Saturday, February 28, 2015

Are you a Brain Dead Trader or Just Lucky?

Were you one of the lucky ones? Were you one of 8,909 traders that registered for this weeks fantastic free webinar from John Carter? If not, not to worry. John has made the webinar available as a replay and of course it's still free to watch. This was another game changer as John found a way to make trading options on premium decay understandable by anyone no matter their trading skill level.

Watch the Free Webinar Replay Here

Why did so many traders fight for a spot at this webinar? I think it has a lot to do with the video primer John send us earlier in the week giving us just a taste of what John would show us in more detail at the webinar.

Watch that Free Video Here

In this video John shows us a simple and effective strategy for using premium decay, but he also shows us his strategy to make money on a stock if it's going up or down.

In this webinar John will discuss....

  *  Why trading options are perfect for newbies, retirees, part time traders, and full time traders

  *  Why options are safer than trading stocks, futures or forex while holding on for bigger winners

  *  One strategy he uses for consistent trading results that you can use the next trading day

  *  The brain dead rules to follow so you can know exactly how to trade this one set up for consistency

  *  How traders get sucked into buying the wrong stocks at the wrong price so you never get suckered into a trade again

       And much more….

And John doesn't stop there.....

Get his latest FREE eBook "Understanding Options"....Just Click Here!

Nobody did more in 2014 to change the way traders, investors and fund managers looks at trading options than John did with this one eBook. Get yours right now while it's still available.

See you in the markets!
The Stock Market Club

Friday, February 27, 2015

A Math Free Guide to Higher and Safer Returns

By Andrey Dashkov

I can make you instantly richer, and safely, by explaining a finance concept with a story about a dog.

There’s a hole in your pocket you probably don’t know about. You may feel instinctively that something is wrong, but unless you look in the right place, you won’t find the problem. The money you’re losing doesn’t appear in the minus column on your account statements, but you’re losing it nevertheless.

Frustrated? Don’t be. I’m going to tell you where to look and how to stop the drainage.

Volatility is every investor’s worst enemy. Over time, it poisons your returns. Unlike a 2008 style market drop, though, volatility poisons them slowly. There’s no obvious ailment to discuss with friends or hear about on CNBC. You only see it when you compare how much you lost to how much you could have earned—and looking back at your own mistakes is not a pleasant thing to do.

Here's the Replay of Last Nights Free Webinar....."Options and Premium Decay"

So instead let’s imagine two fictional companies: X-Cite, Inc., an amusement park operator with a volatile stock price that adventurous investors love; and Glacial Corp., a dull, defensive sloth of a corporation whose stock returns are consistent but often lower than those of its more glamorous counterpart.

Average return on both companies’ stocks was 5% for the past five years, but Glacial’s was less volatile. Safety is comfortable, but doesn’t higher volatility mean higher potential returns? Sometimes, but not always. When you accept high volatility, your returns might be higher at times, but they also might be lower. In other words, higher volatility generally means greater risk.

Nothing new so far, but the oft-overlooked point is that boring stocks make you richer over time.
The chart below shows each stock’s annual return over a five year period.

At first glance, Glacial Corp. appears to be the loser. It underperformed X-Cite in four out of five years. Both stocks returned 5% on average during these years, and X-Cite was almost always voted the prettiest girl in town. But for Year 3, it would be easy to persuade investors to buy X-Cite stock. Few would give Glacial a second glance.

Hold for the punchline: X-Cite, the stock your broker would have a much easier time selling you (before you read this article), would actually make you poorer. Let me explain.

I won’t get into any supercharged math here. Glacial is better because it makes you richer eventually. After five years, the total return on X-Cite is 25%. Not bad. Glacial? 27%. If you invested $10,000 in both (assuming no brokerage fees or taxes), at the end of Year 5 you would have earned $2,507 on X-Cite or $2,701 on Glacial.

Year-End Account Balance
X-Cite, Inc.
Glacial Corp.
Year 1
Year 2
Year 3
Year 4
Year 5
Total return

Where does the extra $194 come from? It comes from lower volatility. Although X-Cite looks like a winner most of the time, it has a higher standard deviation of returns. Note that X-Cite’s stock price dropped 12% in Year 3. The following year it increased 7%, while Glacial Corp.’s stock price only increased 5%—yet Glacial is still worth more from Year 3 onward. Why? X-Cite’s 7% jump is based on the previous year’s low.

But I promised to keep this note math-free, so imagine a person walking a dog instead. The shorter the leash, the less space the dog has to run around. The longer the leash, the more erratic the dog’s path will be. Standard deviation measures how much data tend to scatter around its mean—the path. As we just saw, low standard deviation also pays you money.

I could stop right here and hope that you take this lesson to heart, but I won’t. As much as I love describing finance concepts using clever company names and dogs, I want you to start making money right now.

I said this advice could make you instantly richer, and “instantly” doesn’t mean “maybe sometime in the future.” In the latest issue of Money Forever, we shared an opportunity to invest into a vehicle built to outperform the market by managing volatility. I was extremely excited to present it to our paid subscribers because I knew they’d love to earn more by risking less. Who wouldn’t?

So please pardon my blatant self-promotion. I work in an industry where 80% of the time the market is obsessed with the wrong stock, and the noise drowns out the right idea. I can silence the cacophony for you, though, and show you where to find the right ideas. And that goes beyond our most recent pick, although you do need it in your portfolio. Money Forever’s mission is to make your money last—plain and simple.

We think this pick will go a long way toward doing just that.

You can check it out and access our full portfolio immediately by subscribing risk free to Money Forever.

It’s about the price of Netflix, but unlike Netflix we won’t bother you if you decide to cancel. In fact, we’re so confident that the Money Forever portfolio can help you “earn more by risking less” that we’ll refund 100% of the cost if you decide to cancel within the first three months.

And we’ll even prorate your refund after that—it’s a no lose proposition. Click here to start earning more by risking less now.

The article A Math-Free Guide to Higher and Safer Returns was originally published at

Get our latest FREE eBook "Understanding Options"....Just Click Here!

Sunday, February 22, 2015

Free Webinar: How You Generate Consistent Trading Results in Today's Markets

Our trading partner John Carter is back this Tuesday February 24th with another one of his wildly popular free trading webinars. This time John will be covering his trading strategy using "premium decay".

If you have attended one of John's free webinars you know that he has a unique ability to give traders that "over his shoulder" view of how he performs these trades making it very easy to understand.

Best thing of all though, he shows us how this can be done in any size account. Limiting brokerage fees so we can make money even in small accounts.

Get your reserved seat now....Just Click Here

In this free webinar John will discuss....

  *  Why trading options are perfect for newbies, retirees, part time traders, and full time traders

  *  Why options are safer than trading stocks, futures or forex while holding on for bigger winners

  *  One strategy he uses for consistent trading results that you can use the next trading day

  *  The brain dead rules to follow so you can know exactly how to trade this one set up for consistency

  *  How traders get sucked into buying the wrong stocks at the wrong price so you never get suckered into a trade again

      And much more….

Johns webinars are highly attended and usually have a waiting list at start time. Get your seat now then make sure you log in 10-15 minutes early on Tuesday evening to make sure you keep that seat.

Follow this link to get your spot before this webinar is fully subscribed.....Sign Up Now

John has provided a great free video primer for this webinar.....Watch it Now

See you Tuesday!
The Stock Market Club

Get our latest FREE eBook "Understanding Options"....Just Click Here!

Chris' New Video Reveals Why 2015 is Going to be Big

The S&P 500 stock market has been under heavy rotation since mid 2014. Rotation in the stock market is when the trend sharply changes direction from an uptrend to a downtrend or vice versa. Depending how the price moves during these rotations this algorithmic trading system which Chris Vermeulen runs can generate large profits if the price action is favorable for the trading algorithm.

Unfortunately the second half of 2014 the stock market rotation moved in a way that was very difficult for the trading algorithm to generate trades but no trades are better than losing trades so its not the end of the world. But what Chris wants to show you in this video is how the current price action we have experienced since mid-2014 till now is the same price action and has similar characteristics that we saw in 2010 and again in 2011.

2015 is going to be a stellar year for his trading system!

This price pattern has led to substantial rallies in the stock market of 20% to 35% gains over a six-month period and its looks like it may happen again.

Chris' AlgoTrades algorithmic trading system does struggles during these rotational periods but so do CTA's and other money managers. There is not doubt that it has been hard to profit with the swings in the market because of the way they happened. When this phase of the market completes and a new trend emerges the trading algorithm will excel and pull substantial gains out of the stock market on autopilot just like it did in the first half of 2014.

Both times the stock market has formed these formations the algorithmic trading system pulled 64% ROI in 2010 and pulled 78% ROI 2012. 

Watch the video to learn more.....

Algorithmic Trading System

Visit Chris Vermeulen's Website to Learn more Algo Trades

Get our latest FREE eBook "Understanding Options"....Just Click Here!

Thursday, February 19, 2015

Simple Strategy Alert: Premium Decay

We all think we know what premium decay is right? Well, I thought I knew how it worked until I watched this new video from our trading partner John Carter of Simpler Options. I never knew just how powerful and simple it was to apply knowledge of the decay principal to trading options.

Basically it's a way to insure the health of your portfolio even in an unhealthy market.

In this free video John shows us a simple and effective strategy for using premium decay, but he also shows you his strategy to make money on a stock whether it's going up or down.

Here's a sample of what John will share with us.....

  *  How to “control” stocks for a fraction of the price so you don’t risk all your capital - How you can
      generate consistent returns being dead wrong

  *  What “premium decay” is and how you can use to it to give yourself an edge in trading

  *  How you can set up occasional home run trades while generating consistent returns

  *  A handful of the key stocks I look at every day so you don’t go bug eyed looking for stocks to trade

Don't miss the game changing video "Simple Strategy Alert: Premium Decay"....Watch Video Now

John Carter has become well known for his wildly popular free options trading webinars and his free options trading eBook that changed the way traders looked at options trading in 2014.

Download the free eBook HereWhile you still can!

Wednesday, February 18, 2015

Doug Casey on ISIS, Gold, Crude Oil, and What to Expect in 2015

By Louis James, Chief Metals & Mining Investment Strategist

Today's feature is a special treat: a peek into the brain of one of the most successful speculators of all time. In what follows, Doug Casey talks to Louis James about what to expect in 2015. Doug weighs in on today's most important issues, including ISIS, oil, Putin, and the stock market. He even sticks his nose out to make a bold call on gold.

This (usually subscriber only) content originally appeared in The Casey Report.......Enjoy!

Louis James: It’s been a long, eventful quarter since we last spoke, Doug. What’s most on your mind as 2014 draws to a close and we look ahead to 2015?

Doug Casey: Let’s start with gold, since that’s the main focus we’ve had for so long. The Swiss gold reserve referendum just went down in flames, of course, and that was a big disappointment to many.

L: Really? I don’t know anyone who was surprised.

Doug: Well, surprise and disappointment aren’t the same thing. I’m constantly disappointed by how stupid people are, but I’m never surprised by it. There were early signs of support for the measure, but the powers that be mounted an immense propaganda campaign against it, and they succeeded. I hear that the balance sheet of the Swiss central bank has expanded faster than that of any other central bank in the world—

L: Whoa—that would explain a lot.

Doug: Yes. Relying on the Swiss franc to preserve your capital today is like relying on Swiss banks to preserve your privacy. Only fools would trust in either at this point. Despite that, Switzerland may still be sounder than any other country in Europe—which is really saying something about how bad things have gotten in Europe.

L: I’ve learned from you, Doug, not to pay too much attention to gold’s daily fluctuations, but I have to say that it was a singular day the Monday after the Swiss referendum failed. Gold dropped like a rock the moment it started trading, but quickly reversed and kept rising and rising all day long, making an $80/ounce swing from trough to peak. Did you notice that, and what do you make of it?

Doug: I suspect short covering; too many people were short because they expected the referendum to fail and then had to cover. Those inclined toward conspiracy theories may say that the initial retreat was “da boys” hitting the paper gold market with thousands of gold contracts in the middle of the New York night—timed perfectly to coincide with the Swiss vote. If there were any truth to that, the people promoting the notion would all be billionaires. But they’re not.

L: I understand your position that it could have been private players doing the same thing for profit, but let’s suppose for a moment that the government conspiracy is real. If so, the fact that gold buyers swamped the selling and pushed the price higher that day shows that the conspirators can at most influence gold, not control its price, and there’s hope in that.

Doug: I don’t believe in the conspiracy theories regarding gold price suppression. There’s zero credible evidence for it, and I’m embarrassed having to discuss the subject with outsiders who have heard it; for them it’s more evidence that gold investors all wear tinfoil hats. The fact is the government doesn’t care about gold; they really do think it’s a barbarous relic that should be used to plate urinals, as Lenin supposedly suggested. They don’t care about its price, and even less about that of silver. That said, I’ll stick my nose out and say that I think the bottom for gold has come and gone, with that spike downward.

L: I haven’t made a formal call, but my gut take is the same, and I said so in the current edition of the International Speculator. I published a chart showing one of those days—and there have been quite a few recently—in which gold sold off sharply during a time of light trading volume, only to rebound and close the day higher. To me, this is evidence that there’s a large pool of deep-pocketed buyers out there for whom the current gold trading range is attractive and who back up the truck for more every time it gets cheaper.

Doug: At least two of those buyers are the Chinese and the Russians. The Russians at least appear to disclose their gold holdings every month, and they keep rising and rising. China is less transparent, but they have become the world’s largest gold producer—and they not only don’t export any gold, they import more than anyone else, with the occasional exception of India.

This is important because at the end of the day, the paper market must eventually follow what’s happening in the real world of physical trade in a physical thing like gold. And the reality in the physical market for gold is that global demand is very strong. If any genius is actually suppressing the gold price in Western dominated paper markets, they are simply doing the Russians and Chinese a huge favor, helping them move gold from West to East cheaply. That’s all anyone really needs to know.

L: Understood. But of course, for many gold investors out there, it’s once bitten, twice shy.

Doug: There’s no question that gold has had a severe retracement since its high in September of 2011. I understand their feelings. But we’re not talking about feelings here; we’re talking about markets. Markets cycle. This one has cycled about as low as any gold market in past corrections, and now I think it’s time for it to cycle up again.

L: Now there’s a “forward-looking statement.”

Doug: It’s just my opinion. Everyone’s got one.

L: Heh—well, as Captain Kirk once said to Mr. Spock, “I trust your guesses more than I trust most people’s so-called facts.” But enough on that: what else are you seeing in the markets today?

Doug: The big retreat in oil prices is obviously important.

L: It’s certainly capturing a lot of headlines. What do you think: is this new US oil boom the beginning of the end for OPEC, as so many would love to believe?

Doug: OPEC works fine in a bull market, when everyone is a rich genius. But half the governments in OPEC are broke, they’re all run by morons, and they all cheat on quotas as suits them. OPEC is really just a public relations gimmick at this point—one that allows a bunch of corrupt ministers a chance to live high off the hog and feel important at their meetings.

But there’s no denying that there’s been a sea change in the global energy markets. Fracking and horizontal drilling have created a major surge in US oil production—a big deal in a fungible commodity that has impacted the whole world. The technology will spread everywhere, and costs will drop. But decline curves are steep. You probably need $70-$80 oil to make it work.

Meanwhile, countries like Venezuela, Iraq, and Iran live off of oil revenue and will sell all they can produce at any price they can get. Besides, I think the world economy is slowing down—just look at Europe and China. All of this just means that the energy market went through an entirely predictable down cycle.

L: Any sense of where that bottom is?

Doug: Not a clear one, but we’re probably approaching it, if it hasn’t come and gone as well. Remember that most commodities move roughly together in cycles. Grains, metals, energy—a lot of commodities have fallen significantly in price. And the next step is down for the world economy. Way down.

L: That reminds me of what Rick Rule likes to say: the cure for low prices is low prices. People aren’t going to suddenly decide they don’t need metals, energy, or food. If high oil prices made expensive shale oil production profitable, lower prices will cut back on that supply, driving the price back up again, starting a new cycle.

Doug: Yes, though in the long run, oil supply will simply not be a problem. Oil is just a hydrocarbon, and all you need to make it is CO2, water, and energy. I really don’t worry about future supplies of energy. We’ll have to go through the wringer to get there, but things will eventually get better—not only better than most people imagine, but better than most can imagine.

L: So with that big picture in mind, do developments like the Russians canceling their South Stream pipeline idea in favor of a new route through Turkey matter?

Doug: Not really. The devil can be in the details, but these are just details. More important, as Marin points out in his new book, The Colder War, Putin is the smartest and toughest politician on the international scene today. Whether or not we like him isn’t relevant; we should expect his decisions to be intelligent, given his goals.

For example, as we’ve discussed before, from the Russian perspective, his actions helping Russian populations break their provinces away from Ukraine make perfect sense. The actions of the US-installed puppet government in Kiev are criminal and insane, trying to recapture those people who want independence in eastern Ukraine by force.

So even though he’s not a “nice guy,” I’m a Putin fan.

L: We’re going to have to agree to disagree on that one. I fear the man wants to be Tsar of the World—and he may be ruthless enough to pull it off. And I don’t understand why you’re so quick to dismiss US/EU propaganda but buy into Russian propaganda. You haven’t been to Ukraine to determine the facts for yourself. Neither have I, but I have friends there, and I believe you’re misinformed. That said, I know that you’re basically in favor of all secession movements regardless of the particulars. You’d ultimately like to see every person on earth secede from any and all governments, and with that I agree.

Doug: I don’t think a visit would help. And just because the Russians say something doesn’t mean it’s wrong. You simply have to support breakaway provinces, whether they’re in Spain, Italy, Ukraine, or wherever. It’s logical the Russians would try to help them secede and extremely provocative of the US government to arm the bankrupt regime in Kiev to prevent it.

L: Okay then—what else is on your mind?

Doug: The ISIS phenomenon in the Middle East. Everyone sees these people as the latest devil incarnate, but to me this turn of events is perfectly predictable—

L: It’s not just predictable, Doug: you did predict it. You’ve been saying for years—decades—that all these lines on the maps of Africa and the Middle East were drawn up in boardrooms in Europe with no regard for the historical, tribal, linguistic, religious, and economic groups they cut apart or the different and often mutually hostile peoples they forced together. I’ve heard you say many times that those lines would change, and now it’s happening.

Doug: Well, okay, that’s true. But the point is that as distasteful as these ISIS people may be to Western sensibilities, they speak for a large number of people who see the world their way, so it’s no surprise to see them gaining ground, cutting across borders they never believed in to begin with. What’s happening with ISIS is natural and inevitable.

The fact that they execute people by beheading is picturesque in a way many Westerners find offensive—but it is by nature no more offensive than state executions in the US. Strapping a guy to a chair and running electricity through him or strapping him to a table and injecting poisons into him is equally barbaric. The public executions are a distraction, however; the Saudis execute scores of people the same way for much the same reasons every year, and they’re supposed to be our bosom buddies.

What matters is that this movement has a great deal of support and it’s growing. It’s actually a good thing from the perspective of the people in that part of the world who want that kind of society. That means it will dig in and have staying power. I don’t think it’s going to dry up and blow away. I would not, however, rely on the media for an accurate description or interpretation of events.

And we should expect similar disintegrations of nonsense countries and reorganization of peoples into more natural groupings to spread across the Middle East and throughout Africa. You’d think some heads would roll, at least metaphorically, in Washington after the Iraqi Army—which was the recipient of scores of billions of wasted US taxpayer funds—collapsed totally. They fled and left their weapons for the insurgents. The neocons have absolutely no shame—which, incidentally, is a hallmark of a real sociopath. I’m much more afraid of the people in control of the US government than I am of ISIS.

L: What I don’t understand about this ISIS thing is that they seem to be setting up a “real” government—this new caliphate they want recognized—with defined and accepted territory. That makes them vulnerable to straightforward military action; they become a country that can be warred upon, not just a terrorist group that can disappear in the desert. So, if they are the Bad Guys, why don’t those governments that oppose them wage real war on them and wipe them out?

Doug: Well, what stupidity doesn’t explain, incompetence often does. None of the state armies in the Middle East is worth the powder it would take to blow it to hell; they’re nothing but vehicles for graft and oppressing the people. Half the soldiers are likely sympathetic with the jihadists, if only because they hate their corrupt officers. In warfare, Napoleon said, the psychological is to the physical as three is to one. So don’t bet against ISIS.

And don’t call them terrorists. The word has become a meaningless pejorative. I’m a freedom fighter, you’re a rebel, he’s a terrorist. Entirely apart from the fact that terrorism is just a tactic or sometimes a strategy, like artillery barrages or cavalry charges. We’ll see if they succeed in staking out a territory. Maybe they won’t bother; maybe they’ll become a phyle.

I suggest people analyze the situation in a value-free manner. If you involve your emotions, you’re unlikely to arrive at the most rational conclusions. ISIS is not a friend, but rest assured its members see themselves as good and just people who are fighting evil.

L: It occurs to me that ISIS may be more useful to the powers that be, beheading journalists on YouTube—a great distraction from the woes affecting people’s daily lives in the West.

Doug: Exactly. The worse the economy gets, the more governments look for someone else to blame or some danger somewhere that makes for a good distraction. There needs to be a dog to wag.
I suspect that there are a lot of neocons out there who wish they’d left Saddam alone, rather than whacking the hornet’s nest. Now that the cat is out of the bag, to mix metaphors, I think the phenomenon is really going to spread. And most neocons will learn absolutely nothing from it, since their views aren’t influenced by facts but set by a psychological aberration.

L: So the Forever War intensifies in 2015?

Doug: Yes. I think it’s inevitable. For a bunch of reasons.

L: Speaking of economic woes that people need to be distracted from, have you seen that there’s a national movement building steam in the US, advocating a $15 per hour minimum wage?

Doug: Yes. What these people don’t realize or want to face is that rote labor is not worth $15 per hour, and the only thing they will succeed in achieving is their own unemployment—and unemployability. This movement will only encourage companies like Amazon—which uses thousands and thousands of robots to do work people once did—to automate even more.

So maybe it’s a good thing; it will spur innovation and progress. It might even cost us less for those who lack value-adding skills to go on welfare than for business to be forced to pay them to do work machines can do better and faster. Let me hasten to add that welfare in all its aspects should be abolished. But that’s not going to happen until the present system actually collapses. Which, incidentally, will happen. Nothing overcomes the Second Law of Thermodynamics.

L: Perhaps it’s a form of poetic justice. People see that the government prints all the money it wants to bail out its friends on Wall Street—and itself—why not just print more for them directly? If governments can print, borrow, and spend an economy into prosperity, why indeed can’t societies print money for all to spend as they please? We can all be Zimbabwe—rejoice!

Doug: Looking at this from a historical point of view, you realize that 100 years ago, there were only five central banks in the world. Now every country in the world has a central bank, and they’re all doing exactly the same thing: creating currency units out of thin air as fast as they think they can get away with.

More broadly, a century ago, governments were very limited in their power to regulate the day-to-day lives of citizens. They were actually quite weak. The whole world has transformed tremendously since then, starting with the mega-disaster of World War I, and governments now have unprecedented power over people’s lives—made possible not only by laws, but by the power of central banks… and by the fact the average person has been programmed to believe that’s the way it ought to be.

The good news, I think, is that this situation has already crossed the point of no return; it’s unsustainable. It must and will fall apart. There’s going to be a gigantic reset within the next decade. Within 10 years, I’m sure we’re going to see something that’s going to be not just the biggest thing since World War II, but the biggest thing since the Industrial Revolution. I remain an optimist for the future, but the next big historical turning point is coming, and it’s going to be very unpleasant for most people.

L: That brings to mind how bad things have gotten already, with waves of protest wracking the US over excessive use of force by the police. I don’t know if Obama’s idea of putting cameras on cops will really help—does anyone really trust the watchers to watch themselves?

Doug: It’s all related. Look, rather than discuss the details of the day, I think that at heart, we should remember that cops are people, albeit people who generally have an extra Y chromosome and are loyal first to other cops. Their actions should not only be judged and responded to in the same way we would for any other people, but more severely. If, for example, a citizen kills someone, there’s a grand jury convened and a trial. The same should be the case for cops—every time and in all cases. In fact, cops should not be scrutinized less for the sake of expedience, but more—for the sakes of justice and freedom.

I think it’s unconscionable that cops have gotten away with shakedowns, murder, and other crimes for so long because of the mistaken belief—both theirs and among people in general—that the rules must be different for them. I’m not a fan of today’s cops in general; they’re no longer peace officers concerned with protecting the people, but law enforcement officers concerned with protecting themselves and strong-arming the people as directed by their masters. Maybe people are finally getting fed up. I don’t know how this will end, but it’s hard to see much change before things get worse—something like they were in the movie V for Vendetta.

L: So, pulling back to look at the big picture and looking ahead to 2015, it seems to me that there is something deeply and disturbingly wrong with the global picture. Everyone desperately focuses on whatever good news they can even as the bad news continues unabated. China, which now has the world’s largest economy, is failing to hit even its reduced GDP growth targets, and the EU has fallen and can’t get up. But no one wants to admit that the emperor has no clothes—it’s time to go holiday shopping.

Doug: Good point about China. I see an economic collapse as an almost sure thing for them; the collapse of iron ore prices in 2014 is clear evidence of this, with so much of global iron production having been gobbled up by China until recently. Their banks are broke, which will be a huge problem for the average Chinese worker, who still saves 25%-30% of his or her income. If those people can’t get their money out of their banks or if the money they get is worthless, there won’t just be riots and civil unrest, there will be a revolution.

Japan is destroying the yen and will wipe out the savings of the Japanese people. Europe is a socialist basket case at this point. And I have to say: the US isn’t far behind. Next year and 2016 are really going to be something to behold.

L: Grim. So… how to invest?

Doug: I have no desire to be in the mainstream stock market for the duration. Even less to be in the bond market—the bubble there has gotten bigger and bigger over the last few years, to the point that it has reached a truly unholy size. Real estate is holding on, but it’s floating on a sea of debt, so when the bond bubble breaks, real estate—certainly in the Anglo-Saxon world—is in for big trouble. (And real estate is the most obvious thing for cash-strapped local governments to tax, as things turn down.) So, as we’ve said before, I really don’t see any way out of this thing, other than through the wringer we’re now caught in. However long they last, I do think we’re in the last moments of calm before the storm breaks.

L: I see it as maybe a last chance to back up the truck on the best speculative picks in various sectors poised to surge whenever the storm does break. I don’t know when the balloon pops, but it’s growing and growing in a room full of pins, and our readers will want to be prepared when it blows. The best way I can think of is to subscribe to our various publications, both for strategic guidance and for potentially life-changing—or saving—stock picks.

Fortunately for those late to the game or who wish to diversify into new sectors, we're opening up subscription to our most exclusive and comprehensive service, Casey’s Club, through February 20. I do encourage everyone reading this conversation to take advantage of this opportunity, and prepare for what’s coming—perhaps faster than anyone imagines.

Doug: Yes. It will affect us all, everywhere, but I’m happy to be down here in the peaceful and productive wine country of Cafayate, Argentina.

L: I look forward to my next visit—and hope you’ll visit me soon here in Puerto Rico.

Doug: I’ll be interested to see what the actual change in your taxes turns out to be, net of all your costs.

L: Me too. Well, thanks for another very thought-provoking, if not exactly cheerful conversation. I don’t think I need to ask you to spell out the details of what to do as a result of your projections; it’s all here in these pages and in the International Speculator, of course.

Doug: Just so. Until next time, keep some powder dry; I think you’re going to see some spectacular buying opportunities, and I think those who stick with the program are going to achieve fantastic returns.

L: Hear, hear!

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Sunday, February 15, 2015

Jim Rogers on Opportunities in Russia and Other Hated Markets

By Nick Giambruno

Nick Giambruno: Welcome, Jim. As you know, Doug Casey and I travel the world surveying crisis markets, and we always like to get your take on things. Today I want to talk to you about Russia, which is a very hated market right now. What are your thoughts on Russia in general and on Russian stocks in particular?

Jim Rogers: Well, I’m optimistic about the future of Russia. I was optimistic before this war started in Ukraine, which was instigated by the US, of course. But in any case, I bought more Russia during the Crimea incident, and I’m looking to buy still more.

Unfortunately, what’s happening is certainly not good for the United States. It’s driving Russia and Asia together, which means we’re going to suffer in the long run—the US and Europe. Another of the big four Chinese banks opened a branch in Moscow recently. The Iranians are getting closer to the Russians. The Russians recently finished a railroad into North Korea down to the Port Rason, which is the northernmost ice-free port in Asia. The Russians have put a lot of money into the Trans-Siberian railroad to update it and upgrade it, all of which goes right by China.

Usually, people who do a lot of business together wind up doing other things together, such as fighting wars, but this isn’t any kind of immediate development. I don’t think the Russians, the Chinese, and the Iranians are about to invade America.

Nick: So because of these economic ties to Asia, the Russians are not as dependent on the West. Is that why you’re optimistic about Russia?

Jim: I first went to the Soviet Union in 1966, and I came away very pessimistic. And I was pessimistic for the next 47 years, because I didn’t see how it could possibly work. But then I started noticing, a year or two ago, that now everybody hates Russia—the market is not at all interesting to anybody anymore.

You may remember in the 1990s, and even the first decade of this century, everybody was enthusiastic about Russia. Lots of people had periodic bouts of huge enthusiasm. I was short the ruble in 1998, but other than that, I had never invested in Russia, certainly not on the long side. But a year or two ago I started noticing that things are changing in Russia… something is going on in the Kremlin. They understand they can’t just shoot people, confiscate people’s assets. They have to play by the rules if they want to develop their economy.

Now Russia has a convertible currency—and most countries don’t have convertible currencies, but the Russians do. They have fairly large foreign currency reserves and are building up more assets. Having driven across Russia a couple of times, I know they have vast natural resources. And now that the Trans-Siberian Railway has been rebuilt, it’s a huge asset as well.

So I see all these things. I knew the market was depressed, knew nobody liked it, so I started looking for and finding a few investments in Russia.

Nick: Yeah, that definitely seems to make sense when you look at the sentiment and long-term fundamentals. So where do you see the conflict with Ukraine and the tensions with the West going?

Jim: Well, the tensions are going to continue to grow, at least as long as you have the same bureaucrats in Washington. You know, they all have a professional stake in making sure that things don’t calm down in the former Soviet Union—so I don’t see things getting better any time soon.

I do notice that some companies and even countries have started pulling back from the sanctions. Many companies and people are starting to say, “Wait a minute, what is all this about?”

People are starting to reexamine the propaganda that comes out of Washington. Even the Germans are starting to reassess the situation. I suspect that things will cool off eventually, because the U.S. doesn’t have much support and they’ve got plenty of other wars they want to fight or are keen to get started.

So Russia will become more and more dominant in Ukraine. The east is more or less Russian. Crimea was always Russian until Khrushchev got drunk one night and gave it away. So I suspect you will see more and more disintegration of Ukraine, which by the way is good for Ukraine and good for the world.

We don’t complain when the Scots have an election as to whether they want to leave the UK or not. People in Spain want to leave. We say we’re in favor of self-determination. We let Czechoslovakia break up, Yugoslavia break up, Ethiopia break up. These things are usually good. Many borders that exist are historic anomalies, and they should break up. Just because something happened after the First World War or Second World War and some bureaucrats drew a border doesn’t mean it’s logical or should survive.

So I suspect you will see more of eastern Ukraine becoming more and more Russian. I don’t see America going to war, I certainly don’t see Europe going to war over Ukraine, and so America will just sort of slowly slide away and have to admit another miscalculation.

Nick: I agree. Would you also say that Europe’s dependence on Russia for energy limits how far the sanctions can go? There’s been speculation that the Europeans are going to cut Russia out of the SWIFT system, like they did with Iran.

Jim: Well, anything can happen. I noticed SWIFT’s reaction when America tried to force them to do that: they were not very happy at all. I’m an American citizen like you, and unfortunately the bigger picture is forcing the Russians, the Chinese, and others to accelerate in finding an alternative. That is not good for the US.

The Americans have a monopoly, because everyone who uses dollars has to get them cleared through New York. People were already starting to worry in the past few years about the American dominance of the system and its ability to just close everything down.

So now the Russians and Chinese and others are accelerating their efforts to find an alternative to SWIFT and to the American dollar and the dominance of the US financial system. As I said earlier, none of this is good for the US. We think we’re hurting the Russians. We are actually hurting ourselves very badly in the long term.

Nick: I think one area where you can really see this is that the US essentially kicked Russia out of Visa and MasterCard. And what did Russia do? They turned to China UnionPay, which is China’s payment processor.

Jim: We could go on and on. There are things that have happened, and everything is underway now because Putin has told everybody, “Okay, we’ve got to reexamine our whole way of life that has evolved since the Berlin Wall fell,” and that’s one of the things. By the way, the Chinese love all of this. It’s certainly good for China. It’s not good for the US in the end, but it’s great for China and some Asian countries, such as Iran.

Nothing we have done has been good for America since this whole thing started—nothing. Everything we’ve done has been good for the Chinese.

Nick: So why are they doing it?

Jim: You know as well as I do: these are bureaucrats who shouldn’t be there in the first place. Power corrupts, and it has. You look at the beginning of the First World War, the Emperor, who was 85 years old at the time, made nine demands on the Serbians. Serbia met eight of his demands. For whatever reason they couldn’t meet the ninth. And so they said, “Okay, that’s it… war.” And then everybody was at war.

The bureaucrats everywhere piled in with great enthusiasm—great headlines about how the war will be over by Christmas. By the way, whenever wars start, the headlines always say the war will be over by Christmas, at least in Christian nations. But six months after that war started, everybody looked around and said, “What the hell are we doing?” This is madness. Millions of people are being killed. Billions of dollars are being lost.

This is not good for anybody. And why did it start? Nobody could even tell you why it started, but unfortunately it went on for four years with massive amounts of destruction, all because a few bureaucrats and an old man couldn’t get their acts together. None of that was necessary. Nearly all wars start like that. If you examine the beginning of any war, years later you ask, “How did it happen? Why did it happen?” And usually there’s not much explanation. The winners write history, so the winners always have a good explanation, but more objective people are usually confused.

Nick: Excellent points that you make, Jim. I want to shift gears a little bit. I know you’re a fan of agriculture, and parts of Russia and Ukraine are among the most fertile regions in the world. Investing there is a nice way to get into agriculture and also Russia at the same time. What do you think about companies and stocks that own and operate farmland in that region?

Jim: Well, historically you’re right. Ukraine was one of the major breadbaskets of the world, and some of those vast Russian lands were great breadbaskets at times in history. Communism can and does ruin everything it touches. It ruined Soviet agriculture, but many of those places have great potential and will revive.

I haven’t actually gone and examined the soil myself to see that it’s still fertile, but I assume it is because you see the production numbers. That part of the world should be and will be great agricultural producers again. It’s just a question of when and who.

By the way, I have recently become a director of a large Russian phosphorous/fertilizer company, partly for the reasons you’re discussing.

(Editor’s Note: We recently discussed how investors can access agricultural investment opportunities in Russia. There's an accessible stock that makes it easy to do just that. For all the details, you may want to check out Crisis Speculator.)

Nick: We were talking about Russia and Iran. I’ve had the chance to travel to Iran. It has a remarkably vibrant stock market, all things considered. It’s not heavily dependent on natural resources. They have consumer goods companies, tech companies, and so forth.

Do you see the potential for Iran to open up anytime soon, maybe a Nixon-goes-to-China moment?

Jim: I bought Iranian shares in 1993, and over the next few years it went up something like 47 times, so it was an astonishing success. I got a lot of my money out, but some of it is still trapped there. I don’t know if I could ever find it, but I took so much out it didn’t really matter.

Yes, I know that there’s an interesting market there. I know there’s a vibrant society there. I know huge numbers of Iranians who are under 30, and they want to live a different life. It is changing slowly, but it’s in the process.

Part of it, of course, is because the West has characterized them as demons and evil, which makes it harder. I was never very keen on things like that. Throughout history and in my own experience, engagement is usually a better way to change things than ignoring people and forcing them to close in and get bitter about the outside world.

So I don’t particularly approve of our approach or anybody’s approach to Iran. I certainly don’t approve of old man Khamenei’s approach to Iran either. There were mistakes made in the early days on both sides. But that’s all changing now. I see great opportunities in Iran. If they don’t open to the West, they’re going to open to Asia and to Russia.

There are fabulous opportunities in Iran, with over 70 million people, vast assets, lots of entrepreneur-type people, smart people, and educated people. Iran is Persia. Persia was one of the great nations of world history for many centuries.

So it’s not as though they were a bunch of backward people sitting over there who can’t read or find other people on the map. Persia has enormous potential, and they will develop it again.

Nick: I completely agree, and we’re looking at Iran closely, too. If the West doesn’t open up to Iran, it’s going to lose out to the Chinese and the Russians, who are going to gobble up that opportunity and really eat the Americans’ lunch.

Of course with the sanctions, it’s pretty much illegal for Americans to invest in Iran right now.

Jim: That wasn’t always the case. Years ago, if the investment was less than a certain amount of money, and some other things, there were no problems. I don’t know the details of the current law.

Nick: It’s difficult to keep up with, because the story is constantly changing.

Jim: Well, that’s the brilliance of bureaucrats; they always have something to do. It gives them ongoing job security.

Nick: Exactly.

Nick: Another place we have on our list is Kurdistan.

Jim: The Kurds have been a pretty powerful group of people for a long time. I hope they can pull it together. An independent Kurdistan would be good for Turkey and good for everybody else. Unfortunately, again, you have all these bureaucrats who don’t like change.

I’ve certainly got it on my radar, and maybe I’ll bump into you in Iran, or Russia, or Kurdistan, or who knows where.

Nick: Sounds good Jim, we’ll be in touch.

Editor’s Note: This was an excerpt from Crisis Speculator, which uncovers the deep value investment opportunities waiting behind the news that frightens others away.

The article was originally published at

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Friday, February 13, 2015

Wall Street Double Talk and Double Opportunity of Falling Oil Price

By Tony Sagami

The stock market has developed a new type of love-hate relationship with the price of oil. In the past, falling oil prices were treated as an economic positive because they freed up more money for Americans to spend on other things, such as dining out or clothing. However, the steep plunge in oil prices has triggered a reverse psychology reaction on Wall Street: falling oil prices are bad because they signal a slowing global economy.

An even bigger head scratcher is the convoluted reaction that rising oil prices are good for the economy. Go figure.

Wall Street’s collective reaction, silly or not, is important because oil prices are what is currently driving the ups and downs of the stock market. And if you can divine the future direction of oil prices… you’ll find yourself on the right side of the stock market roller coaster.

What do I see when I connect the dots? That oil prices will fall even further.

Connecting the Dots #1: Helmerich & Payne. Helmerich & Payne is the largest lessor of oil rig drilling platforms in the US and recently announced that it would lay off up to 2,000 workers and chop its rig construction pace from four to two new oil rigs a month.

Moreover, Helmerich & Payne said that its active rig count has slid from 297 at the end of Q3 2014 to less than 200 today. “The rig count reduction thus far has been more swift than many expected,” said CEO John Lindsay.

And the price that H&P is receiving on that smaller amount of working rigs is falling. The daily revenue per rig is expected to average $27,000 to $27,500 this quarter, well below the $29,457 it received last quarter.

Connecting the Dots #2: Oil Pros Take Flight. For the week ending January 27, noncommercial traders increased their bets for oil prices to fall even more by adding 22,771 short contracts.

NOTE: Investors who use futures as hedges are called “commercial traders” while those who trade for speculation are called “noncommercial traders.”

The professional traders in the commodities pits make mistakes like the rest of us… but they’re right enough to make a living at it, so it’s dangerous to bet against them.

Connecting the Dots #3: Baker Hughes. In the last week of January, U.S. oil producers shut down 94 drilling rigs, which is the largest one week shutdown in 28 years!

That leaves 1,233 active rigs in North America—a three-year low.

Connecting the Dots #4: Supply Glut. The US Department of Energy reported that crude-oil stockpiles reached 406.7 million barrels in January, the highest level since the government started keeping records in 1982.

Higher supplies wouldn’t be an issue if demand were keeping pace, but thanks to improved drilling technology (fracking), the US is now awash in oil.

Connecting the Dots #5: USW Strike. Adding to the oil-patch pain, the strike of 3,800 members of the United Steelworkers union from nine refineries and chemical plants that process roughly 10% of US gasoline, diesel, heating oil, and jet fuel.

There are many ways to profit from falling oil prices, such as airlines and trucking stocks, but the most profitable is by betting against the companies that supply oil drilling equipment.

The Philadelphia Oil Services Index (OSX) is a price-weighted index composed of 15 companies that provide oil drilling and production services, oil field equipment, and support services.

If you’re confident that oil prices are headed lower, you can buy put options on the OSX index. And if you’re right… you’ll make a bundle. For example, my Rational Bear subscribers made over 200% in a few short weeks.

I’m not suggesting that you rush out and make big bets on oil prices tomorrow morning. As always, timing is everything, so wait for my next signal; but I am very confident that the profits of oil services companies are headed for the toilet.

Tony Sagami
Tony Sagami

30-year market expert Tony Sagami leads the Yield Shark and Rational Bear advisories at Mauldin Economics. To learn more about Yield Shark and how it helps you maximize dividend income, click here.

To learn more about Rational Bear and how you can use it to benefit from falling stocks and sectors, click here.

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