Friday, March 10, 2017

John Carter's Next Free Webinar "How I Almost Doubled My Account in Less than 60 Days"

John Carter of Simpler Options is back with another one of his wildly popular free webinars. John is absolutely killing it again in 2017 and he has put together a 90 day trading plan to share with us.

He is calling this free webinar "How I Almost Doubled My Account in Less than 60 Days".

Claim Your Spot Here 

Limited seats are available and as always this one will fill up fast so get your reserved spot now. This is free training on the rapid account growth strategies that are working right now, not in 2015 or 2016....right now!

So please join us Tuesday, March 21st @ 7:00 pm central time

Here's just some of what he will cover:

  *  John F. Carter will reveal his new 90 day trading plan that will take us into the 2nd quarter of 2017

  *  With the market at all time highs John shows us how to adapt to conditions most traders haven’t seen in years

  *   John will show us how he grew his account by 82% between January and February, 2017.

  *  We'll find out what’s working now because outdated strategies could be dead wrong in current conditions.

 Just Click Here to get your seat now and we'll see you Tuesday March 21st

See you there!

John F. Carter @ Simpler Options










Wednesday, February 15, 2017

Why It Feels Like the Dot Com Bubble All Over Again

By Justin Spittler

Today, we’re going to do something different. As you can imagine, we hear from our readers a lot. Some of them have nice things to say. Others…not so much. Most importantly, though, we get a lot of questions. Last week, we received a question that was so important, we’re dedicating this entire issue to it. This question might be something you’re wondering yourself…and it could have a huge impact on your money.

It comes from Joseph J., a subscriber to The Casey Report:
I read today’s newsletter (Trump Should Be Careful What He Wishes For) with great interest. In it you stated that “U.S. stocks are incredibly expensive…” But my question is: Based against what? We are in uncharted territory, and every single newsletter writer that I have asked this question of has failed to provide an answer. Perhaps you will be different.
Thank you for putting us in the hot seat, Joseph. Lucky for us, we didn’t make this claim lightly. We have plenty of facts to back it up. Before we show you the proof, you have to realize something: There are many different ways to value stocks. Everyone has their preference. A lot of folks use the price-to-earnings (P/E) ratio. Other investors look at a company’s book value or cash flow.

We prefer to use the cyclically adjusted price-to-earnings (CAPE) ratio.…
This ratio is the cousin of the popular P/E ratio. The only difference is that it uses 10 years’ worth of earnings instead of just the previous year’s. This smooths out the up and downs of the business cycle. It gives us a long-term view of the market. Right now, the CAPE ratio for companies in the S&P 500 is 28.4. That’s 70% higher than its historical average. U.S. stocks haven’t been this expensive since the dot com bubble.



This isn’t a good sign. As you may remember, the S&P 500 fell 41% from 2000–2002. The Nasdaq plunged 78% over the same period.

But the CAPE ratio is just one way to value stocks.…
To prove we’re not cherry picking, let’s look at some other metrics. First up, the price-to-sales (P/S) ratio. This ratio is just like the P/E ratio, but it uses the previous year’s sales instead of earnings. According to credit rating agency Standard & Poor’s, the S&P 500 currently trades at 2.02 times sales. That’s 40% higher than its historical average, and the highest level since at least 2000. Clearly, U.S. stocks are more expensive than normal. But that’s not even the main reason investors are nervous about them.

U.S. stocks seem to have lost touch with reality.…
As we all know, the stock market allows investors to own a piece of publicly traded companies. Most of the companies on the NYSE (New York Stock Exchange) are U.S. companies. Because of this, you would think the stock market would generally follow the health of the economy. If the economy’s booming, stocks should be soaring. If the economy’s struggling, stocks should be, too. That hasn’t been the case lately.

Since 2009, the S&P 500 has surged 239% to record highs. That makes this one of the strongest bull markets in U.S. history. During that same span, the U.S. economy has grown just 2% per year. That makes the current “recovery” one of the weakest since World War II. In short, Main Street hasn’t kept up with Wall Street.

The U.S. stock market is now clearly in “bubble territory”.…
Just look at the chart below. This chart compares the value of the U.S. stock market with the nation’s gross domestic income (GDI). GDI is like gross domestic product (GDP), but instead of measuring how much money a country spends, it measures how much money a country earns. It counts things like wages, corporate profits, and tax receipts. A high ratio means stocks are expensive relative to how much money an economy makes. You can see in the chart below that this key ratio is well above its housing bubble high. It’s now approaching the record high it hit during the dot-com bubble.



This is another serious red flag.…
But it doesn't mean stocks are going to crash next month, or next year. For this bubble to pop, something will have to prick it. We’re not sure what that will be…where it will come from…or when it will happen…
But we do know stocks don’t go up forever. Sooner or later, this bubble is going to end. When it does, many investors are going to take huge losses. Years’ worth of returns could disappear in a matter of months, even weeks.

The good news is that you can still crisis-proof your portfolio. Here are three ways to get started:
  1. Set aside more cash. Holding extra cash will help you avoid big losses if stocks fall. It will also put you in a position to buy stocks when they get cheaper.
  2. Own physical gold. Gold is the ultimate safe-haven asset. It’s survived every financial crisis in history. It will certainly survive the next one.
  3. Close your weakest positions. Start by selling your most expensive stocks. They tend to fall the hardest during major selloffs. You should also get rid of companies that need cheap debt to make money. If problems in the bond market continue, these companies could be in trouble.
These simple strategies could save you tens of thousands, possibly more, when the inevitable happens.

Chart of the Day

Miners are rallying again. Today’s chart shows the performance of the S&P/TSX Global Mining Index. This index tracks the performance of companies that mine commodities like gold, silver, aluminum, and copper. You can see that this index skyrocketed at the beginning of last year. It nearly doubled between January and July. Then, it went almost nowhere for six months.

Three weeks ago, the S&P/TSX Global Mining Index broke out of this sideways trading pattern. It’s now trading at its highest level since early 2015. This is very bullish. It tells us that mining stocks may have just entered a new phase of a bull market. If you’ve been thinking about buying mining stocks, now might be a good time to get in. But don’t worry if you don’t know what to buy.

We recently put together a presentation that talks about one of the richest gold deposits in the world. Our top gold analyst has never seen anything like this in his career. Early investors in the company that owns this deposit could make 1,000% or more. But this opportunity won’t last long. Just two months from now, this world-class mine will “go live.” When it does, this company’s stock should shoot through the roof. For more details on this incredible opportunity, click here.



Stock & ETF Trading Signals

Tuesday, January 31, 2017

Forget Dow 20,000… This Indicator Tells the Real Story

By Justin Spittler

It finally happened. For the last six weeks, the Dow Jones Industrial Average has been bumping against a ceiling. Yesterday, it broke through. The Dow topped 20,000 for the first time ever. Most investors are excited about this. After all, 20,000 is a big, round number. It feels like a psychological win for the bulls.

But it’s not an invitation to dive into stocks…not yet, at least. We need to see if the Dow can hold this level.
If it closes the week above 20,000, stocks could keep rallying. If it doesn’t, nothing has really changed. It could even be a warning sign. Until then, sit tight. Don’t chase stocks higher…stick to your stop losses…and hold on to your gold.

Don’t lose sight of the big picture, either.…

Remember, U.S. stocks are still very risky:
➢ They’re expensive. The S&P 500 is trading at a cyclically adjusted price-to-earnings ratio (CAPE) of 28.4. That means large U.S. stocks are 70% more expensive than their historical average.
➢ We’re still in a profits recession. Profits for companies in the S&P 500 stopped growing in 2014.
➢ And Donald Trump is president of the United States. Trump could do wonders for the economy and stock market. But he could also unleash a major financial crisis. It's still too early to tell.

As you can see, "Dow 2,000" isn't necessarily a reason to celebrate. In fact, as we told you two weeks ago, there's something much more important you should be watching right now.

The bond market is flashing danger.…
The bond market is where companies borrow money. It’s the cornerstone of the global financial system.
It’s also bigger and more liquid than the stock market. This is why the bond market often signals danger long before it shows up in stocks.

The bond market started to unravel last summer.…
Just look at U.S. Treasury bonds. In July, the 10-year U.S. Treasury hit a record low of 1.37%. Since then, it’s nearly doubled to 2.55%. This is a serious red flag. You see, a bond’s yield rises when its price falls. In this case, yields skyrocketed because bond prices tanked. The same thing has happened in long term Treasury, municipal, and corporate bonds.

Bill Gross thinks bonds are entering a long-term bear market.…
Gross is one of the world’s top bond experts. He founded PIMCO, one of the world’s largest asset managers. He now runs a giant bond fund at Janus Capital. Two weeks ago, Gross said the bull market in bonds would come to an end when the 10-year yield tops 2.6%. Keep in mind, bonds have technically been in a bull market since the 1980s.

According to Gross, this number is far more important than Dow 20,000. And we’re only 50 basis points (0.5%) from hitting it. In other words, the nearly four-decade bull market in bonds could end any day now.
When it does, Gross says bonds will enter a secular bear market... meaning bonds could fall for years, even decades. This is why Casey Research founder Doug Casey has urged you to “sell all your bonds.”

If you haven’t already taken Doug’s advice, we encourage you to do so now.…
You should also take a good look at your other holdings. After all, problems in the bond market could soon spill over into the stock market. If this happens, utility stocks could be in big trouble. Utility companies provide electricity, gas, and water to our homes and businesses. They sell things we can’t live without. Because of this, most utility companies generate steady revenues. This helps them pay dependable dividends.

Many investors own utility stocks just for their dividends.…
That’s why a lot of people call them “bond proxies.” Utility stocks don’t just pay generous income like bonds, either. They also trade with bonds. You can see this in the chart below. It compares the performance of the Utilities Select Sector SPDR ETF (XLU) with the iShares 20+ Year Treasury Bond ETF (TLT). XLU holds 28 utility stocks. TLT holds long-term Treasury bonds. XLU has traded with TLT for the better part of the last year. Both funds crashed after the election, too. But XLU has since rebounded.




You might find this odd. After all, the two funds basically moved in lockstep until a couple months ago.
But there’s a perfectly good explanation for this.…

Utility stocks pay more than Treasury bonds.…
Right now, XLU yields 3.4%. TLT yields 2.6%. That might not sound like big deal. But those extra 80 basis points (0.8%) provide a margin of safety. You see, the annual inflation rate is currently running at about 2.1%. That means the U.S. dollar is losing 2.1% of its value every year.

That’s bad news for everyday Americans. It’s also bad for bondholders. It means investors who own TLT are earning a “real” return (its dividend yield minus inflation) of 0.5%. Meanwhile, you’d be earning a real return of 1.3% if you owned XLU. Of course, utility stocks should pay more than government bonds. They’re riskier, after all. Unlike the government, utility companies can’t print money whenever they want. If they run into financial problems, they could go out of business.

Today, investors don’t seem to mind taking on extra risk for more income. But that could soon change…

Inflation could skyrocket under Donald Trump.…
If you’ve been reading the Dispatch, you know why. For one, Trump wants to spend $1 trillion on infrastructure projects. While this could help the economy in the short run, the U.S. government will have to borrow money to fix the country’s decrepit roads, bridges, and power lines. This would likely produce a lot more inflation. If that happens, real returns could shrink even more. And that could trigger a selloff in utility stocks and other "bond proxies," like telecom and real estate stocks. In short, if you own these types of stocks just for their dividends, you might want to consider selling them now.

We recommend sticking to dividend-paying stocks that meet the following criteria.…
The company should be growing. If it isn’t, you probably own the stock just for its dividend. That’s a bad strategy right now. It should have a low payout ratio. A payout ratio can tell us if a company’s dividend is sustainable or not. A payout ratio above 100% means a company is paying out more in dividends than it earns in income. Avoid these companies whenever possible.

It shouldn’t depend on cheap credit. After the 2008 financial crisis, a lot of companies borrowed money at rock-bottom rates to pay out dividends. If rates keep rising, these companies could have a tough time paying those dividends. If you own stocks that check these boxes, your income stream should be in good shape for now.


Chart of the Day

“Trump Years” stocks are on a tear. We all know U.S. stocks took off after the election. But some stocks did better than others. Bank stocks spiked on hopes that Trump would deregulate the financial sector. Oil and gas stocks rallied because Trump is pro-energy. Industrial stocks have also surged since Election Day.

Industrial companies manufacture and distribute goods. They include construction companies and equipment makers. E.B. Tucker, editor of The Casey Report, thinks these companies will stay very busy while Trump rebuilds America’s hollowed out economy.

He’s so sure of it that he recommended four “Trump Years” stocks last month. One of those stocks is up 11% in just six weeks. Yesterday, it spiked 8% after the company crushed its fourth quarter earnings report.
The company announced higher sales, fatter profits, and lower taxes. It raised its guidance for the year. In other words, it expects to make a lot more money this year…now that Trump’s in charge.

You can learn about this company and E.B.’s other “Trump Years” stocks by signing up for The Casey Report. Click here to begin your free trial.




Stock & ETF Trading Signals

Tuesday, January 24, 2017

Wall Street’s Smoking Gun….Why Stocks Get Weird on Fridays

What if I told you there was proof that Wall Street was manipulating the markets? Every Friday, they fraudulently shift Blue Chip stock prices to the tune of $9.1 billion. This isn’t a tin foil hat conspiracy either. It’s been reported in Bloomberg, Fortune and the NY Times.

If you’ve been in the market at all over the last few years, you’re likely a victim. Your wealth, and your trading performance HAVE been impacted by this phenomenon.

Do NOT place another trade until you’ve watched this short video....watch Get The Truth

Now what if that’s actually good news? Former hedge fund manager, Roger, has identified an opportunity in the scandal. It’s a unique “income trade” that pops up 7-8 times a month - which could have paid you…

$1,670 in 10 Days....$1,616 in 6 Days....And $1,475 in 4 Days.

And, you’d still get paid even if you have no idea which way stocks are going. Even if you couldn’t time the market with a crystal ball… even if you screwed up 100% of your trades.

Find Out How

The Stock Market Club

Thursday, January 19, 2017

One Big, Fat, Ugly Bubble

By Nick Giambruno

The establishment is setting up Donald Trump. The mainstream media hates him. Hollywood hates him. The “Intellectual Yet Idiot” academia class hates him. The CIA hates him. So does the rest of the Deep State, or the permanently entrenched “national security” bureaucracy. They did everything possible to stop Trump from taking office. None of it worked. They fired all of their bullets, but he still wouldn’t go down.

Of course, the Deep State could still try to assassinate Trump. It’s obvious the possibility has crossed his mind. He’s taken the unusual step of supplementing his Secret Service protection with loyal private security.
The Deep State’s next move is to pin the coming stock market collapse on Trump. When people think “Greater Depression,” they’ll think “Donald Trump.” 

The economy has been on life support since the 2008 financial crisis. The Fed has pumped it up with unprecedented amounts of “stimulus.” This has created enormous distortions and misallocations of capital that need to be flushed. Think of the trillions of dollars in money printing programs—euphemistically called quantitative easing (QE) 1, 2, and 3.

Meanwhile, with zero and even negative interest rates in many countries, rates are the lowest they’ve been in 5,000 years of recorded human history. This is not hyperbole. We’re really in uncharted territory. (Interest rates were never lower than 6% in ancient Greece, and ranged from 4% to over 12% in ancient Rome.) The too big to fail banks are even bigger than they were in 2008. They have more derivatives, and they’re much more dangerous.

If the Deep State wants to trigger a stock market collapse on par with 1929, it just has to pull the plug on the extraordinary life support measures it’s used since the last crisis. It’s already baked in the cake. It’s just a matter of when they decide to trigger the controlled demolition. Donald Trump is the perfect fall guy. And there are signs the Deep State is already starting to get its revenge. The most important variable to watch is the Federal Reserve—the quintessential establishment institution.




Source: Ben Garrison

Even though most politicians, economists, and pundits in the mainstream media won’t admit it, central banks exist to help governments finance themselves, at the expense of the average man. It’s the hidden, but real, reason they exist. The Fed accommodated Obama—effectively financing his regime’s deficits by creating new currency units. I doubt they will do Trump the same favor. And Trump will likely run up enormous deficits. Don’t forget about the $1 trillion in stimulus spending he has planned. If the Fed doesn’t gobble up the debt used to finance Trump’s spending, it will only work to push up interest rates.

Interest Rates

Manipulating interest rates to near 5,000-year lows is a crucial part of the life-support system. Now the Fed is set to pull the plug and leave Trump holding the bag. In December 2015 the Fed raised interest rates for the first time in almost a decade, from 0% to a mere 0.25%. The Fed kept rates there until last month, when it raised them to 0.50%. It also announced it would accelerate rate hikes throughout 2017—three in total.

There’s a good chance the Fed will announce these rate hikes during the eight Federal Open Market Committee (FOMC) meetings it has scheduled in 2017.

2017 FOMC Meetings
February 1 July 26
  March 15 September 20
  May 3 November 1
  June 14 December 13

I think some of these rate hikes will be much bigger than the 0.25% most expect. They could pull a series of 0.50% rate hikes… or go even bigger. Anything greater than the normal 0.25% tempo would shock the market—and seem designed to hurt Trump.

The establishment will get its revenge on Trump. The Federal Reserve is its weapon of choice.

Trump seems aware of the situation. He recently said, “They’re keeping the rates down so that everything else doesn’t go down.” He’s also said that “We have a very false economy” and the stock market is a “big, fat, ugly bubble.” During the campaign, Trump called Fed Chair Janet Yellen “highly political.” He said the Fed should raise interest rates but won’t because of “political reasons.” (Raising rates before the election would have hurt Hillary Clinton.)

The Media

The mainstream media is another variable to watch. Paul Krugman, a New York Times economist—or, more accurately, witch doctor economist—has come out against Trump’s $1 trillion infrastructure stimulus. It’s bizarre because Krugman, a die-hard Keynesian, had previously never seen a “stimulus” program he didn’t like. Once, he even advocated faking a space-alien invasion to stimulate the economy. It shows that Krugman is not only a fool, but a hypocrite. This is a clue.

I bet the rest of the mainstream financial media—CNBC, Bloomberg, The Economist, etc.—will morph from bullish cheerleaders into pessimistic doom-and-gloomers after Trump takes office. Don’t expect them to find any “green shoots” after the market tanks on Trump’s watch. All this is why what happens after Trump’s inauguration could change everything… in sudden, unexpected ways. This is exactly why Doug Casey and I put together a time-sensitive video explaining how it could all go down.

You absolutely must see this urgent video before Trump’s inauguration in two days. Click here to watch it now.





The article One Big, Fat, Ugly Bubble was originally published at caseyresearch.com.


Thursday, January 12, 2017

Why Gold Could Soar Another 353%

By Justin Spittler

Gold is on the rise again. It’s climbed for two straight weeks, and it’s now up nearly 5% since December 15. Many precious metals investors couldn’t be happier about this. You see, gold stormed out of the gate last year. It had its strongest first quarter since 1986. By the end of June, it had risen 25%. Things were looking up. Then, the market changed course. Gold plunged 18% in just four months. Last month, it hit its lowest level since last February.

• The sharp pullback spooked precious metals investors….
But regular Dispatch readers knew that gold would rebound. After such an explosive start to 2016, it was only natural for gold to “take a breather.” We urged you to not lose sight of the big picture. As we often remind you, gold’s a safe-haven asset. Investors buy it when they’re worried about the economy, financial system, or politics. And right now, investors have plenty of reasons to be worried, even if some are still enjoying the “Trump Honeymoon” phase.

• Louis James thinks gold will keep rising….
Louis is our chief resource expert. He is the editor of International Speculator and Casey Resource Investor, our advisories dedicated to resource stocks with big upside. According to Louis, gold has struggled recently because investors expect interest rates to rise. They have good reason to think this, too. After all, the Federal Reserve just raised its key interest rate… but for only the second time since 2006. It also said that it plans to lift rates three more times this year. Conventional wisdom tells us that this is bad for gold. Since gold doesn’t pay interest like a bond, most investors don’t want to own it when rates are rising or are likely to rise.

• According to Louis, the market has already “priced in” higher interest rates….
This means gold shouldn’t fall if the Fed sticks to its plan and raises rates three more times this year. Of course, that’s a big “if.” Heading into last year, the Fed said it wanted to raise rates four times. But it only raised rates once last year, and it waited until the eleventh hour to pull the trigger. We wouldn’t be surprised if the Fed sits on its hands again. If that happens, investors will know something is very wrong with the economy. Many folks will start buying gold hand over fist.

• But that’s not the only reason Louis is bullish on gold.…
Last week, he gave his subscribers several reasons why gold should keep rising:
➢ Rumors of new gold curbs in India have not panned out.
➢ Fear of the fall of New Rome [the EU] is driving Europeans into [U.S.] dollars and gold.
➢ The escalation of the “other” Cold War with China increases uncertainty in global markets.
➢ Even Trump’s best ideas (cuts in taxes and regulations) will cause disruptions that will have to work through the economy before things can improve.
• Gold is incredibly cheap, too.…
Louis explains:
Gold needs to rise another US$900 or so to hit a new inflation-adjusted high. Given the trillions and trillions of new dollars, euros, yen, yuan, and so forth printed over the last 45 years, it should do much more than that.
Right now, gold is trading for about $1,180. In other words, it would have to climb about 75% to reach its previous inflation-adjusted high.
But Louis thinks gold could race well past that in the coming years:
Many analysts see the current market as analogous to the great gold bull of the 1970s, only bigger and longer. Adjusted for inflation, gold rose about 353% from its mid-1970s trough to its 1980 peak. If that pattern repeats itself, gold would have to rise from its December 2015 low to just above US$5,200 per ounce by October 2022.
If gold does anything close to what it did during the ’70s, precious metals investors could see explosive gains in the very near future. Just take a look at the chart below.




• Louis is so convinced that gold’s headed higher, he just made a giant bet on it…

He wrote last week:
I’m so sure, I put my money where my mouth is last week. As advised last month, I entered the market during the peak of Tax Loss Season. I’m not allowed to buy the same stocks I recommend (to avoid possible conflicts of interest), so I bought ETFs instead. In fact, I put about twice as much of my own cash into these proxies for gold stocks than I ever put into gold stocks before.
Louis also plans to buy more gold at the first chance he gets:
I think that 2016 was an overture for what’s ahead. I intend to profit from it. And I’m not worried about any fluctuations in the near term. If prices drop, I’ll hope to buy more. If prices rise, it’s off to the races.
• You, too, can make huge profits from rising gold prices.…
The key is to buy gold mining stocks. Gold miners are leveraged to the price of gold. This means gold doesn’t have to rise much for them to take off. During the 2000–2003 gold bull market, the average gold stock gained 602%. The best ones soared 1,000% or more. Of course, not every gold company is a winner. In fact, many gold stocks are total duds. That’s because gold mining is an incredibly difficult business. To protect your capital and make monster gains, you have to own the right gold stocks. Unfortunately, most folks have no clue what to look for in a gold stock.

That’s where we can help.…

You see, Louis is a true industry insider. He’s visited mining projects all around the world. He’s on a first name basis with many of the world’s top mining CEOs. And he understands the geology inside and out. Louis also has a proprietary system for finding the best gold stocks. Casey Research founder Doug Casey actually taught Louis this system… after he spent decades perfecting it.

You can learn more about Louis’ system by clicking here. As you’ll see, it’s delivered giant gains over and over again. Just don’t wait too long. Gold probably won’t stay cheap for much longer… meaning you’ll want to take action soon to have a shot at truly life changing gains. Click here to learn more.

Chart of the Day

Gold stocks are dirt cheap, too.

Today’s chart compares the NYSE Arca Gold BUGS Index (HUI), which tracks large gold stocks, with the price of gold. The lower the ratio, the cheaper gold stocks are relative to gold. According to this ratio, gold stocks are cheaper today than they ever were during the dot com bubble. They’re also cheaper than they ever were during the last housing bubble.

Keep in mind, stocks were trading near record highs during these periods. Most investors were extremely bullish. They owned too many mainstream stocks and not enough gold stocks. Right now, this key ratio is lower than it was during either period. This tells us that today could be one of the best times to buy gold stocks since the turn of the century.

If you would like to add gold stocks to your portfolio, we encourage you to sign up for International Speculator. As we said earlier, this is our publication dedicated to gold stocks with the most upside. 

Click here to begin your risk-free trial.



The article Why Gold Could Soar Another 353% was originally published at caseyresearch.com.




Stock & ETF Trading Signals

Monday, December 26, 2016

Five Easy Ways to Make Your Finances Less Fragile

By Justin Spittler

A few days ago, we sat down with E.B. Tucker, editor of The Casey Report, to talk shop. The conversation was so good, we just had to share it with you. In the following interview, E.B. talks about how he manages his own money. As you’ll see, he has a unique, yet intuitive approach to investing, especially when it comes to asset allocation. We hope you find this conversation as useful as we did. Also, make sure you read until the end to learn about one of E.B.’s top speculations.

Justin Spittler: I want to talk investment strategy. Could you tell us how you manage your own money?

E.B. Tucker: I like to break up my investments into buckets. I have about five of them. I have one for gold, one for permanent life insurance, one for real estate, and two for stocks. I don’t limit myself to a certain number of buckets. But I’ve had very good results looking at asset allocation this way.

J.S.: Can you tell us a little more about your “buckets”? Why do you break them up this way? What kind of assets go into each?

E.B.: First of all, the buckets change with life and market conditions. For example, I put most of my capital into a real estate bucket in 2009–2010. As you know, the U.S. housing market had just crashed. If you had the capital, you could buy some houses for next to nothing. And that’s exactly what I did.…

During that period, I bought six single-family homes. I bought one of them for just $10 per square foot. I spent another $10 per square foot fixing the place up, so I put about $20 per square foot all in. The guy before me paid $160 per square foot and ended up in foreclosure. He bought near the peak of the housing bubble. My timing was much better. Today, I’m not adding to my real estate bucket. There just aren’t that many great deals out there. This is key to how I invest. Rather than fight the market, I let it determine how I allocate my money.

J.S.: Can you tell us about some of your other buckets?

E.B.: Well, I have a bucket for gold. But I don’t view gold as an investment designed to make money. I see it as a key long term asset. When gold is cheap, I pour money into this asset. I don’t think about this bucket often. I just get the gold, vault it, and move on.

I also have a permanent life insurance bucket. This bucket is important because I have a few people that depend on me. If I die, they’re out of luck. So, I need to have life insurance. Specifically, I own a couple dividend-paying life insurance policies. A lot of people consider these terrible investments, but that’s because they don’t understand them.

You see, any extra money that I put in this bucket on top of the minimum annual premium grows 6% to 7% per year, tax free. If I don’t use the policy, over time I’ll have a fairly large amount of cash in that bucket that I spend, borrow from, or use to buy more life insurance. And, of course, if the worst does happen, my dependents receive a large death benefit. This money will help them get by in my absence.

J.S.: Interesting, it sounds like this bucket protects you and gives you flexibility.

E.B.: Exactly. The reason I invest this way is because it makes me less “fragile." Now, I still have plenty of exposure to rising asset prices in other buckets. But, if you’re smart about when and how much you add to each bucket, your “boring” buckets will eventually balance out your more speculative buckets. The result is a more stable financial situation without giving up the quest for profits. I like investing this way because I no longer worry about trying to maximize my profit on every trade or every time the market changes course.

J.S.: Let’s talk about your stock buckets next. I’m sure our readers would love to know what’s in your portfolio. 

E.B.: Sure. As I said earlier, I have two of them. One is for stocks I plan to hold for the long haul. I don’t trade these stocks often. I’m only a seller if something happens that changes the business landscape for one of the companies. I typically own between six and eight of these companies at any given time. One of my favorite long term holdings is a company that make crackers you buy at the gas station and pretzels that go well with beer. Last year, the company acquired a business that sells almonds and other nuts. It’s a great company. And it now pays me a decent yield of 3%, since I’ve owned the stock for a few years.

J.S.: What are some of your other long term stock holdings?

E.B.: I also have shares of one of the country’s best regional banks. And I own shares of one of America’s most iconic companies. This company is basically a drug dealer, peddling sugar and caffeine from small rented stores. You get the picture. Now, these aren’t the most exciting investments in the world but, over time, you see the value of owning rock solid American businesses.

You end up with companies that slowly capture market share from their competitors, invest money back into their businesses, and pay dividends. I don’t see how you can get hurt having this bucket represent 20% of your net worth. It’s also worth mentioning that I like to own these stocks in company sponsored dividend reinvestment plans.

Since these are long-term investments, I don’t want to log into a brokerage account and see them next to my trading positions every day. Holding them directly on the company’s books means all my dividends get reinvested into additional shares, usually at no cost. The final benefit is I don’t have to worry about my broker going bust. Holding shares directly registered with a company means there’s nobody standing between you and your investment.

J.S.: That leaves us with your speculation bucket. Can you tell us a little bit about this one?

E.B.: Ah, my favorite. I’ve done fairly well speculating. The key here is separating good speculations from bad ones. As a professional investor, a lot of opportunities come across my desk. Most of them aren’t worth my time. You have to pass on a lot of bad speculations before you find a great one.

J.S.: Can you tell us about one of your better speculations?

E.B.: At a lunch meeting with my banker in 2009, he told me about a company in town that invented a hurricane simulation machine. They placed a few in malls, shopping centers, arcades, and museums and charged $2 per customer. The test machines took in $4,000 to $5,000 per month. The company built each machine for around $12,000. The company had trouble getting a bank to lend it money. It was right after the financial crisis, after all.

I met with the company, saw the machine, and looked at their business plan. A few other investors and I funded the company. We bought preferred shares that paid a 20% dividend. We also received a portion of the company’s profits for the first two years, which boosted our initial returns. Seven and a half years later, I’m still collecting monthly checks from the company. I’ve more than doubled my money, and I could sell the shares anytime I want.

J.S.: Have you done any other speculations like this recently?

E.B.: Yes. Before I got into this business, I ran a gold fund for a few years. My former business partner from that fund just took his gold streaming and royalty company public. Our company policy does not allow me to share the name of the stock, since I own shares. I’m involved in that deal to the tune of about 1% of the company. I think there’s a realistic shot that I’ll make 5–10 times my money.

J.S.: Most people would kill to make that much on a single investment. Why are you so optimistic?

E.B.: I think it’s a good time to speculate on small gold and silver stocks. I especially like royalty and streaming companies like this one. They avoid the tremendous financial burdens that mining companies face.
I also look for companies that have a winning strategy but that are overlooked by the market. If these companies execute, my odds of success go up.

But you need to have cash on hand, or what some people call dry powder, to take advantage of these opportunities. That’s because great deals usually require quick action. When one of my speculations is a winner, I’ll take profits and put them into other buckets, depending on what looks good at the time. I almost never leave the entire profit in the bucket it came from.

J.S.: Got it. So, do you like to keep a certain percentage in each bucket at any given time? What rules, if any, do you follow?

E.B.: I don’t really follow a set of rules when it comes to asset allocation. That makes it hard to take advantage of huge opportunities when they appear. For example, I wouldn’t have invested in the Florida rental real estate market in 2009 and 2010 if I stuck to strict rules. When in doubt, you can divide new money equally between buckets. You can also sit on cash and wait for buying opportunities to present themselves.

J.S.: What kind of investments do you focus on in The Casey Report?

E.B.: That’s your most valuable question so far. In The Casey Report, we fill the long-term stock and speculative stock buckets. We try to predict what the investing world will be like one to two years down the road. We then buy stocks that will benefit most as the world changes. In stock investing, that’s the sweet spot where you find the most value in the shortest period of time.

Our goal is to beat the S&P 500 every year. We want our readers to have enough success to irritate their wealth manager. Hopefully, they can use that success and the lessons learned in The Casey Report to beat the market in their asset buckets.

J.S.: Thank you for your time, E.B.

E.B.: You’re welcome.

In August, E.B. told his readers to buy a small North American mining company. At the time, few investors knew about the company. Its stock traded for less than $1. But E.B. said the stock wouldn’t fly under the radar for much longer…and he was exactly right.

In just four months, this stock has soared 115%. Normally, we wouldn’t encourage you to buy a stock after an explosive run like this. But E.B. recently went on record and said, “the stock doubled, it will double again.” To see why, watch this brand-new presentation. It talks about an event that E.B. says will take place exactly one month from today. If the event goes as expected, this stock should skyrocket again.

You can learn more about this event, including how to take advantage of it, by watching this FREE video.

The article Five Easy Ways to Make Your Finances Less Fragile was originally published at caseyresearch.com.



Stock & ETF Trading Signals

Tuesday, December 6, 2016

How to Use the New Market Manipulation to Your Advantage

It's time for another one of Don Kaufman's wildly popular webinars. Don’t miss this live online seminar, How to Use the New Market Manipulation to Your Advantage, with Don Kaufman this Tuesday December 6th. at 8:00 PM New York, 7:00 PM Central or 5:00 PM Pacific.

During this free webinar you will learn:
  • How scarcely used recent additions in market structure have forever changed how we view price movement and volatility.
  • What weekly strategy you can use to take minimal risk and produce astonishing returns surrounding predictable or manipulated movements in any stock, ETF, or index.
  • The one product that has become statistically significant in determining the next market move so whether you're a long term investor, swing trader, or intra-day trader you can get tuned into what's driving today's marketplace.
  • How you can use market efficiency to your advantage in all aspects of your investments, retirement accounts, stock and options trading accounts, futures trading and more.
  • How you can trade up to several times per week without having to continually monitor your positions, "set it and forget it" with this low risk high reward trade.
      Don's Webinars have an attendance limit that we always hit. This one will be no exception.

      Visit Here to Register Now!

      See you Tuesday night!
      The Stock Market Club




Wednesday, September 28, 2016

Carley Garner's "Higher Probability Commodity Trading"

Carley Garner's new book "Higher Probability Commodity Trading" takes readers on an unprecedented journey through the treacherous commodity markets; shedding light on topics rarely discussed in trading literature from a unique perspective, with the intention of increasing the odds of success for market participants.

In its quest to guide traders through the process of commodity market analysis, strategy development, and risk management, Higher Probability Commodity Trading discusses several alternative market concepts and unconventional views such as option selling tactics, hedging futures positions with options, and combining the practice of fundamental, technical, seasonal, and sentiment analysis to gauge market price changes.

Carley, is a frequent contributor of commodity market analysis to CNBC's Mad Money TV show hosted by Jim Cramer. She has also been a futures and options broker, where for over a decade she has had a front row seat to the victories and defeats the commodity markets deal to traders.

Garner has a knack for portraying complex commodity trading concepts, in an easy-to-read and entertaining format. Readers of Higher Probability Commodity Trading are sure to walk away with a better understanding of the futures and options market, but more importantly with the benefit of years of market lessons learned without the expensive lessons.

Get Higher Probability Commodity Trading on Amazon....Get it Here!