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Category: Trending Topics

You’re Being Robbed of Trillions with Low Interest Rates, and Don’t Even Know It…

By John Del Vecchio

“This article originally appeared in The Rich Investor”

Central bankers are the biggest crooks on the face of the earth. John Gotti and Pablo Escobar are practically saints in comparison. Here’s the thing… Central bankers are keeping interest rates low. In many cases, they’re negative. This trend is expected to last for a generation.

A Lasting Scenario

Take a look at these charts:

You’re Being Robbed of Trillions with Low Interest Rates, and Don’t Even Know It…
You’re Being Robbed of Trillions with Low Interest Rates, and Don’t Even Know It…
You’re Being Robbed of Trillions with Low Interest Rates, and Don’t Even Know It…
You’re Being Robbed of Trillions with Low Interest Rates, and Don’t Even Know It…

Interest rates are expected to be negative in Europe and Japan for 20 more years.

Yup, you read that right. Twenty. More. Years. Those rates may not even bottom out until 2022 or 2023. Add in the time they’ve been artificially low and you’re talking the lifetime of an entire generation. It’s unprecedented in history.  Even worse, Europe and Japan have lousy demographics. It’s a total disaster. So, I’m skeptical that rates will even trend back up. We may even find ourselves bogged down by this scenario forever.  What makes these central bankers’ thieves? Well, they’re robbing trillions of dollars in wealth from the good folks like you who work hard and save. Trillions of dollars robbed, year after year. This has been going on for nearly a decade. The thing is, no one will ever go to jail for this grand heist. The bankers put on their fancy conferences, dine on Dover sole, sip champagne, and make Wall Street’s rich richer while you get caught holding the bag.

So, What Can You Do About It?

As an investor, you’ll have to chase some yield.

Though not all dividend yielding stocks are the same. Some yields are high for a reason — the underlying stock is junk.
That’s why in Hidden Profits I’m looking for stocks with fat yields and are good values with solid cash flows. This month, I’ve recommended one such stock. The company has survived numerous cyclical downturns. Its business is set up to weather economic storms. The yield is fat. Cash flow is strong. And the valuation makes it a good buy. There’s 50% or more upside in the stock at today’s prices. There’s a second recommendation in Hidden Profits, too. It’s a simple special situation play. You don’t need a calculator to figure out the value. It’s another 50% or more upside sitting out there, hidden in plain sight.

The company is well-managed and a dominant player in its three core markets. The guy at the helm is a business legend. He has huge incentives to unlock this obvious value. That makes it a great bet, here and now. That’s a change I’ve made in Hidden Profits. I’ll have two recommendations for you each month to provide more choice and, most important, more value. If you choose to do nothing, your savings will be eaten away. Your pocket picked. No jail time served for the multitrillion-dollar theft of central bankers. That’s the world we live in today.

Adapt or go broke. The choice is yours.

John Del Vecchio
John Del Vecchio is the author of the bestselling book, Rule of 72: Compound Your Money and Uncover Hidden Stock Profits and What’s Behind The Numbers: A Guide To Exposing Financial Chicanery And Avoiding Huge Losses In Your Portfolio.

As the in-house stock market guru and forensic accountant for Dent Research, John stood on the shoulders of the great David Tice, James O’Shaughnessy and Dr. Howard Schilit, and built a framework of algorithms and a multi-factor grading system that has made him one of the more successful short-sellers around.

John is also the executive editor of our Hidden Profits newsletter and our trading service Small Cap All-Stars.

He graduated Summa Cum Laude from Bryant College with a B.S. in Finance and was awarded Beta Gamma Sigma honors. He earned the right to use the Chartered Financial Analyst designation in September 2001.

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Because it’s never too early for a little “bah, humbug!”…

A Consumer and Their Confidence

John Del Vecchio | November 29, 2018

Dear John,

By the looks of it, it’s going to be a great holiday season!
Consumer confidence is through the roof, and retail sales are surging. As a result, I expect to see lots of presents under my tree this Christmas. No coal for me; I’ve been a good boy.
All this consumer excitement should be great for retail stocks, right? Well, not so fast…
Before we dive into my concerns about retail stocks, let’s have a look at where we are.
Here’s a chart of the history of consumer confidence, from the Global Financial Crisis/Great Recession right up to Tuesday…

A Consumer and Their Confidence
A Consumer and Their Confidence

Yes, financial crises do happen! The last one was about 10 years ago. We investors often have short memories. Back then, consumer confidence plummeted right to the lows of the stock market in early 2009.
That’s proved to be the buying opportunity of a lifetime! I mean, how much worse could things get? People were leaving the keys to their houses in the mailboxes out front and ditching their cars on the sides of roads.
Today, confidence has surged. It’s more than quadrupled.
And that confidence is giving a big boost to retail sales…

A Consumer and Their Confidence
A Consumer and Their Confidence

As you can see, retail sales bottomed along with consumer confidence and the stock market. Since then, same-store sales have bounced around a lot.
But, recently, they’ve surged to new highs.
Now, everything is great. Sales are booming. Here’s my question: How much better can it get?
The stock market’s starting to wonder the same thing. While everything is rosy for consumers, consumer stocks are starting to discount all of the enthusiasm.
That’s what my look at the SPDR S&P Retail ETF (NYSE: XRT) revealed to me: lots of red flags.
First, the index is trading below where it was more than three years ago.
Second, it’s trading below key moving averages. It’s in a bear market.
Third, as the index was moving higher, it was doing it on lower volume. Less and less demand was pushing the index higher.
Finally, there’s a massive divergence in the relative strength of retail stocks and the index itself. This means that even though the index had been going up, it was losing momentum compared to the rest of the market.
In other words, super-enthusiastic consumers and strong sales don’t translate into higher stock prices. In fact, the index is suggesting that these stocks have a lot lower to go.
So, about all this news of a great economy and a blockbuster holiday shopping season…
It’s already priced in. And stocks are beginning to reflect the reality that things can’t get much better from here.

Financial Expert Forensic
John

 

 

 

 

 

Originally published in The Rich Investor.

3 simple reasons why one short-seller is feeling bullish about the rest of the year

Published: Nov 1, 2018 9:37 a.m. ET
By Shawn Langlois
Social Media Editor
MarketWatch

3 simple reasons why one short-seller is feeling bullish about the rest of the year

 

 

 

 

 

 

 

One bear is feeling Bullish

Brad Lamensdorf, manager of the AdvisorShares Ranger Equity Bear ETF HDGE, -1.21%  is feeling rather bullish on stocks as we head into 2019.

Come again?

Obviously, this is not the kind of take you’d typically expect from a guy whose job it is to bet against the stock market. After all, Lamensdorf said earlier this year that “the pain is coming and is unavoidable.”

But, after the October carnage, he’s singing a very different tune. Now, three short-term indicators are telling him that investors “could experience profitable upward bounces during the rest of 2018.”
First, companies can once again buy back their shares after emerging from blackout periods, which should lend some downside protection if volatility VIX, -3.58%  continues to roil markets. “Indeed, the fact they couldn’t buy during September and October may have exacerbated the recent sharp market declines,” Lamensdorf said.

3 simple reasons why one short-seller is feeling bullish about the rest of the year

 

 

 

 

 

 

 

Also, Lamensdorf pointed out that the Ned Davis short-term sentiment indicator is at only 20% bullish, the lowest level of the year. “That means there’s a huge amount of bearish sentiment out there,” he explained. “And that’s positive news from a contrarian point of view since historically investors are wrong about market direction.”
3 simple reasons why one short-seller is feeling bullish about the rest of the year

 

 

 

 

 

 

 

 

 

Lastly, Lamensdorf said funds are finished with the tax selling that’s recently weighed on markets. “That adds even more liquidity for upward market momentum this year as these investment companies initiate buying programs to maximize annual returns after flat to downward performance for the first 10 months of the year,” he said.
So far so good with that prediction. The Dow Jones Industrial Average DJIA, +0.46%  rose 241 points on Wednesday and continued to move higher on Thursday. The Nasdaq Composite COMP, +0.29%  also built on its 2% rally from the prior session.

This article was originally published on the MarketWatch blog. https://www.marketwatch.com/story/3-simple-reasons-why-one-bear-is-feeling-bullish-about-the-rest-of-the-year-2018-10-31?fbclid=IwAR2-Lr7DEXelIRpleY6OGZtXmTd9HifNoPBzXaaoO2UGKEZt0JcIhLMxq64

 

Republican U.S. election sweep would boost short sellers -Lamensdorf – Reuters News

22-Oct-2018 02:45:16 PM
By Michael Connor

NEW YORK, Oct 22 (Reuters) – U.S. equity short sellers are rooting for a Republican sweep of Congress in U.S. elections on Nov. 6, which are seen as partly a vote on President Donald Trump’s pro-business policies, a leading Wall Street short seller said on Monday.

Brad Lamensdorf, Short seller, also said in an interview in the Reuters Global Markets Forum online chat room that electric car maker Tesla Inc TSLA.O was too risky for his portfolios betting on stock market losses, while the buoyant U.S. oil sector was ripening as a bet for bears.

Here are chat excerpts:

Question: Each day, it’s more difficult to predict whether or not the GOP (Republican Party) will be forced to share power in Washington. Which scenario is best for shorts?

Answer: Markets act the best when the Senate and Congress (House of Representatives) are split; that way nothing gets done, and the environment stays more consistent. As a short seller I want more volatility. So, I would like it for the Republicans to get both.

Q: Are U.S. stocks vulnerable to a major selloff?

A: The price-to-sales is at an historic high. Sentiment is bullish for the most part. Consumer confidence … shows everyone is very bullish too. It all points to more disappointment for the markets next year.

Q: Do you own any Tesla, the electric-car maker that is a well-known short?

A: Tesla is troubled but it’s too watched; so we stay away. The borrowing (costs) also stays high, so we like more stealth names to short. When shorting a stock, you want people to not have any hope and sell and keep selling. (Tesla CEO Elon) Musk can keep hope alive, and that is bad for a short seller.

Q: What is your read on oil and its heavy debts among frackers?

A: We have not been short oil for 3-4 years but I’m starting to like it now, and I am looking for shorts. Sentiment is quite high but there is a bottleneck in the Permian Basin right now. And in 6-18 months, it’s going to gush! At the same time, NOAA has come out and forecasted a warm winter. A double bang for oil bulls.

((This interview was conducted in the Reuters Global Markets Forum, a chat room based on the Eikon platform.)

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