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Because the information on this blog are based on my personal opinion and gosh I am so fucking opinionated, it should NOT be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional, preferably both and in that order. My thoughts and opinions will also change from time to time as I learn and accumulate more knowledge,or my meds wear out, or my post coital euphoria passes.

Feel free to comment on my ideas or ask questions in the comments section for the blog entries. Please remember that this is a blog, and you do not need to agree with everything or anything I write (except I am very needy when it comes to my looks...so you have to say nice things). I reserve the right to delete any comment for any reason (abusive, profane, rude, etc.) so please keep the comments polite, unless you are criticising Gold Bugs...in which case go wild....doggie style.

This site is also dedicated to preventing small traders from having their accounts go supernova by listening to Gary Savage. To read more about him, please browse through the posts and also see http://smartmoneytrackerpremium-exposed.com/

Tuesday, February 28, 2017

Blast from the past

I thought I would give grief to someone other than Gary Savage, especially since Gary is doing such a good job making a royal ass of himself.

No, the dodo I am going to focus on is Andrew Maguire. In 2013, Gold crashed. Peak to trough, Gold fell 16% in 3 days.

Quite astounding to say the least. This came on the heels of Andrew Maguire saying that bullion banks were desperate and they were going to lose this fight. He even wrote an article which went into great depths on this price suppression mechanism.

However with the price a good 25% lower than when he wrote the report above, Andrew said “that the crash is solely in the paper gold market … and that there is actually a shortage of physical gold.” Yep. How about I fucked up and I have no clue. Nope. Let's tell everyone that the price is completely wrong and there is a massive shortage of pet rocks. 

In fact the shortage was so fucking intense, that 30 months later the price was another 25% lower. Deep stuff. I shit you not, Gold bugs must have a low double digit IQ to believe people who are so wrong all the time. 

Sunday, February 26, 2017

Bull market end

I have a “gut” target for S & P 500 to reach 2,800. At least. On the high side 4,000 is eventually possible before this bull ends. It is partly based on extremely strong economic fundamentals, improving (higher) inflation, increasing allocation to equities after a 2 year hiatus and the fact that all bull markets end in euphoria.
Currently the forward P/E on the S&P 500 is 17.6. This is overstated as employment, inflation and the weaker dollar will drive earnings much higher than currently expected. We got a good ways to go.

My personal strategy is 70-85% in REITS and 15-30% in Energy in my long term, investing (not trading) portfolio. Once oil reaches $70-$75 it will be 100% REITS. REITS are ridiculously cheap compared to their earning potential at this stage of the cycle. I expect them to give a total return (price + dividends) 15% per year for the next 5 years, regardless of when the stock market tops. London real estate, priced in US dollars is about the same level as at the heart of the 2008-2009 crisis. That is going to be a scintillating weak dollar play....much better than any pet rock, plus you get a 5% yield on it.  

Thursday, February 23, 2017

The bull market in pessimism claims many victims

Malls are dying. Apparently. Everybody seems to know it. As a proud owner 34 different REITS around the world, including 8 Retail REITS, I have to say that this is pure nonsense. To showcase my point I am just going to show you two sets of numbers. They are from Pennsylvania REIT, which despite its name, owns malls outside of Pennsylvania. They show the sales per SQ FT for 2014 and 2016. They are not in the same order as the company has changed its presentation format….but go ahead and find one mall with lower sales per Sq Ft.  
Click on images for larger view. 



It is the same more or less for every REIT I own. Sales are up (top tier malls PEI, MAC) to flattish (lower quality malls WPG, CBL).  The third and fourth tier malls are suffering but 90% of the capital invested today, which is in the top two tiers is doing absolutely fine. 

Wednesday, February 22, 2017

End of the world has been postponed...Again

The 2016 gold rally got a lot of gold bugs excited and the chatter on the various crack pot sites has hit a new fever pitch.  Yeah, they are predicting that Gold will go to the moon and stocks will collapse. True money will prevail! Unfortunately nothing seems to be derailing the stock market and the odds are now massively stacked against the nutjobs for a stock market collapse

When Jan and Feb have both been up....the Calendar year has closed out positive 27 out of 27 times since 1945 with an average return of 24%. 

So FOFOA and the gang will have to just keep writing those 500,000 word essays about Gold going to 18 quadrillion a little longer. 

Monday, February 20, 2017

Baby Bull: How one man spotted 60 of the last zero bull markets: Part 4

Parts 1-3 can be found in the archives.

This is part 4 in this extensive documenting series. I swear, if you guys don’t nominate me for the Pulitzer I am going to bust a nut.

So continuing with Gary Savage's legendary ability to call everything wrong....
Jan 2013...
16) Back then the goals were a bit more modest. Just double or triple your portfolio by 2014 no millionaire or billionaire stuff. Also it was "curve balls" that he was obsessed with and not "balls of steel".

17) Sometimes you have to be thankful for the small mercies. At least this one is labelled in spite of taking off into the stratosphere so I get exactly how much he was predicting.  

18) We were “not” in a secular bull market in stocks in 2013. But he was just telling the shorts to be patient and not avoid shorting all together like he does now.  

19) Gary criticising the talking heads and saying “Folks in the real world it just isn’t possible to have a strong dollar if you are counterfeiting 85 Billion of them a month.” And Yet we actually did. Imagine that. 

Also him doubting the intelligence of "Homo" Sapiens....you really cannot make this shit up. 

20) Finally nuggets of wisdom that put Yoda and Yogi Berra to shame. 

Wednesday, February 15, 2017

Baby Bull: How one man spotted 60 of the last zero bull markets: Part 3

Previous Parts can be read from the archives.
11) Inflationary shock in 2014? The year the price of oil collapsed and the USD went up?
12) The article related to this calls for $160 oil in 2014. Pretty close. 
13) All time highs for Gold. 
 For context, that (Oct 2012) was the last chance to get out.

 14) Got dandruff? There is a head and shoulders top for that. USD was bottoming around then. 
15) Gold price is not being suppressed.

Please don't confuse him with this guy who does not know how to trade, and more precisely, how to trade managed markets.


Gary just put this up:
Linked to this chart

Gary's you little despicable fuck. You are so beyond pathetic that I actually feel sorry for you.
Here is when I put up that ratio bet.

Do you see how GDX:XLE has done since Dickwad?

But wait...It gets better.
Posted here in real time every trade...resulted in me going Long GDX, when Gary is showing me as short the sector.

Tuesday, February 14, 2017

Blaming the Fed/PPT for your short-sightedness

I found this absolutely fantastic piece of data, which shows the breakdown of returns in the largest bull markets. It shows how much the 5 different areas contributed to the total returns.

Some conclusions.
1)    Of the 9 largest bull markets including the current, 6 have had LOWER earnings growth than current. Meaning we had 6 bull markets where earnings increase were actually lower the current and contributed less to the total return.  Again, a stark reminder to all those believe the Fed has “managed” this market, that bull markets regularly occur with lower GDP/Earnings growth than we have had. 
2)    Dividend Yield, Valuation expansion and Inflation are middle of the pack.
3)    Valuation normalization was the second largest among the 9. That means that Stocks at March 2009 were second cheapest ever and hence normalization contributed so much.
4)    There is nothing unusual about this bull market except a giant ass fucking bubble in fear and pessimism perpetuated by sites like King World News, Zerohedge and the Looney tunes “System will collapse” idiots.

Full article can be read here

Sunday, February 12, 2017

Futures: Part 1 :Roll and decay

Contango, Futures roll, Backwardation and Futures vs present prices is a large topic. Hence I am going to try and do it piecemeal.
Here goes.
Futures represent delivery of a certain product that is very specifically defined by the exchanges in terms of grade, location and quality on a certain date (date range).The buyer agrees to buy and the seller agrees to sell it. Another price is the Spot price which is the “current” price for the same item.
Many factors impact the futures price for the closest month vs the futures price of other months. A few of them are
1)    Storage Costs for the commodity
2)    Expected changes in supply and demand in the future
3)    Storage limitations
4)    Interest rates
5)    Short term disruptions in supply and demand.
6)    Harvest times for Ags (Corn, Soybean, Rough RIce etc.)
7)    Potential current or future substitute availability
8)    Producer and Consumer hedging
9)    Central bank manipulation (just kidding J)

Let’s look at a simple fictitious curve of oil from May 2017 to February 2018. Assume currently it is March 2017 and May 2017 is the first available contract, which trades at $45. The cost of storing 1 barrel of oil for 1 month is $1. In the perfect example, the only thing influencing the price of oil is the cost of storage. Hence each month is higher than the next by about $1. 

Let’s say you were a big time speculator and you had $54,000,000 to invest. You look at the curve and decide to buy 1,200 contracts of WTI (1,200 X $45 X 1,000 Barrels per contract) = $54,000,000. We are going to ignore the small commissions. Also because you hate to take leverage, you have the entire amount in cash in your account. Now you are the proud owner of 1,200,000 barrels of oil to be delivered in May.

As the end of the futures contract comes about, (late April), you look at the futures curve and lo and behold, the curve has not moved one bit in this ideal example.  You know you obviously don’t want delivery, so you sell your May contracts and buy June contracts. However when you do this, you just get 1174 contracts for the same amount as the price is higher ($54,000,000/46/1000 barrels).

The Futures curve stays perfectly flat as all of OPEC is frozen in time. Every month you roll your futures forward. By the time you own February 2018 futures, you own 1,000 contracts at $54 vs the initial 1,200 at $45.

Let’s stop here for a minute. During our little exercise spanning 9 months….the price went from $45 to $54, a nice 20% increase. You made 0%. So we see the first example of rolling hurting your returns. The reason is that when you started speculating $54 “was baked into the futures” . In fact you would have done just as badly, if you bought 1,000 contracts of the Feb 2018 futures right at the beginning and held them.

You are feeling pretty silly now, but life throws another curve ball. Just as you are about to roll again, a huge amount of oil is sold from the strategic petroleum reserve unexpectedly. The price drops to $45 within seconds. So here is the other way you lose. You started off with the price at $45 and ended with the price at $45. In an ideal world you should have not lost anything. But you are going to be down 16.67% on your investment as now your $54,000,000 investment is worth $45,000,000.  

To be continued……

Thursday, February 9, 2017

Baby Bull: How one man spotted 60 of the last zero bull markets: Part 2

Mea Culpa for not going far back enough when I started on this.
It seems Gary had some priceless nuggets of wisdom in his oldest archives. Continuing with the 60 examples.

6) Final top in (Bonds) ….in March 2010. Please keep that in mind in light of his recent black swan call. He was at least 7 years early.

7) Gary making fun of people who believe in manipulation. Yep. That happened. 

8) Recession in 2011. Third leg of secular bear market. Fascinating call.

9) Folks, let me tell you that this one is a classic.

10) “Smartmoney” was running out of the stock market and probably accumulating 3X funds. They tend to be a decade or so early….but hey that is the price of being smart. 

Tuesday, February 7, 2017

Baby Bull: How one man spotted 60 of the last zero bull markets: Part 1

How to lose your account in 60 trades
  5 (21%)

Balls of Titanium
  6 (26%)

Baby Bull: How one man spotted 60 of the last zero bull markets
  10 (43%)

Quest for 1 trillion: 4 GDX calls at a time
  2 (8%)

The winning name for our contest name for Gary's book/newsletter as above…. albeit Von Burger had some phenomenal ones which were not included but made me eject my coffee through my nostrils. You owe me a latte dude.

As always to give the people what they want….the next few posts will be titled as the winning entry, with me actually digging up 60 examples of Gary’s genius.

Starting from Feb 2012 

1) Possible USD currency crisis and parabolic move in CRB in 2014

2) March 2012: Gold going to.......sorry I cannot read that.... 90!!!!!!!????  NO wait that is the RSI. Gary is this a log scale above the 1,900? Looks like a log scale...so $19,000 by 2015? Just a 95% miss no biggie. 

And USD going to -25...oh fuck that is the MACD. Is THIS a log scale, Gary?

3) June 2012: Same Shit....but a bit more radical ascent for the CRB. Even the last part of the 2008 run cannot match Gary's vertical ascent prediction. 

4) July 2012: When Gold "had bottomed" and was on it's way to test $1,900.  This unhealthy obsession with burritos has been pretty longstanding from the looks of it.....but I am guessing he lost all the bets and did not pay up.

5) Aug 2012: Fortunately here Gary found the chart vertical length suffice to make his point and did not start running into the indicators.....for that I am grateful. So SPX 650 by 2016? What's 1500 points between friends?

Much more to come in future parts

Saturday, February 4, 2017

Boom or Bust?

A regular topic of contention is whether the economy is booming and hence the stock market is justified, or is it in shambles and the stock market is a casino waiting to crash.

Here are few arguments stated earlier. If MM has another reply, I will add it below the last pic.

Oh yeah, forgot in my response….totally agree on the “Fuck Gary” part.