saveyourassetsfirst3 |
- Long Term Trend for Gold and Silver Is Intact
- Gaddafi and Gold: A Hidden Cache in Libya?
- Asset Correlations to S&P 500
- Iran Hoards Gold to Cut Exposure to Dollar
- U.S. Dollar's Reserve Status Is Tested
- Gaddafi and Gain for Gold Miners
- Musings on a Big Mining Merger: BHP Billiton and Alcoa
- U.S. Housing Collapse Now Exceeds ’09 Lows
- Endeavour Silver Reports Record Earnings, Cash-Flow and Revenues in 2010
- In India Post Office is selling gold coins like hotcakes
- Gold at Resistance
- Interview With a Trading Legend, Part II: Mental Milestones
- Fourteen funny – and not-so-funny – statistics about the "economic recovery"
- Pimco: Forget Treasurys... Buy these bonds instead
- Supreme Court gives Federal Reserve five days to release secret bank loan details
- Gold SHOCKER: Secret Iran gold holdings leaked
- Extorre Drilling at Union Domes and Cerro Puntudo Projects
- Official gold data is no good?
- One Opinion on Markets
- Panic Selling of U.S. Dollar Could Happen Quickly
- New York Sun: Von NotHaus is guilty but Bernanke is innocent?
| Long Term Trend for Gold and Silver Is Intact Posted: 22 Mar 2011 06:30 AM PDT Jeb Handwerger submits: It's very difficult for a trader to stick to a plan and not let news events dictate decisions. But every once in awhile there are news items that come along and attempt to trip investors up, forcing some to take their eye off the big picture. Many of us understand the long-term potential of precious metals and commodities, but the emotions -- either unbridled enthusiasm or gloom and doom -- of the herd often affect our decisions negatively at short-term turning points. This past week the news out of Japan (iShares MSCI Japan Index (EWJ) affected the majority of investors, who liquidated their positions and ran to the US dollar (UUP) and to long-term Treasuries (TLT) as safe havens, which I believe was a mistake as the G-7 came to the support of Japan. Margin calls were issued and the fire sale intensified due to the hysteria produced by the Complete Story » | ||
| Gaddafi and Gold: A Hidden Cache in Libya? Posted: 22 Mar 2011 06:14 AM PDT Dian L. Chu submits: Speaking through a telephone call to state television, Libyan leader Moammar Gaddafi delivered quite a defiant tirade on Sunday, March 20, vowing a "long war to victory" and pledging retaliation against the international military action that's descended upon Libya. Many military experts have suggested that the number of troops loyal to Gaddafi could be fewer than 10,000, and argued that Gaddafi will not last long at all. Moreover, U.S. and European governments have imposed sanctions and frozen Libyan assets worth billions of dollars, including the central bank, sovereign wealth fund and state oil company, resulting in the cutting off of funding for further support activities -- unless Gaddafi has a hidden pot of gold or two somewhere. As it has turned out, the "long war" threat from Gaddafi may not be as emply as some might think. The Financial Times on March 21 cited data from the International Monetary Fund Complete Story » | ||
| Asset Correlations to S&P 500 Posted: 22 Mar 2011 05:56 AM PDT  Hickey and Walters (Bespoke) submit: The charts below summarize the rolling six-month correlation between the S&P 500 and other asset classes (Oil, Treasuries, and the U.S. Dollar Index). As shown in the top chart, the S&P 500's correlation to oil remains highly positive and near the high end of its range of the last 10 years. While oil and stocks are positively correlated, stocks and bonds have an extremely inverse correlation. In fact, the two asset classes haven't been this Complete Story » | ||
| Iran Hoards Gold to Cut Exposure to Dollar Posted: 22 Mar 2011 05:35 AM PDT Iran Hoards Gold to Cut Exposure to Dollar Tuesday, 22 Mar 2011 10:19 AM Article Font Size   By Forrest Jones Iran has been stockpiling gold and selling dollars to reduce its exposure to currency volatility and also to cut its chances of seeing Washington seize its assets, a senior Bank of England official says. According to a U.S. diplomatic cable obtained by WikiLeaks and observed by the Financial Times, Andrew Bailey, head of banking at the Bank of England, tells a U.S. official that U.K. monetary policy authorities have been observing "significant moves by Iran to purchase gold," and adds the buying "was an attempt by Iran to protect its reserves from risk of seizure."
Other Middle Eastern countries have been buying gold as well, and they're doing it quietly, away from the prying eyes of the International Monetary Fund, a multilateral lending institution. "The totality of central bank reserves is not what is reported to the IMF," says Philip Klapwijk, executive chairman of GFMS, a precious metals consultancy. "There's probably another 10 percent on top of that." Investors normally buy gold when the world's reserve currency, the dollar, weakens. That's been the case for the past few years and should continue to be so in the future. According to a poll of about 6,000 people, 47 percent believe gold prices will finish 2011 between $1,500 and $1,800 an ounce, up from current prices around $1,425, The Street reports. © Moneynews. All rights reserved. Read more: Iran Hoards Gold to Cut Exposure to Dollar | ||
| U.S. Dollar's Reserve Status Is Tested Posted: 22 Mar 2011 05:28 AM PDT The LFB submits: Since the inception of quantitative easing programs by the Federal Reserve and fiscal expansion policies by major central banks during the course of 2010 and 2011, traders and investors have had to adjust fair value on each of the global classes, and adjust what each can be expected to return when running through unique and challenging economic times. Be it equities moving from a long-term investment to a high-frequency low-volume trading vehicle, or be it the balancing of bond yields to bond values, or bullion trade to bullion investment, there have been massive changes in the perception of safety, risk, and expectancy over the course of the last 18 months in any asset class. Complete Story » | ||
| Gaddafi and Gain for Gold Miners Posted: 22 Mar 2011 05:09 AM PDT Marco G. submits: It was with a bit of interest that I read this article: "Gold key to financing Gaddafi struggle." Since there is a bit of a hassle to sign up to read this, the key section is reproduced below:
Complete Story » | ||
| Musings on a Big Mining Merger: BHP Billiton and Alcoa Posted: 22 Mar 2011 04:57 AM PDT David Urban submits: Merger and acquisition activity in the commodity sector has been growing over the past few months. Inmet Mining (IEMMF.PK) and Equinox Minerals (EQMIF.PK) are locked in a bidding war for Lundin (LMC), BHP Billiton (BHP) acquired of Chesapeake Energy's (CHK) shale gas field, and Newmont Mining's (NEM) $2.3 billion dollar purchase of Fronteer Gold Inc. (FRG) stand as a few recent examples. Mid-tier commodity producers are looking to add assets, while major metal producers across the board are flush with cash and surveying the landscape. The big question is: What assets are likely to be in favor and acquired next? While natural gas is the obvious choice, due to its low price from high inventories and increasing production, there are some questions regarding recent purchases as evidenced in the Marcellus Shale region, where resource estimates appear to be overly optimistic. An alternative -- off the radar screens of many investors Complete Story » | ||
| U.S. Housing Collapse Now Exceeds ’09 Lows Posted: 22 Mar 2011 03:36 AM PDT After two years of U.S. "economic growth" and two years of U.S. "jobs growth", the U.S. housing market has now plummeted lower than at the "bottom" of the original crash. How can this be? Regular readers can easily answer that question. There has been no U.S. economic growth or jobs-growth. The supposed "gains" in GDP (quarter-after-quarter) are nothing more than the automatic statistical consequence of lying-about-inflation. Quite simply, every percentage point that the U.S. government understates inflation automatically exaggerates economic growth by an identical amount. For those not conversant with these statistics, all GDP reports must be "deflated" by the full rate of inflation, otherwise rising prices will be mistaken for increased growth. This is why lying-about-inflation is so popular, especially with Western governments – it's a lie which always produces a two-for-one pay-off. On the employment front, the U.S. Bureau of Labor Statistics has methodically twisted all sources of primary data, turning any and every employment report on the U.S. economy into 100% fiction. The empirical evidence paints a clear picture. House prices continue to plummet and inventories of empty, unsold homes continue to grow – despite housing starts sitting at record-low levels month after month. Another disastrous holiday shopping-season clearly demonstrated the lack of purchasing-power which comes from a lack of jobs. The line-ups for food-stamps in the U.S. get longer and longer every month, and no thinking adult who looks at the chart below could possibly believe the myths of a "U.S. economic recovery" or U.S. jobs-gains.
As I have noted in past commentaries, the tiny "blip" in that chart which we see late in 2008 is where the U.S. government tells us that the U.S. economy "hit bottom", while the steady rise upward in food-stamp usage since that "bottom" is the supposed "recovery". This brings us to the housing market, itself. Yesterday, the U.S. government reported that housing prices plummeted below the "lows" in the original crash, back in early 2009. Home prices have now retreated (on a nominal basis) back to their levels of 2002. However, that grossly understates the collapse in prices in this market – as it ignores the nine years of inflation which have occurred between then and now (the same "inflation" which the U.S. government insists does not exist). | ||
| Endeavour Silver Reports Record Earnings, Cash-Flow and Revenues in 2010 Posted: 22 Mar 2011 02:45 AM PDT Endeavour Silver Corp. (TSX:EDR)(AMEX:EXK)(DBFrankfurt: EJD) announced today record earnings, cash-flows and revenues for the fourth quarter and fiscal year ended December 31, 2010, thanks to the Company's sixth consecutive year of growing silver and gold production, lower cash operating costs and higher precious metal prices. | ||
| In India Post Office is selling gold coins like hotcakes Posted: 22 Mar 2011 02:02 AM PDT In India Post Office is selling gold coins like hotcakes From the humble post office to the bank, Indian consumers are lining up to buy gold. While coins are a current favourite to give-away during festivities, investors fearing the worst are hoarding gold bars Author: Shivom Seth Posted: Tuesday , 22 Mar 2011 MUMBAI - The humble post office is the latest organisation to get into the gold act in India. Standard 24 carat gold coins have been selling like hotcakes at over 466 post offices dotted throughout the country. Despite the current high price, Indian consumers have been buying small quantities of coins to give as gifts during the festival season. With the spring, harvesting and wedding season all in full swing in India, demand for the yellow metal has shown a substantial climb. The gold coins are manufactured by Valcambi in Switzerland. ``Apart from enhancing the revenue of the postal department and services, the move has enabled us to usher in a new image of the India Post as a modern and relevant organisation. Gold coins are showing to have an immense pull-factor with the younger generation,'' said a postal official, requesting anonymity. Keeping in mind the excitement that has been generated and the great sales, the Indian government has extended its novel scheme to sell gold coins through almost all the post offices in various states across the country. The Department of Posts introduced the project through select post offices in October 2008. At that time, demand was slow but slowly the idea appears to have caught on. In the first phase of the project, gold coins in the denomination of half gram, one gram, 5 grams and 8 grams were sold in over 100 post offices in Delhi, Tamil Nadu, Maharashtra and Gujarat. The initiative was then introduced in Punjab, Andhra Pradesh and Rajasthan. The postal department had also entered into a tie-up with Reliance Money to sell gold coins at discounted prices. The discount offers have been encouraging people to buy more of the precious metal. ``The move ensures pure gold and makes it available to a larger set of consumers, in lower denominations, at a convenient price point. It can also be sold in what were earlier considered remote locations. All of this boosts the demand for gold significantly,'' said V Gurnani, director of Reliance Money, which has teamed up for the venture. Moreover, with the India Post offering 5% discount to its customers during the festive season, the move has prompted a large number of customers and small investors to queue up to get gold coins. Post offices have also been selling gold at a 5%-7% cheaper rate than banks such as ICICI Bank, Axis and HDFC Bank, all of which has helped the growth momentum. Indians consider it auspicious to buy gold during the festive season, and especially when the goddess of wealth, Lakshmi, is worshipped. Given the huge demand from its customers, the government has taken the initiative to keep post offices open on most festival days to sell gold coins to interested customers. Banking initiative It is not just India's gold merchants in the post offices that have been expecting a sustained pick-up in sales during festival times. The banking sector too has seen a renewed demand. ``There are several factors that aid sentiment - a reviving economy, prosperity and higher savings are changing the way Indians perceive gold,'' said Shreevardan Shetty, a senior official in a prominent gold importing bank. He added that the investment demand was more a function of disposable income as the overall savings of the country has seen an increase. On Friday, both the precious metals, gold and silver, recovered sharply on the bullion market buoyed by a firm global trend. Trading sentiments have turned bullish for the yellow metal after it advanced in the global markets, triggered by the unrest in Middle East and Japan's nuclear crisis. All these developments have boosted demand for the precious metals as an alternate investment. Banks have been reporting good sales despite high gold prices and mainly due to the geopolitical situation and a weakening dollar. Inquiries at banks reveal that there is a growing demand for gold bars - from 1gm to 117 gm, with the bullion continuing to be a safe haven for many discerning investors. ``While there are a lot of buyers for finished jewellery, there is clearly a renewed interest in gold coins and gold bars,'' another banker said. Several Indian banks offer term deposits banked by deposited gold in amounts as small as 500 grams. Banks also offer loans for purchasing gold jewellery. These loans are generally targeted at the working woman between 18 and 55 years of age. Bankers said many speculators have been creating fresh positions on the back of a firming global trend. They added that trading sentiment climbed even as allied aircraft began to enforce a no-fly zone over Libya. ``Investors' taste buds for precious metals, especially gold, have been whetted because the value of these metals has increased substantially over the years and especially during political turmoil. The political conditions across the world and the Libyan crisis are all set to hike prices further,'' said another banker. He added that several investors have been buying gold and other precious metals as a hedge against inflation, market uncertainties, and the fear of a stock market crash. http://www.mineweb.com/mineweb/view/...ail&id=110649 | ||
| Posted: 22 Mar 2011 01:15 AM PDT We continue to do extensive research into the various companies we would like to be able to game if the market will provide the kind of good entries we like here at Got Gold Report. It is a tedious process, but one that is absolutely necessary. We want to be able to have the confidence to put in our Stink Bids when the time comes and without research (and sometimes a connection with management) there cannot be any confidence. Using SPDR Gold Shares (GLD) as a proxy for gold, it is pretty obvious that gold is at or near known resistance. One wonders that if gold has so far been unable to break out to convincing new highs with all the recent global unsettling events and with the U.S. dollar so bloody weak, what kind of catalyst will it take to push gold up and into the probable congregation of buy stops and short trailing stops that by now reside not far above the most recent highs. ... | ||
| Interview With a Trading Legend, Part II: Mental Milestones Posted: 22 Mar 2011 01:14 AM PDT
In Part I of this Mercenary Vault series, we introduced you to Peter Brandt — a 30-year veteran trader with 41.6% annual compound returns. Part I covered Peter's entry into the Chicago futures markets in the 1970s… his experiences as a "customer's man" and early commodity hedger… "going bust in little bits" and finding his feet as a chartist… and the currency trade that really put him in business as a trader. In Part II we cover (among other things) mental milestones… teaching opportunities… win/loss ratios and drawdown realizations… position size and leverage considerations… and Peter's ideal trading conditions as a chartist. This interview series is part of the Mercenary Vault, an archive of exclusive high quality materials available to Mercenary Dispatch subscribers. The Dispatch is our means of direct communication (via email) with Mercenary community members — and it's free! Sign up here and don't miss out on future exclusives. And now to Part II… Note: This interview is Part II of a series. Also available:
JACK SPARROW: So around the time of your breakout trade in the currency markets, what steps were you taking to become a trader? What were some mental milestones on your journey? PETER BRANDT: Trading based on charts made sense to me, but just saying this does not start to explain the amount of work that was ahead of me. I just started systematically figuring out the charts – by this I do not mean the simple recognition of patterns, but rather the practical challenges of trading in real time. It's fine to be a chartist, but what does it mean to be a chart trader. Analyzing charts and trading the charts are two entirely different challenges. Do I trade one-week patterns? Two-week patterns? Reversal patterns or continuation patterns? Where do I place protective stops? How do I enter a trade? Working through the process just took time. In fact, this process continues to this day. You just keep working through the mechanics of how you conduct the process of trading. What's your game plan? How do you get in, how do you get out? Then obviously you go through periods when the market spanks you and you're wrong four or five times in a row. And you start questioning whether you need to change something. So you go through that process enough that you begin to figure things out over time. Then, just about the time you think you have it figured out, your adopted approach gets challenged by the markets. But that challenging by the markets is good. Enough challenges force you to say "I don't care, it's just part of the process." The continual challenges brought forth by trading also forces a trader to refine, refine and refine his or her approach. JACK SPARROW: Were there any particular realizations that stood out in the very early years? PETER BRANDT: For me, one of the biggest things was realizing I was not going to be right 80% of the time, or even 50% of the time. I would be right about 35% of the time – but that was over an extended period of time. And this figure became real predictable throughout the 80s. If someone had told me, "This year, you're going to be right 35% of the time," I could have guessed within plus or minus 10 or 15 percent what my return was likely to be. If someone had told me, "This year you're going to be right 40% of the time," I had a pretty good feel of what that meant. That figure of 35% was and still is true over an extended number of trades, where N as the number of trading events was a large figure. Percentages tend to work out over an extended number of Ns. But over a shorter-term number of Ns it can really change. I began realizing that over 10 or 20 or even 30 trading events, the win/loss ratio deviated considerably from the norm – with a win/loss ratio that could go as low as 10 or 15%. At that time I went to the statistics department at Northwestern University, just down the street from our home in Evanston, sat down with a professor and said: "Figure out for me what the odds could be of being wiped out betting different amounts of my capital on every trade. If I'm right 35% of the time over a large number of Ns, what's the chance that I'm going to be wrong, just in terms of random distribution, 8 times in a row, 10 times in a row, 15 times out of 20, and so on." JACK SPARROW: Trying to find the extreme statistical outlier for losses. PETER BRANDT: Right. I knew the answer would resemble a bell curve, but I wanted to know what things looked like to the far right and left of the hump. And the professor created a model based on probablities involved in rolling a single dice. And he said, "A dice role of the numbers one or four are your winners, the other numbers are your losers. Now let's just go through a very long series of dice rolls and see what happens." The professor ran a computer program and produced a distribution table and bell curves that gave me a considerable amount of insight into the random distribution of winners and losers given various win/loss ratios. I began to realize that risking 4 or 5 percent of capital in a program that was right on 35% over an extended number of trades, but with a high probability of being wrong 80% or 90% of the time over shorter numbers of trades, was a recipe for ruin. And that's how I came to the conclusion that I should generally not risk any more than 1 percent of capital because I realized, based on the mathematical probabilities, that it was inevitable if I risked even 3 percent of my capital per trade each time, I could seriously harm my capital base to the point I would then have to change the way I traded the markets. And that's exactly what I didn't want to happen. That starting point on risk led me through the whole process of learning leverage, and how leverage is built. I think back on a lot of the stuff I had to learn and it's often because I took a hit on a trade and realized "I hadn't thought about that," or "That was not a part of the equation I thought was right." And so I was continually forced to go back and rethink an aspect of the trading process all over again. Of the new people who start trading today – so many have no clue of the learning curve. I mean this is a steep mountain. And you've got to be willing to really, really go through a lot of learning – and you learn by mistakes. You learn by getting sliced up by the markets. You don't come in, have a hot three months, and say, "Man, I've got it figured out." You learn when when you realize, "Oh, I've been wrong 8 trades in a row, and now I'm getting another signal, or, I've just lost 20 or 30 cents in a 10 cent trading range," and so on. And I just went through these situations again and again, and these were the challenges of the game for me. JACK SPARROW: So how long was that period between when you first discovered Edwards and Magee and realized, "This is the approach I like," to the Swiss Franc breakout trade that established you as a trader. How long was that interim? PETER BRANDT: Maybe two-and-a-half years. But then even after that, I had a lot to learn. Any approach you take is complicated. So it was 1982, and there was the big move in the currencies that launched me – but then it was just a process of learning more about the markets, myself and my approach, making even more mistakes, feeling better about it, going through drawdowns. You go through a big drawdown, and your first temptation is "I've got to change something." And actually I think the best response is not that something has to be changed, although that may also be the case, but something has to be learned. JACK SPARROW: A teaching opportunity. PETER BRANDT: Right. Trading is an ongoing education. But like all other forms of education, a tuition has to be paid. When you make money, that's great. When you start losing money, that's the tuition you pay to learn. And the market gets to determine the tuition, you don't get to determine it. Let me add something very important about trading and drawdowns. There is very little material printed or online for the beginning trader on the subject of drawdowns. This is very unfortunate, because drawdowns are a harsh reality of trading. As a result, beginning traders have false expectations of the trading environment. Drawdowns are a fact of trading, and how a trader deals with drawdowns will determine the end game. It is like the word "drawdown" is a subject that is off limits and seldom discussed. Given that every trader deals with drawdowns and asset volatility, it is sad these subjects are not discussed with more transparency. JACK SPARROW: Speaking of drawdowns, how many significant ones have you had over the past thirty years? PETER BRANDT: It's funny you should ask. I was just studying my drawdown history the other day. I've had 15 drawdowns that exceeded ten percent – peak to trough to new highs. Many more drawdowns in the 5 to 10 percent range. Some people measure drawdowns peak to trough and that's fine. But what good is peak to trough if you never make a new peak? You've got to measure the whole round trip. MIKE McDERMOTT: You don't know that the whole drawdown is complete until you've got a new high. PETER BRANDT: Exactly. You don't. And that is why you've got to go through the full cycle. And at first you're tempted and you probably do tweak things, even making major changes, and you find out after the fact that the biggest mistake you can make is changing your trading style based on your previous trade or series of trades. Attempting to optimize a trading approach based on a recent series of trades is just idiotic to do. You've got to think not in terms of results of a trade, but principles. Not just did I make a mistake but, for example, "Do I need to be more conscious of trend." If so how do I determine and measure trend. Do I determine it with a moving average or with some other means? A trader is just constantly playing with these things. But then eventually you go through a drawdown and you don't change a thing, trusting that losing streaks come and go. But what I did find early on is that you do have to change the size of the bets you put on the table. That is because I came to the conclusion early on with the help from the Northwestern University statistics department that I'd risk about one percent of my capital on a trade. And in a drawdown you even start playing with that. For me I reduce my risk even further when I start to lose. If I get hit a few times, well, then it's going to be three quarters of a percent, or half a percent, down to maybe a quarter of a percent on a trade. Then you start winning again and you build up the size of the bet. MIKE McDERMOTT: So your position size is based on the amount of risk that you're willing to take. PETER BRANDT: My formula is really easy. I look at a chart – for example corn is a market I'm involved in right now. I'm a breakout trader, and I'll tell you, over time I have had to learn over and over again to resist the temptation: "This thing is going to go up, I need to get in before it breaks out of this pattern." I've lost so much money in trading ranges. So much money trying to jump ahead of a trend. JACK SPARROW: Because you didn't wait for it to fully confirm. PETER BRANDT: Exactly, I didn't wait for the breakout. So that has been a hard lesson for me to learn. Intellectually I realize that the correct approach for me is to just stick an order in for a breakout and have a computer-based alert system so that I can know when I get filled instead of having to watch the prices all the time. So I get in and I have a rule for where I set my stop. I want to set my stop based on the chart, not based on a dollar amount. I want the stop to make technical sense. So I know my entry, I know where my exit is if I am wrong, I can figure out the dollar risk per contract, so only then can I calculate out my leverage. So in corn it may be that I'm risking 12 cents. Or maybe I can get away with risking 4 cents. I don't want to force that number. I want the market to tell me, based on how it breaks out, where my stop is going to be. And that goes into determining my leverage. MIKE McDERMOTT: And by leverage you mean number of contracts— PETER BRANDT: Yes, number of contracts. I refer to this as my "size." And for me, I always think in units and layers, layers per $100,000. One contract is a layer. Two contracts, two layers. Three contracts, three layers. Per $100,000 unit of capital. And depending on how bold I am, how I feel about the market, I might risk up to 1.5% on the trade. There are times where I have risked 3%. But it's rare that I do that. I am amazed when I talk to novices who tell me they risk as much as 10% of their capital on a trade! Well I did that too. Back in the late seventies I did that, and I can tell you it doesn't work! Risking 10% of capital on a trade is a well traveled road to ruin. MIKE McDERMOTT (laughing): You don't usually talk to them three years later. PETER BRANDT: No! They're not around. They don't last very long. JACK SPARROW: As a chartist, how would you describe your ideal trading conditions? PETER BRANDT: For me it's "Who cares what the label is on the chart – what market it is." I've always thought my perfect world would be this: I would be blacked out from ever knowing anything… never watching TV… never having to drive through a cornfield in the summer… never knowing any news… and some assistant would bring in charts in the morning, and the price scales would be modified and the name of the commodity would never be on it. It would just be lines and graphs, and I would have to mark it up and say, "Buy here, sell there," and the person would have to execute in accordance with the leverage rules. And so they do the execution, and I never have to know about it. Additionally, I would only be able to look at the charts for ten minutes each day and would not be able to see what happened until the next ten minute period in preparation for the next trading session. JACK SPARROW: So with your track record of 41.6% over 30 years, do you think you would have done even better if you had shown the discipline to trade that way? PETER BRANDT: I think I would have. I can't believe how much money I think I've left on the table because I get influenced by the name of the commodity traded, the price level itself, the emotional pull of the news of the day or other factors beyond the charts themselves – and still do so to this day. In a sense, my perfect trading environment is the antithesis of the environment the Mercenary Trader attempts to create. I would love trading solitude between me and the charts with no other influence. You guys seek to make sense of a tremendous amount of stimuli. I mean you guys have traded enough to understand what it is like when you read something, you hear something, and all of a sudden light bulbs go off. In your approach to market speculation, it's not a new thing you discover, but somebody shining a flashlight on something from a brand new angle – and all of a sudden it's not a two dimensional item but a three dimensional item, or even a four dimensional item. And then you say to yourselves, "A-ha! I see what this thing is. Now I understand what is driving price change." I love reading MercenaryTrader.com, but not for your unique macro-economic analysis or specific trading maneuvers. Rather, you guys will hit upon some aspect of human factor or risk control, some other seemingly arcane subject, that really sets off the light bulb in my mind. As an example, you recently introduced the concept of "leakage." I had never thought about leakage in that way – that I'm leaking money, and I've always been leaking money, and how do I stop the leakage. Because I can stop it! I can identify it and I can stop it. But I had not thought about that concept the way you introduced it. I had thought about it as just, "This is the process of trading and you take all of these decisions, and all of these maneuvers, and at the end of the year you've got to live with the bad and live with the good." But now you can break it down and say there is such a thing as leakage that exists. You can isolate it, and you can study it, and you can find ways to address it. That for me was just a gigantic revelation, this leakage concept. I loved it. So I'm working on leakage, because I think it could be costing me between 1 and 1.5% of my assets a month. And that's 15% a year! That is a huge amount of money. JACK SPARROW: And then compounded it's even more… PETER BRANDT: Well as a professional trader you don't look at it like that, because you're taking money out of your account to live on. But in a way it does compound, what remains in the account. MIKE McDERMOTT: But if you're managing capital – PETER BRANDT: If you're managing capital, your leakage could be the difference between being an "all-star" and an "also ran." You could be doing 10% a year and not recognized, or 25% a year consistently and become a top tier manager. So leakage really becomes important. MIKE McDERMOTT: So where would you most easily be able to cut the leakage? Or where could most people look at it? To be continued in Part III…  | ||
| Fourteen funny – and not-so-funny – statistics about the "economic recovery" Posted: 22 Mar 2011 01:09 AM PDT From The Economic Collapse: ... Below, you will find 14 funny statistics about this economic recovery and 14 not-so-funny statistics about this economic recovery. Actually, if you find yourself deeply struggling in this economy, you will probably not find any of the statistics funny. In fact, you will probably find most of them infuriating. ... The 28 statistics below show the stark contrast between the "two Americas" that share this nation today. Many liberals will likely try to use these statistics as an example of why we should tax the rich. But handing more money to the government is not going to magically create more jobs for the poor. What the American people desperately need is good jobs, and many liberals don't seem to understand that. Many conservatives will likely try to use these statistics as evidence that "capitalism" is working. But the truth is, what we have in the United States today is not capitalism. Rather, it's more aptly described as "corporatism," because money and power is increasingly becoming concentrated in the hands of gigantic corporations that individuals and small businesses simply cannot compete with. ... In any event, hopefully you will find the following statistics informative or at least entertaining. The wealthy are most definitely enjoying an "economic recovery," while most of the rest of us are still really struggling... Read full article... More Cruxallaneous: Seven places to hide cash in your house Shocking video shows Congresswoman can barely read Stansberry: Detroit's socialist nightmare is America's future | ||
| Pimco: Forget Treasurys... Buy these bonds instead Posted: 22 Mar 2011 01:01 AM PDT From Bloomberg: Pacific Investment Management Co. says investors should buy company debt in Russia, Brazil and other emerging markets where rising wages and relatively low public and private debt will help borrowers weather accelerating inflation. The manager of the world's biggest bond fund is buying debt of "rising stars" linked to nations with expanding wealth because they will more easily be able to pass on higher materials costs, Mark Kiesel, Pimco's global head of corporate bond portfolio management, wrote in a report today on the firm's website. At the same time, he's avoiding companies dependent on growth in Europe, the U.S. and Japan that will struggle amid stagnant wages and debt-laden governments and consumers. "Companies which are tied most directly into the strong economic growth engine in the emerging markets should have the most pricing power and ability to either pass through rising costs or absorb them without a significant margin hit," Kiesel wrote. Those more tied to growth in developed nations, he said, "will likely have less pricing power and be more negatively affected by rising prices for both food and energy." Pimco, based in Newport Beach, California, expects gross domestic product, adjusted for inflation, to grow 5.5 percent to 8.5 percent in the next year in emerging markets such as Brazil, Russia, India, Mexico and China. The firm forecasts growth of 1 percent to 3.5 percent in developed economies, he wrote. Younger Populations The developing countries, with faster-growing and younger populations, are benefiting from improving education, infrastructure and productivity, he said, bolstering the purchasing power of their consumers. The best buys for corporate bond investors will be the debt of companies that are both located in those nations and sell their products into other emerging markets, he said. Those include firms in the energy, pipeline, metals and mining and banking sectors, Kiesel wrote. He didn't name specific companies in the report. For the same reasons, the fund manager said he's less favorable toward bonds of corporate borrowers more tied to developed economies and less likely to offset higher food and energy prices, such as retailers, airlines, automakers and parts suppliers and the food and beverage industry. "Retailers are going to be very exposed because they're going to face higher wages in China and also higher cotton input prices," Kiesel said in a telephone interview. "Food and beverage companies are going to be very exposed to higher commodity costs. Airlines and autos are going to be exposed to higher gas prices and energy prices." "This pipeline of inflation is starting to hit globally," he said. To contact the reporter on this story: Shannon D. Harrington in New York at sharrington6@bloomberg.net. To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net. More on Pimco: Pimco CEO: These investors should prepare for major losses Bond giant Pimco is making a huge bet that deflationists are wrong Pimco's El-Erian: Middle Eastern crisis is a huge warning for the U.S.dollar | ||
| Supreme Court gives Federal Reserve five days to release secret bank loan details Posted: 22 Mar 2011 12:59 AM PDT From Mish's Global Economic Trend Analysis: In a rare victory for common sense, the Supreme Court has rejected appeals by banks and the Fed that disclosure of the emergency loans by the Fed to various banks in 2008 were "trade secrets." The court gave the Fed five days to release the information. Please consider: The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view. "The board will fully comply with the court's decision and is preparing to make the information available," said David Skidmore, a spokesman for the Fed. The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed’s unprecedented $3.5 trillion effort to stem the 2008 financial panic. "I can't recall that the Fed was ever sued and forced to release information... Read full article... More Cruxallaneous: The absolute must-read editorial of the week... of the month Marc Faber answers the most important question in the world Why it's a huge mistake to store all your precious metals at home | ||
| Gold SHOCKER: Secret Iran gold holdings leaked Posted: 22 Mar 2011 12:37 AM PDT From Zero Hedge: While it will not come as a major surprise to most, according to senior BOE individuals and Wikileaks, Iran, as well as Qatar and Jordan, have been actively purchasing gold well over the amount reported to and by the IMF, in an accelerated attempt to diversify their holdings away from the U.S. dollar. "Iran has bought large amounts of gold in the international market, according to a senior Bank of England official, in a sign of how growing political pressure has driven Tehran to reduce its exposure to the U.S. dollar. Andrew Bailey, head of banking at the Bank of England, told an American official that the central bank had observed 'significant moves by Iran to purchase gold,' according to a U.S. diplomatic cable obtained by WikiLeaks and seen by the Financial Times." The reason for Tehran's scramble into gold is "an attempt by Iran to protect its reserves from risk of seizure." The misrepresentation of Iran's holdings could be so vast that Iran could possibly be one of the largest holders of gold in the world. "Market observers believe Tehran has been one of the biggest buyers of bullion over the past decade after... Read full article... More on gold: Rumors swirling: The U.S. gov't is planning to confiscate gold A new gold standard could be coming faster than anyone expects Porter Stansberry: What every American needs to know about gold | ||
| Extorre Drilling at Union Domes and Cerro Puntudo Projects Posted: 22 Mar 2011 12:28 AM PDT Extorre Gold Mines Limited (AMEX:XG; TSX:XG; Frankfurt: E1R, OTC: EXGMF – "Extorre" or the "Company") is pleased to announce that drilling is underway at its Union Domes gold project and its Cerro Puntudo silver project in Santa Cruz Province, Argentina. Union Domes is located 18 km. south of the Company's Cerro Moro discovery, whereas Cerro Puntudo is located 220 km. west of Cerro Moro and immediately south of the Coeur d'Alene Mines/Mirasol Resources' Joaquin silver discovery. | ||
| Official gold data is no good? Posted: 22 Mar 2011 12:03 AM PDT GFMS chief belatedly acknowledges that official gold data is no good by Chris Powell - GATA Published : March 22nd, 2011 Dear Friend of GATA and Gold: From the Financial Times today, appended here, is confirmation from a gold establishment source of what GATA, the organization of supposedly radical loonies, has been saying for a long time: The official data about central bank gold reserves is bogus and often simply disinformation. (See http://www.gata.org/node/9545.) The Financial Times reviewed diplomatic cables obtained by Wikileaks and discovered that quite a few central banks lately have been interested in getting gold quietly. The newspaper quotes a leading respectable, the executive chairman of the precious metals consultancy GFMS, Philip Klapwijk, as acknowledging: "The totality of central bank reserves is not what is reported to the International Monetary Fund. There's probably another 10 per cent on top of that." Klapwijk must hope that the totality is only 10 percent. Why didn't he tell his clients and the world before now that the official gold data wasn't any good? Iran Bought Gold to Cut Dollar Exposure By Jack Farchy Financial Times, London Sunday, March 20, 2011 http://www.ft.com/cms/s/0/cc350008-5...44feab49a.html Iran has bought large amounts of gold in the international market, according to a senior Bank of England official, in a sign of how growing political pressure has driven Tehran to reduce its exposure to the US dollar. Andrew Bailey, head of banking at the Bank of England, told an American official that the central bank had observed "significant moves by Iran to purchase gold," according to a US diplomatic cable obtained by WikiLeaks and seen by the Financial Times. Mr. Bailey said the gold buying "was an attempt by Iran to protect its reserves from risk of seizure." Market observers believe Tehran has been one of the biggest buyers of bullion over the past decade after China, Russia, and India, and is among the 20 largest holders of gold reserves. They estimate that it holds more than 300 tonnes of gold, up from 168.4 tonnes in 1996, the date of the most recent International Monetary Fund data. The cable, dated June 2006, is the first official confirmation of Tehran's buying. Last year central banks became net buyers of bullion after 22 years of large sales, helping drive gold prices to all-time nominal highs. Trades by central banks are often kept secret. Bankers said other Middle Eastern countries had also been quietly adding to gold holdings to diversify away from the dollar amid political tensions and volatility in currency markets. "The totality of central bank reserves is not what is reported to the IMF," said Philip Klapwijk, executive chairman of GFMS, a precious metals consultancy. "There's probably another 10 per cent on top of that." Cables obtained by WikiLeaks cite Jordan's prime minister as saying the central bank was "instructed to increase its holdings" of gold, and a Qatar Investment Authority official as saying the QIA was interested in buying gold and silver. "There is no question some Middle Eastern countries are very interested in buying gold," said George Milling-Stanley, head of government affairs at the mining industry-backed World Gold Council. In the past two months, the political unrest in the Middle East has helped propel gold to a record price of $1,444.40 a troy ounce. The Bank of England declined to comment on the cables but did not dispute their contents. The central banks of Iran and Jordan and the QIA did not respond to requests for comment. http://www.24hgold.com/english/news-...r=Chris+Powell | ||
| Posted: 21 Mar 2011 11:29 PM PDT No one really knows how the end of this financial crisis will play out other than "badly." Many have offered their opinions. They should be respected for their bravery and presumptiousness. Only the passage of time will determine who was correct. Many readers have asked my opinion. As most of you know, I think the [...] | ||
| Panic Selling of U.S. Dollar Could Happen Quickly Posted: 21 Mar 2011 08:47 PM PDT  GoldMoney founder and GATA consultant James Turk told King World News yesterday that the U.S. dollar has been trading so weakly as to suggest that a panic out of it could begin soon. We'll find out pretty quick, I'm sure...and the link is here. | ||
| New York Sun: Von NotHaus is guilty but Bernanke is innocent? Posted: 21 Mar 2011 08:47 PM PDT  The New York Sun today editorializes brilliantly about the ironies in the conviction of Liberty Dollar founder Bernard von NotHaus. Von NotHaus is facing the possibility of years in prison after a federal jury found his issuing of money to have been a crime. Bernanke is walking around free and being treated by the authorities with great deference. Which is which?" The editorial, most likely written by Sun editor Seth Lipsky, is headlined "A 'Unique' Form of Terrorism". It's a must read...and the link is here. I thank reader Barnabe Geis for sharing this story with us. |
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