|
“Over-indulgence and misbehavior
by those with too much money and no risk control creates an atmosphere
wherein common sense goes out the window.” -Traderrog
It’s not difficult for us to
report upon and discuss a nasty pile of negative events. Seemingly, our
central bankers and politicians are quite adept at creating new and severe
problems. We can engage and be part of their psycho-pathetic schemes; or in
the alternative, dig through the rubble and find some good stuff for
ourselves, our families, and our friends. In a historical trading and
investing review of the 1926-1946 era, it’s
easy in hindsight to see who had the vision and intelligence to not only survive,
but to also become wealthy and wildly rich.
Most think the 1929 stock market crash
in New York was a big surprise. For the greatest trader of all time, it
wasn’t; it was just another day at the office. Jesse Livermore was
going short in those markets as early as 1927 when he ran his usual market
tests, taking small bite-sized trades to watch the tape reactions. Some of
his shorts began to make money in late 1928 and of course with a huge rush in
1929.
With the real estate crash in 1926 in
Florida (a really big deal in those days), Livermore knew where things were
headed with the Bubblemania of the
roaring 1920s. As a superior trader he knew that when the markets’
rubber band is stretched too far, the snapback could be an adventure. That,
obviously, was the outcome in 1929.
While the majority of the stock herd
went blindly over the cliff in 1929, Livermore was shorting everything he
could find. Even after his shorts were making tons of cash he would increase
the trade, to make market selling go ever faster as he scooped-up his
winnings.
Livermore then got busy going the other
way entering long to shift the tide. After all, he had to get out and needed
the other side of the trade as well. Further, if the markets are your
business, your life, and your very existence, why would you stomp them to
death for one monster trade?
Few understand that the 1929 smash was
one of only three or four in that era. First the 1926 Florida smash, then
came 1929 followed by 1932-33, with a couple more all the way to 1942. The
1937-1938 -45% smash was nearly as ruinous as 1929. Three times investors and
traders got smacked down after thinking the worst was over. However, we all
know, it ain’t over until it’s over. In
an earlier 1920-1921 Depression in the USA, government folks did not meddle
and it was all over by itself within just 18 months. This is proof natural
market forces work by them selves.
Do you think the Florida real estate
smash could be considered similar to the June, 2006 event in the US? No only do we think so, but the following 2008 Lehman
cruncher was just like 1929 or even replicated the 1908 Panic.
Over-indulgence and misbehavior by those
with too much money and no risk control creates an atmosphere wherein common
sense goes out the window. However, this time it truly is different. Central
bankers have encouraged extreme and illegal shenanigans by Big Boy Bankers
and hedge fund operators. Now, there is no going back as the global system
moves to its final conclusion.
The party was great fun while it lasted,
but now the vultures are circling, as opposite party politicians are licking
their chops in preparation to prepare the voting burial of their enemies.
When the ship of state and the
congress-parliaments tip-over, the rats scurry to save themselves
and toss their garbage and toxic criminal actions onto their opponents.
It’s kind of like a wild party to see who can savage each other first.
The American people, the voters, and
calmer, cooler heads throughout the world are watching this, aghast. While
those experienced, sharp observers over the past 50 years could not imagine
anything like what we are seeing today, in actuality, there have been periods
in the USA when these things were on the political table.
From our observation, the Sheeple have about had it with crooked politics, central
bankers, Big Boy Bankers and
government bureaucrats’ wild antics. While the public cries for “Do
something! Somebody, please!” are prevalent, the truth is you
cannot stop it until: (1) some unforeseen terrible event rudely stops it for
us all, or (2) the bond markets collectively fail, taking away the
taxpayer-money-honey-pot-feeding-trough from this pack of criminal fools.
Our bet says the bonds tank and their
punch bowl is taken away. In desperation, having so much to lose, these
idiots will do anything whatsoever to keep the game in play. The smart ones,
who know this could be the final hurrah, are scrambling for the last big
theft before they run for the hills with their stolen loot.
Considering This Situation What’s
The Best Approach For Little Folks?
We contend that you just ignore as much
of the mayhem as you can and take the high road to pick -over the carcass of
these markets in a search of legal profits.
Here are some simple suggestions that we
think can work, and have been working for us, and our readers.
1.
Get out of debt and stay out of debt.
2.
Find an income that can withstand a
prolonged depression. Think: daily needs fulfilled.
3.
Stay out of stocks unless you know what
you are doing and have an emergency exit strategy.
4.
Do not use a bank safety deposit box.
Now there is real oxymoron if we’ve ever heard one!
5.
Hold 3 months cash in small bills in the
house (not in the bank) for emergencies.
6.
Buy gold and silver US or Canadian coins
held/hidden at home for capital preservation.
7.
Keep medical and dental needs up to date
for self and family.
8.
If you have life-saving prescriptions
needs, get the doctor and druggist to provide at least a 90-day supply or
longer.
9.
In your home, store 3-6 months of food
and water for family and pets. Rotate for freshness.
10. Have a
generator for emergency use in a power failure.
11.
Keep gas tanks full for your vehicles.
Some are opting to have bikes and motorcycles handy as alternatives.
12. Tighten
security around your travels, vehicles and home. No showing-off fancy stuff
to incite criminals.
13. In general,
stay under the radar and try to be as inconspicuous as possible in outward
appearances.
14. We think
small towns but not very remote homes and farms are better than big cities.
The ability to walk to everything in a small town has merit. Make new friends
there.
For Investors And Traders
Get out of and stay out of all bonds of
any kind.
While some funds are fine, we prefer
hard assets and a trading account. Find out who is running your accounts and
where the money is. Be very careful here as more financial companies will
bite the dust. We are seeing new fear of currency funds as they have investments
in Europe, too.
We strongly dislike emerging
nations’ investments, and most anything in Asia or Europe.
Own a business providing
products/services consumers MUST HAVE EACH AND EVERY DAY.
One of our readers bought a small town
hardware store (not for sales or to make money, but to own the inventory
for trading). Also, his hidey-hole is an upstairs apartment.
Investors and traders are going to have
to move toward faster investing and trading. Enter ideas with a firm exit
strategy. If you can use stops for automatic exits (either long or short),
that’s a good idea. One of our top contacts in Florida trades large and
told us she has to trade more often and take smaller bites of the apple. She
is a top S&P trader with daily open positions of $500,000+ using futures.
Her research, which is run by three smart, top-dog women assistants, is
legendary.
Stay with a smaller number of trades and
markets. Buffet says: more diversification equals more ways to lose money.
Make a small basket and watch the basket like a hawk.
Owning positions in Canada is a good
thing as Canadian banks are in better shape. The Canadian dollar should hold
up better than the US dollar, over time. Oil shares and oil trading will be
an adventure. Those that are quick can make money. Most in this sector can
get hurt with skimpy knowledge. Be careful.
If you have larger accounts it might be
wise to pay cash for someplace you can live. For a long time, we liked
renting but with so many markets that have seemingly hit bottom and stopped
selling, how low is low? A smaller owned property-home (not leased), can have
merit as you are owning a hard asset that cannot
dissipate over time. Do not expect to make money using a home as a piggy bank
and do not borrow against it when it’s paid off. As much as possible,
keep real estate taxes paid in advance and insurance up to date. I think
$250,000 in a good paid-for house is now better than $250,000 in a mutual
fund.
If you own precious metals shares be
sure the company has 2-3 year’s cash and a senior pperating
miner next door to take them out when they prove-up good reserves. Leased
farm land is good to own for income for several more years in the right
locations.
In summary, the 3rd
quarter of 2012 will be a set-up quarter for those traders and investors
moving toward positions that can profit from all this forthcoming excitement
arriving in the 4th quarter.
We strongly suggest that if you are not
experienced in managing big, faster moving messes, it might be easier to go
and buy physical gold and silver and take possession. This way you can
eliminate any counter party risk and if you need some cash later on, the
metal brokers are more then happy to buy it back
and very quickly, too. This trade is safer and liquid.
Most of our readers of these essays and
in our Trader Tracks Newsletter are primarily stock traders and
investors. At this juncture they are wondering and worrying as to when
markets will return to new rallies, pulling-up their beaten down stock
positions.
The precious metals stocks (the best of
the best) will begin to react almost immediately when gold and silver begin
new rallies. However, most of them usually take 2-4 weeks longer in a
precious metals reaction before any substantial shares movement.
Follow monthly charts first and discover
the best time of year for your favorite markets. Then, work backwards using
weekly charts followed by dailies. For the most part, we have learned that
swing trading (a few days to a few weeks) is easier to manage for us.
However, some traders enjoy the scalping
game doing 150 trades each day finishing the session and then going flat
overnight. Find what suits you best and above all control risk first. The
balance of your earnings will often take care of them
selves. –Traderrog
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
|
