less risk than stock options is buy stock in the sector that is cheap and therefore potential higher % returns
TGD - 0.48 a share, was $3 in 2013
NAK - 0.60 a share, was $12 in 2008 & 2011.
GSS - 0.78 a share, was $4.50 quite a bit between 2004-2011

some that have already run...maybe more
HMY in september 2015 was 0.82, now $3
AU in september 2015 was 6.60. now 13.70
AGI in september 2015 was 4.50, now 7.70
There are quite a few runners if you look.
My hope is this next push up, those that did not run up before will now.
Good luck

Wednesday, June 15, 2016

Market Charts - Food for thought

I have posted about long term trading indicator, using 20-50 Weekly Simple Moving Average.
If you haven't read about it, please do.  Charts below for trading ideas.

Wednesday, May 11, 2016

Baby boomer dwarfing economics

This video is accurate on the economic distortion that is occurring for a wide variety of reasons.   The net effect is likely the aftershock will hit all post baby boomer generations.  
I do not characterize this is happening as some sort of baby boomer scheme to fraud everyone else as this video asserts.    Instead the end economic upheaval caused by exponential change caused by technology is the root of the issue. 
The baby boomers in position of influence are reacting to keep what they perceive as normalcy.   The net effect is this distortion, video gives good thought, but low on facts and high at demonizing.   Look past these spins.

Sunday, May 8, 2016

Panama Papers

The Panama Papers is the world's largest information leak, far greater than Snowden in terms of sheer information volume.   The information is from an offshore law firm that specializes in offshore companies to hide money from taxation from any country.   The people that use this law firm is politicians, entertainment stars, sports stars, successful business people, companies, pretty much anyone that has enough wealth to need their services.
To me again this is nothing new, pretty much anyone with thought on this topic new this type of service had to exist.
What is important is attitude.    The smaller people are getting bolder, Snowden, this person, and others are becoming more common.   Wikileaks is providing an avenue that smaller people take risk to expose illegal activity.    There is a convergence of information distribution and economic strain.   Both are caused by technology.
In my #marchoftherobots series I show a future of low employment opportunities, this is the cause in economic gap, not tax dodging.   Not that tax dodging helps the smaller people :).  I see this as part of the evolving breaking point of the global economic model based on debt.  Still, great read!   This is way better than fiction dramas on TV.

Saturday, May 7, 2016

Technology, not China cripple manufacturing jobd

I am sure people can find specific instances China through corruption has unfairly decimated a company of sector of us manufacturing.   But I do firmly agree the overall trend and driver has always been manufacturing.   China has only accelerated economic pressure to us manufacturing to lower production costs, resulting in job loss overall.   This video dies a great job of doing a drive by summary.  #marchoftherobots

Saturday, April 30, 2016

Reinventing the economy

I just discovered how to blog from my  phone.   Expect more posts, but shorter ones.     I agree that really big money is going to own things and not go public to retain money generation.   If you look at marginal companies like Dell you see this happening already.    That will leave the average person no way to put money into the stock market and get a return they desire.   Very good video for local companies to move closer to the sharing economy model.

Wednesday, April 27, 2016

Is the theory market still topped for 18 months in-tact

Back in January I posted US Stocks have topped for at least another 18 months and subsequently Disturbing Graphs .

View can change with new information, so what is the current thought?
At the moment the prediction market topped for 18 months remains intact....until proven wrong with new market highs.

I put together a bunch of charts using long term market indicator to evaluate where we stand.
I cover the S&P 500, interest rate, gold, and other sectors

To the charts!

Wednesday, April 13, 2016

China, the elephant in the room

This is one of those occasions being right isn't great.  I did predict in 2008 that the forces of China on USA labor would make cost of living higher while suppressing wages, mission accomplished!

I posted many times since then how China would NOT save the world economy.  Here we are in 2016 and many people are arriving at this conclusion now.   The uncertainty this brings is unprecedented in such a large global economy.  We have all reaped the benefits of cheap Chinese products.  Pretty sure every electronic item I own ows 80% or more of the parts from China.

Ran across some videos today. the first one is excellent to bring to attention the demographic miracle is over.  It touches on the age problem briefly, but I have covered this many times before. The one child per couple law has dwarfed the demographics so much, the old will clearly outnumber the young for decades to come.

Also moving forward I see robotic manufacturing and small custom manufacturing exploding back into local economies, as I covered before in MarchOfTheRobots

Second video touches on the Panama papers, and how Chinese are exporting their wealth to safety.

I still think USA may want China and Russia to take a greater part in the current currency system so they can share greater pain when it is replaced as I posted in "The Hard Road must be taken".

Friday, February 5, 2016

Disturbing Graphs

When viewing these data points, which is more likely, 20% rise in US stocks in year ahead, or 3% or more loss?   It is impossible to know, but be prudent!

Baltic Dry index measures shipments of dry goods, tad bit disturbing.

Commodity prices vs Nasdaq

With US stock market at record highs, 1 in 7 Americans rely on foodstamps

Manufacturing and new orders are trending negative.

See full detail on this market trend indicator by clicking here:

Fear play, Gold, or some the safe play (nothing is safe...) seems to be bottoming, 3 month chart below.

Detroit was last massive failure in USA, next up, Chicago.
The fed is targeting to go Negative on interest rates.  You pay the government to buy their bonds, dare I say if they are talking extreme measures now, they see risk.

See my post January 8th on Stocks have topped for 18 months for more on indicators of a top.

Friday, January 8, 2016

US Stocks have topped for at least another 18 months

I am making the call, we have seen a Stock Market high that will not be breached for another 18 months, that is about July 2017 at earliest.    Could be as late as 2020 for markets to return to these levels, who can really say.

Now if you know me, and read here, I have been a bear too long here, and so this is kinda like the boy who cries wolf enough is eventually right.

In post Long Term Investing Signal I pointed out an independent metric you can use to detect market direction changes.  This indicator has been pretty reliable since the 1970's if not before.
The cross happened in October, but wasn't convincingly crossed until the close of the market today.

This bear market is much different than 2000 or 2008, and therefore is much more unpredictable.
In 2000 the USA hyped up the market on tech, and the bubble popped.
The response was the Fed inflated housing through low interest rates and failure of Bush administration to do any regulation on fraud mortgages.   ( See Blame Game ).
That time the world took a heavy dive, but the cause-effect was targeted.  The housing popped, so cover-up and fix the mortgage derivatives.  Part of the solution was to reduce interest rates that have been falling since 1982 even further.

The Fed brought rates to historic lows, and recently increased rates by 0.25 percentage points.   The 'easy' money injection method has just hit the end of the road.

China committed financial fraud dwarfing all of humanity's history.   Recently they started to unravel and all the economic ties are affecting, notably resources.

As economic strains increase, countries focus EXTERIOR rather than interior.  The result is now Saudi Arabia vs Iran, North Korea vs the west, and Russia challenging USA military positioning.   Unfortunately as the financial impact expands, I expect these friction points to increase.

In USA, we still have fraud accounting, suspending mark to market accounting in place since the 1940's in March 2009.  Anyone who tells you our balance sheets are sound are using a broken measurement.  The tool was changed to mark to fantasy, and we are guessing on our financial soundness.

So why all the drama here?
The world governments have interest rates at near zero.  The world has inflated stock markets across the board to near highs.   Housing in many countries are near highs.  Natural resources are at historic lows.  The 'easy inflate economy' buttons have been pushed.  The next easy button is global currency wars, and China is leading the charge.  Some may argue they are not devaluing the Yuan but rather the rich are exporting their wealth.  In any event, the currency hot-potato will begin, the final end game is if-when the USA dollar takes its turn at collapse.  I suspect that will begin January 2017.

I actually am very optimistic of USA chances for a record bounce back after this plays out, but that will depend heavily on politics.

Taking emotion out of this, and using long term indicators, the chart is in.
Click this link to understand this chart.
Sell your stocks? Why not take 50% out after such a nice run for 7 years with a market 300% up?   Where to put it? I really cant say, 10 year Fed bonds are 2.2% and cant fail.  I can say pay off your debts, invest in reducing costs, this is the best action in times of stress.

To the chart Blue line high, orange low is a bear market.  Orange high blue low is a bull market.  A cross of more than 2% is material, and we are hitting that right now.

UPDATE: 1-10-2015
US Currency and global interest rates are the next act in this evolving story.
Of particular note with the FED raising rates recently, we may have seen generational low in interest rates.  If this plays out, again, easy money is behind us.  We had interest rates dropping from 1982 until 2015, thats a pretty good run, and another stresspoint to pile into the others.