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A continuing
stream of packaged news is designed to bend ideas and thinking because they,
of course, know better than us. The reality is “they”
are determined to install “their” thinking and
ridiculous unreality into our minds and pocketbooks…in a serious effort
to empty it for their benefit. Mostly, this is old paradigm stuff with rules
and ideas drilled into peoples’ heads for decades. Changing times call
for changing ideas. If you’re stuck in the last decade you might pay a
hard price.
When some
public figure in government, in higher education or in a corporation makes a
statement that has no reason for utterance, most often there is an
agenda behind the words. When some lackey is repeating himself with vigor,
it’s normally to sell an idea that aligns with their schemes or
attempts to get you to think like them. For investors and traders this can be very
dangerous to your accounts. Face reality and understand it on your terms.
The winners
in trading and investing take the time to assess situations and read about
those relative ideas (both positive and negative). Each of us has different
objectives, varying account sizes and contrasting appetites for risk. In our
current environment a one-size-fits all fund for your money is really scary.
“Lemmings
became the subject of a popular misconception that they commit mass suicide when they migrate. It is not a mass
suicide, but the result of their migratory behavior. Driven by strong
biological urges, some species of lemmings may migrate in large groups when
population density becomes too great. Lemmings can swim and may choose to
cross a body of water in search of a new habitat. In such cases, many may
drown if the body of water is so wide as to stretch their physical capability
to the limit.
“Because
of their association with this odd behavior, lemming suicide is a frequently
used metaphor in reference to people who go along unquestioningly
with popular opinion, with potentially dangerous or fatal
consequences.” - Wikipedia
Common
Misconceptions in Today’s News – PART ONE
Fund managers
know better than you where your hard earned money should reside. They prefer
that it be in their fund where you must park it for years. This way they can
take their 1-2% annual fee plus an average 20% of the net. While we are
certain they would like to earn nice gains for you, the reality is, many of
these managers could care less as long as they get theirs. This game is a
goner in our view. We are not totally against buy and hold but rather suggest
that trading often (not day trading) has distinct advantages. Look over the
following ideas and misconceptions we think are fraught with wild risk.
1. Bonds are a safe place to earn money.
They contain less risk than stocks, particularly municipal bonds. Both
Meredith Whitney and Trader Tracks said years ago that when communities had
the inability to keep taxing and taking, they would be in a world of hurt.
It’s happening now and spreading fast in California. Yet, more bond
paper is being sold to credit-buying lemmings. Bond interest is paid from
taxes. Taxpayers cannot pay as they are broke in increasing numbers. We strongly advise against these kinds of trading products.
2. Forex trading is great fun, quite safe and
risks are contained. There have been several of these Forex
wild-west types of trading operations that have closed down. If you want to
trade currencies, get an experienced broker, learn about 2-3 currencies and
focus on trading the big futures currencies markets. Stay away from cartoon trading.
3.
You can earn
money with no risk. We don’t care what anyone says; even the
most conservative trading and investing ideas have some risk. There is
risk every day in the morning when you arise to meet the day and go to work.
If you are trading or investing you have some degree of risk. Learn to
control it as best you can. Trade or invest with a solid plan and a strong
focus.
4.
Big banks are
solvent and have cleaned out all their bad debts from balance sheets. There are
trillions in bad debts hidden in the back rooms of global banks all over the
world. In our opinion, they dumped all their toxic debt trash off the balance
sheets and are currently reporting in denial of horrid bad debts existence.
If all toxic derivatives and bad loans were recorded and reported on updated
balance sheets, in essence, these banks would be insolvent and bankrupt. They
are living on fiat paper from the Federal Reserve and US bond spreads.
5.
Gold and
silver are dead products. They don’t earn interest and are for fools. This one is
simple. Look at gold’s value in 2000 and what it’s worth
today…the same for silver. We will compare those gains against most
anything else spanning more than a decade. Guess what? The best is yet to
come as 80% of the whole upside historically lands in the last six months of
a multiple years’ rally.
6. Gold and silver shares are a poor investment.
This
is a precious metals’ stock market. You can buy and sell companies of
all sizes. Those who made good decisions have earned a pile already. If
you’ve made serious gains and have given the upside back, stay in the
game, be selective and trade less. We like a handful of juniors and a few
more senior stocks as good choices. Faster
traders can buy call
options.
7.
Get into blue
chip companies and hold the shares forever. How many big blue chip
companies trading in 1925 lasted until 1946 after the war was over? They have
risks too, just like any other stocks. Watch the Nasdaq
100 for trading signals that forecast trends for the stock indexes as an
entire group. It’s reported some billionaire traders are in precious
metals and nothing else. We are not so sure of that, but it is a trend.
8.
Your 401K and
IRA funds are totally secure. You cannot lose whatsoever. We can see
potential for mismanagement of these funds just like any others. Those
managers try to do a good job but they are at the mercy of credit markets,
international politics, tax changes, etc. They have advantages, but it is
advised you understand the fund rules and exit strategies.
9.
Real estate
keeps rising with inflation. Buy now with a cheap interest loan and borrow to
the hilt. Inflation will grow and pay off your home. Real estate is a great
investment. Ask a homebuyer in Las Vegas who purchased at the peak between 2003
and 2006 how well that worked out. That cycle saw +100% gains in housing
values. Then, with the following crash, many held mortgages owing thousands
above current values. With mortgage derivative slicing and dicing of loans,
many do not know whom they should pay on open mortgages. This industry is a
gigantic mess that won’t be untangled for a decade. If you are a buyer,
know the values and expect to be in that place for a very long time, as it
may not be eminently saleable.
10. Stock and bond markets cannot crash. The
Federal Reserve will prevent major damage. We have all seen scary stuff in 1987, 1996, 2000
and 2008. The next one could be only weeks or days away. On the other hand,
we could mush along in rising interest rates, inflation and depression for
years…until the next war starts for a new jobs program. Nothing is crash proof.
11.
All major
international currencies are safe. Be in a money fund for growth. We’ve
all seen and heard about the Zimbabwe currency. Toilet paper is worth more.
How about disasters in South America, Greece, Iceland, Ireland, Venezuela and
a few other nice places where currencies were previously viewed as safe?
Tragedy has ripped apart the economic and social fabric of those nations and
has left their money degraded.
12. Your Social Security is secure. In a few
years it will be there for you for sure. It’s common knowledge that Social Security
is not safe in an account somewhere, but was deposited directly into the US
Treasury General Fund where spending has gone wild. Which would you rather
own: $100,000 in future social security payments or physical gold and silver
paid for with your Social Security money?
13. Taxes are fixed. They won’t go up
any more. We’ve heard that story before and can observe the aftermath:
Herculean debt. Congress and the local states and communities cannot seem to
control spending so they keep raising taxes and installing new ones. You have
no choice but to pay or move out. Look at Europe. How much longer can they
remain standing?
14. Congress contains a hard-working group
of people who have your welfare at heart. By law, members of congress have to pass a
national budget, yet they have not done so in three years. Next, they
continue to add taxes to maintain raises and perks for themselves not
available to the folks who pay them. They argue and fight over stupid stuff,
pass more stupid rules and take more days off than ever. This is not a
responsible body of people elected by the taxpayers to do a job. They should
get one term only and be obliged to pass the necessary minimum rules or
return their salaries.
15.
The Federal
Reserve is a division of the federal government designed to regulate and
control the national economy and prevent recessions and depressions. The Federal
Reserve is a private banking cabal that is set-up to enrich private bankers
and their colleagues at the expense of the national citizens. Since 1913 they
have been robbing the electorate by printing phony fiat money and bond paper
and lying about it.
16. Central banker bonds, bills and paper
are super safe and very liquid for entry/exit. Some of it is for now, but this
will change with the amount of confidence buyers have in the paper. As risk
increases, investors demand higher yields. If the seller cannot pay the
interest or the confidence is lost, the paper is just junk.
That’s why some high yield paper is called junk…because
it’s junky.
These ideas
are common in the news and on the street. If you believe this nonsense, you
will believe anything. Wake up!
Stuff That
Works
Understand
your market and educate yourself to do a few things right. You do not need 50
stocks and 40 others to make money. Some of the best of the best do only one
thing. Look where you would be right now if you had piled into physical
gold and silver in the year 2000.
While all
eyes are on Europe’s destruction, the USA’s test comes November
6th. It might even arrive sooner if the broader stock markets slide out of
control during September 23-25.
Meanwhile, we
suggest you gravitate toward physical gold and silver and only the
best-of-the-best of related stocks supporting that view. In our work, we are
busy looking for options and selling ideas for the broader stock markets
heading toward the dustbin of destruction. Last week we recommended two new
ones in Trader Tracks Newsletter. We
see more coming in this new seasonal beginning.
The Greater
Depression Repression II is swiftly taking hold now and layoffs
will be legendary. Housing has an additional -20% drop from the current USA
national average. Joblessness goes to 30%-35% and food stamps reach over 50
million to 60 million. We will get a 2013-2014 World War in the Middle East
and when Obama is reelected, inflation goes to hyperinflation. Not happy
stuff but it’s not the end of the world either.
Somebody
please tell us when the global bond markets crash for good and we’ll
tell you when this can all get better and we can start all over again, maybe
with a partially backed fiat gold currency.
Roger Wiegand
www.webeatthestreet.com
Contact Claudio Bassi, at Trader Track’s New York City publishing
offices for a trial subscription. Call
718-457-1426 Monday through Friday, 9:30am to 5pm or,
e-mail cbassi@miningstocks.com
Recommendations made in “Trader Tracks”
are exclusively those of Roger Wiegand and the
publication is also exclusively the editorial content provided by Roger Wiegand. TAYLOR HARD MONEY ADVISORS, INC. (THMA)
LOCATED AT 33-42 61ST STREET, WOODSIDE, N.Y. 11377, ASSISTS IN THE MARKETING
OF “TRADER TRACKS.” However, the views expressed in Trader
Tracks do not necessarily reflect those of THMA (Website:
www.miningstocks.com). Because individual investment objectives vary, this
summary of investments should not be construed as advice to meet the needs of
any particular reader or subscriber. Opinions expressed in Trader Tracks are
statements of judgment expressed at the date and time they were written, and
as such, are subject to change without notice. Roger Wiegand
is not a CFA nor an investment advisor, but a private individual who studies
the markets extensively and offers summary opinions. Before any type of
investment is made, you should always seek advice from your attorney, CPA,
registered broker, or financial advisor. There is considerable risk in market
speculation and investing. There are no guarantees regarding performance and
past performance provides no guarantee of future performance. Your trading
accounts are always subject to the potential for severe or total losses. This
service will involve SPECIAL EMAIL ALERT TRADING RECOMMENDATIONS PROVIDED
AT ANY TIME Roger Wiegand believes it is
opportune to trade either in or out of the market in question. AS SUCH,
THIS SERVICE WILL BE CONSIDERED A PREMIUM SERVICE. The management of
THMA, Inc. does not anticipate trading in the securities recommended in
Trader Tracks. No statement or expression of any opinion expressed herein constitutes
an offer to buy or sell the securities mentioned herein. Trading futures
contracts may not be suitable for all investors. You may lose a substantial
amount of money in a very short period of time. The amount you may lose is
potentially unlimited and can exceed the amount you originally deposit with
your broker. This is because trading futures is highly leveraged, with a
relatively small amount of money used to establish a position in assets
having a much greater value. If you are uncomfortable with this level of
risk, you should not trade futures contracts. If you need a broker, contact
mine, Ryan Olson, Managing Partner, Jackson-Olson commodities at 800-352-5228
or by e-mail rolson@jacksonolson.com Contact Jackson-Olson Commodities, LLC,
5510 Abrams Road, Suite# 101, Dallas, Texas 75214. Local Telephone is
214-691-8600. Fax is 214-691-8614. Jackson-Olson clears trades through R. J.
O’Brien founded 1914. They provide clearing and execution services in
virtually all markets around the globe. To subscribe to Trader Tracks stocks
& bonds, futures & commodities, contact Claudio Bassi
with e-mail CBASSI@MININGSTOCKS.COM
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