With every positive invention, scams invented by unscrupulous operators follow. Here is a story about how one scam came across my desk for two different clients in the same week! The first case: A new client was referred to me. The task was to assist in a transaction where a Kuwaiti company was going to purchase 10% of the client’s equity for $5.5 million. The investor had located them through an Angel website (an Angel is a high net worth individual that is interested in investing in startups). Naturally, the client was ecstatic. They had not raised even 10% of that sum yet. I had some healthy skepticism, but my task was to investigate and...
How Did the Stock Market Do Today? Dow Jones: 16,014.38; -12.67; -0.08% S&P 500: 1,852.21; -1.23; -0.07% Nasdaq: 4,268.76; -14.99; -0.35% The Dow Jones Industrial Average today (Tuesday) lost 12 points as oil prices fell again on supply concerns and traders prepared for U.S. Federal Reserve Chairwoman Janet Yellen’s appearance before Congress on Wednesday. The markets received a late-session boost from biotech stocks after the Nasdaq Biotech Index added 0.1%. Shares of Gilead Sciences Inc. (Nasdaq: GILD) added 2.3%, while Allergan Plc. (NYSE: AGN) gained 2.3%. The CBOE Volatility Index (VIX) – Wall Street’s ...
There’s something worse than giving up at the bottom… There’s something worse than watching prices fall as you continue to add on the way down… It’s giving up “three feet from gold,” when if you had just stuck it out a bit longer, things might have turned your way. This tendency is part and parcel of human nature, and its effect is not to be underestimated. Way back in 1938, Napoleon Hill wrote about it in the classic book, Think and Grow Rich. Consider what his research uncovered. Said he: More than five hundred of the most successful men the country has ever known, told the author (Napoleon Hill) th...
In what will undoubtedly shape up as the year of Financial Unicorns, Pinterest is among the most likely IPO candidates. Investors should keep close watch on the company, which has an $11 billion valuation Pinterest’s big advantage in the social media space is its potential for monetizing non-intrusive advertising. The company offers great content and allows users to seamlessly discover and explore new products for future purchases. Observers of social media say that companies who do the best job of engaging audiences with quality content and provide the most enjoyable overall user experience will be the most successful. Some other ...
With the “generals” finally meeting their reality-maker, investors appear to be questioning the DotCom bubble-like highs as momentum collapses. “Exuberance has turned to panic pretty quickly,” notes one asset manager and after a very rapid plunge in recent days, options traders are piling into protection at a pace not seen since Q4 2008. The Nasdaq-S&P implied vol spread is more than double its 5 year average… (ignore the spikes as they represent rolls as opposed to trends) As Bloomberg reports, options traders are betting the pain is far from over in the Nasdaq 100 Index, driving the cost of protection to...
With the S&P 500 down by 9% on the year by February 10th, we’re off to the worst start since the recessionary year of 2008 (at least on the Gregorian calendar); it’s too early to tell for the Lunar New Year. If there was any hint of over-optimism on the part of investors heading into the New Year, that by now is gone. We live in a time growing with extremes wherever you may find them – market moves, the weather, politics. I’m sure the leading Presidential candidates are adding to investors’ anxiety and definitely a play on extremes, even within each parties’ establishment. If the market climbs a wall of worry, then there are b...
What is “the gold standard?” Many readers would consider this a simple question and perhaps even an obsolete one. It is for precisely this reason that a mere definition is inadequate as an answer. A definition conveys no understanding and thus does nothing to eliminate the many misconceptions surrounding this concept. In order to provide sufficient context so that the definition provides meaning to readers, it is necessary to explore several, tangential subjects. As such, this discussion will contain: 1) A brief review of the abolition of our gold standard. 2) An examination (and assessment) of the criticisms of the gold standard, past an...
The story of the post-crisis economic period is simple: The housing boom left the household sector mired in a deep debt hole. This was further exacerbated by the leverage Wall Street added on top of the household sector’s debt. This left the banks and household sector needing a great deal of support. Since 2008 we’ve seen huge amounts of stimulus from the Federal Reserve and global Central Banks, but we’ve had trouble transitioning from the Balance Sheet Recession period of 2008-2012 to a more sustainable growth trajectory. Why has the recovery failed to accelerate? I suspect a few things are going on here: We have relied too heavily ...
The Stock market is at do or die support. With the S&P 500 right at do-or-die support per this chart (absolutely critical, but not particularly strong support), I have done more flattening out after yesterday’s post noting a short cover of GS and a sale of TLT, each very profitable positions. I just don’t think it’s a market to be caught gazing at your successes in, unless you want to get your eyeballs ripped out. So shorts on the Pigs (KBE) and the Emerging Markets (via EEV) were also covered today, leaving two moderate and un-leveraged short positions open. As for the gold sector, I have gotten too many emails from people getting...
Before the US market opened, Japan’s Nikkei had posted a -5.40% plunge for the day. The Nikkei is in a bear market, down 22.9% from its interim high in late June of last year, and it has taken a dive of 8.2% since its central bank announced its negative interest on January 29th. And today its 10-year went negative. Interestingly enough, the popular financial press (aka CNBC) is reporting that the Fed has told US banks to include negative Treasury rates as a scenario in their stress tests. The S&P 500 plunged at the open, rallied into the green and then sold off in a couple of waves to its -1.00% intraday low shortly after the lunch...