Man who made a billion on Black Monday in August says this is just the beginning for volatility

Posted on 19 September 2015 with no comments from readers

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Mark Spitznagel won’t confirm or deny the rumors that he made a billion dollars on Black Monday last month through effective hedging. He talks to Fox Business anchor Maria Bartiromo and says this is just the beginning for volatility to come.

He thus is not concerned about any short term movements in the market.

Every trader will trade in the market with a different set of mind and they will react differently to the same situation.

Understanding the compounding effect in the market is important. compounding is when the money grows and where the gains from the last years  gets reinvested for the next year.

So suppose that you had invested 100 in a particular year at a rate of interest of say 20%. Then at the end of the year you will have 120 in your account. You have two options at the end of the year. You may either reinvest the 120 back or take out the 20 profit that you earned this year.

You decide that you do not want to withdraw the money but instead plan to reinvest it. When you calculate the amount at the end of the 2nd year it has grown to 144. This 144 grows to 173 at the end of the third year and this keeps going on and on. If you had withdrawn the 20 at the end of the first year then you would have earned just 60 profit at the end of the third year.

But because you had decided to not withdraw your money but to stay invested you gained 13 or 21.7% over the 60 that you may have made had you withdrawn your profits. This is the compounding effect.

As per the compounding effect the longer you stay invested the faster you will see your money grow. When you invest in the market based on fundamental analysis you will be advised to stay invested for a longer term. So before you start to invest in the market understand your mindset.

The question that comes to mind is that whether investing actually works. Investing can be compared to growing a plant where if you give the plant the right amount of care then it is sure to grow. All this is published here in great detail.

How do you allocate capital is such an environment? Something like cash in the short run…

‘Mini-perfect storm’ for gold and a positive hurricane brewing for silver

Posted on 18 September 2015 with 1 comment from readers

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Gold futures climbed again on Friday and eyed a solid weekly gain of around three per cent or higher, with analysts giving the credit to the Federal Reserve’s decision to keep interest rates at historically low levels.

‘Gold seems to be holding on to gains, and perhaps this is a mini-perfect storm for gold,’ said William Adams, head of research for Fastmarkets, explaining that ‘prices are low, other asset classes are relative high and interest rates will stay down for longer.’

Silver hurricane?

But then if gold was doing well its volatile sister was outperforming to the upside with prices set for gains of more than five per cent for the week, and a positive hurricane seems to be brewing in the silver camp. Remember 2008-11 when silver jumped from $8 to $48.50 an ounce?

Gold for December delivery was up two per cent to $1,140 an ounce at the time of writing on Friday, while December silver had leapt to $15.40 an ounce.

Analysts led by Goldman Sachs had previously emphasized that higher interest rates would hurt gold because it doesn’t pay interest, meaning some investors would step away from it. Plus, higher rates lift the dollar and a stronger greenback can weigh on dollar-denominated commodities as they become pricier for holders of other currencies.

In the event the Fed was having none of this, and the weary business of trying to anticipate when it will finally raise rates must start again. However, more stormy global economic clouds ahead could now kick rate rises into the very long grass.

Great expectations

To turn Goldman’s somewhat dubious logic – as gold has often risen with interest rates in the past – on its head, then surely gold and silver prices have only one way to go absent interest rate rises.

Hedge funds and other momentum traders are always on the look out for trading positions like this, where you just buy and ride the momentum upwards. Could it be that stocks will now continue to head downwards while precious metals step up into the great blue yonder?

The trend is your friend, until it is not.

QE4 is coming warns ‘Dr. Doom’ Marc Faber so buy gold!

Posted on 09 September 2015 with 7 comments from readers

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The original ‘Dr. Doom’ Marc Faber is warning that the Fed’s raising of interest rates will cause such an almighty crash that it will be forced to revert to money printing with QE4.

He remembers how Fed policy reversed the 2008-9 slump in equities but the biggest gainer in the next two years was precious metals. Could history be about to repeat itself again?

 

What is QE?

Quantitative easing is an unusual financial policy. In this, a central bank can purchase some government as well as few other securities from the market. This is done to boost the money supply as well as to lessen the interest rates. QE has been implemented a few times recently. The global economic crisis of 2007-08, The Federal Reserve, the central bank of U.S has implemented series of quantitative easing. Similarly, other Banks as the European Central or the Bank of Japan has been seen executing QE.

Stock markets react to every small or big change happening globally. Quantitative easing lowers the interest rates affecting the returns on normally safe investments including certificates of deposit, money market accounts and highly rated bonds. These situations leave investors no choice but to take few risks in order to get a return. They tend to take their portfolios to the equities hoping to push the stock market prices.

The gold market is also affected by Quantitative easing depending on the investor’s viewpoint. During the financial disaster of 2008, Quantitative easing had a good impact on gold. But soon after in QE2 in 2011 as the U.S. economy improved, the gold price was dropped. But gold has proved to be the investor’s safe haven from times. Not only because gold is rare or that its value is high, gold has many other properties that make it almost impossible to replace. Same goes for the other precious metals like gold. Gold is in the stock market for long but it has proved it can not only survive alone but can be working well with other emerging revolutions like the cryptocurrencies.

In times like this, it is recommended to do a thorough study of all the investments instead of just considering the effects of quantitative easing. It is recommended to diversify the installments using the emerging systems as Qprofit System. Please read the related articles in dept to know if Qprofit System is not a scam.

 

Video link click here!

Mike Swanson: US stocks lined up for 40-50% crash like 1929,1974,1987, 2001, 2007-9

Posted on 08 September 2015 with 1 comment from readers

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US stock markets will not just stop at their recent correction but now go on to a full blown crash with share indexes off 40 to 50 per cent from peak valuations, according to this latest video from market tipster Mike Swanson with David Skarica.

The predictions for the year were not all bright right from the starting, but were not this worse. The reason behind this last-minute may be the lack of any early or pre-timed initiatives to widen the share market and its factors or to exert any significant steps to save the grace of the Treasury assets. The result became a clearer picture when the forecasts modified into reports of falling Treasury assets more than what could be saved to keep them as safe as they can be. When the benchmarks are rendered insecure, there is no point in mentioning about other assets, the equities and bonds to the least.

The bitcoins may be thriving in popularity and takers and the efficiency of mining software might be adding to the favorable winds, but a single, but firm voice asking Is Bitcoin Trader a scam can rattle the enthusiasm of the miners for quite some time. It may eventually fade off or continue to grow and create havoc in the cryptomarket.

Some of the crashes in the history before either started off in the US and spread to other economies as well and the others started locally and then rattled the balance of the US. The ultimate aim of all the stock owners and shareholders is to perform fairly in the US stock market. Any significant alteration in the financial regulations of the trade and business in other countries will not die out without leaving a relative impression on the share values in the US economy and market. For example, if there is a tariff increase in the goods imported from the US, it triggers off a chain reaction up to the manufacturing structures.

These guys have been spot-on so far this summer with their warning of a July break and further weakness in August. Unlike many commentators they now see a much bigger sell-off coming this autumn. Here they explain why…

Posted on 08 September 2015Categories: Banking & Finance, GCC Stock Markets, Hedge Funds, Investment Gurus, Investment Management, Personal Finance, SMEs, Sovereign Wealth Funds, US Stocks, Video Channel

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Don’t dismiss the EU investigation into alleged gold and silver price fixing

Posted on 03 September 2015 with 6 comments from readers

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Goldbugs are bemused by reports that the European Union competition watchdog is investigating alleged ‘anti-competitive behavior’ by participants in the precious metals market.

But anybody who remembers how the EU broke up the cement cartel a couple of decades ago will know that this is a watchdog that has very powerful teeth. It’s fines can bankrupt even very large companies or banks.

Prior evidence

True the goldbugs have watched and waited in the past when various investigations into alleged precious metal price fixing have been launched in the US, UK and Germany. These investigations have quietly concluded that nothing was wrong, despite some very convincing evidence from market watchers and industry experts.

Market watchers help investors to decide the right time for all the financial transactions. But sometimes even the expert market watchers fail to give the correct analysis. This is where the professional systems like Crypto Code come into the picture. Please feel free to refer to Crypto Code review for further details.

The general view in the gold community is that the central banks themselves manipulate the gold price to help dampen inflation expectations. And the central banks are above the law in such matters.

However, they may have met their match in the EU competition watchdog. According to the Treaty of Rome and its later additions, EU law is the supreme authority, and even central banks are subservient to its law.

The European Union is particularly strong on maintaining a level playing field in terms of business competition and market pricing. There was a time big cement firms thought they were above EU law, until one day investigators turned up first thing in the morning to seize documents and take away computers.

After rather a short period of time the huge fines were made, hundreds of millions of dollars that really hurt profits. The cement cartel collapsed and prices fell, and so did their share prices.

EU calling

Could the bullion banks be the next to get that knock on the door early one morning? The EU investigators could do worse than start by reading back pages of the zerohedge.com website which regularly documents the false trades used to depress gold prices that are so blatant a blind man in a coal cellar could see them.

Why are these trades initiated? Who does it? On who’s orders are they operating? What is the benefit to them of these blatant price manipulations.

These are a few of the awkward questions the EU competition guys might like to put to those few players who count in the precious metals market. Could this be another cement cartel for them to bust? Why not? It is just as obvious.

Marc Faber: buy gold and gold stocks and short the Hong Kong dollar

Posted on 02 September 2015 with no comments from readers

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Always a controversial contrarian investment guru and Gloom, Boom & Doom Report editor Marc Faber now says to short the Hong Kong dollar as the devaluation of the yuan puts its peg to the US dollar under pressure.

The Sage of Chiang Mai is also keen on gold and gold shares as the only safe investment left in the world…

As per the leading debaters, the global economy is in crisis. There are very few safe havens for the investors. The Cyprus bank crisis has left investors thinking that even the bank deposits are not safe. While talking about the unemployment in Europe and its impacts, the precious metals and the economic slowdown of China they also shared their thoughts on investments in such unpredictable times. Their suggestion was to diversify the investments and not to rely on a single entity. Investing in multiple markets as real estate, equities, gold and other precious metals as well as bonds is the best go.

Investors can also look for emerging economies like exchange-traded funds or ETFs. Investing in stocks market has always been risky. But earning quick money comes with risks. With the Cyprus bank crisis, investors cannot even keep the money safe in banks too. In such crucial times, it is very important to diversify the investment and keep studying the market trends. For this, we need systems that can take in the current as well as the historical data and give us the proper analysis of the market trends. There are many such trading robots available in the market as of now. Ethereum Code is one of the leading. Check the latest research to understand is the Ethereum Code legit.

In volatile times markets can look distorted. With the extent of debt of GDP and the low economic standards, it is highly recommended to own gold. Gold has been in the market for ages as the investor’s popular choice. And there is no chance it is going to go away any time soon. Also, gold’s influence on the economy depends on how safe the other investments are turning out to be. When the markets are shaky investors see gold as their safe haven. Price of gold is considered the trademark for determining the health of the economy. Lower the gold price more stable the economy is.

Though nobody can predict how the markets will turn it is always advisable to diversify the investment for a better outcome.

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Why gold was the best buy in 2008-9 crash and will be this time too

Posted on 26 August 2015 with 1 comment from readers

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What was the best asset class to buy for the recovery that followed the 2008-9 crash in global financial markets? Step forward gold whose rise was only exceeded by silver.

Precious metals not only delivered the fastest recovery from that huge sell-off but offered increases way above the pre-crash levels. Gold tripled from its low in the crash, while silver went on to record an eight-fold increase, still just shy of its 1980 all-time high.

Deja-vu all over again

It is not hard to see history repeating itself all over again. Just look at the Chinese central bank this week cutting interest rates, just like the Fed had to do in 2008-9.

Back then that lit a fire under precious metals because of the inflation that was likely to follow. And inflation certainly did follow if you think about house prices and stock market prices but they were slower to deliver returns to investors than gold and silver up until 2011 when precious metal prices peaked.

They have now endured a four-year bear market and are perfectly positioned at much lower levels for a very strong rebound. On the other hand, global financial markets are still overvalued, even after the corrections of the past couple of months.

In that same time we have seen the gold price bottom out, advance $90 an ounce and then come back $40. All financial assets are currently very volatile but gold is still up in price and not down like stocks.

Going up or down?

The only reason that investors are hesitating to pile into precious metals is that they recall the 2008 collapse in their prices during the global financial crisis and hope that this will happen again to provide them with an even better entry point.

Will markets really be that kind to them? The prudent investor says it might be wise to start buying gold now in case it does not go down this time, and if the anti-gold camp on Wall Street has one single valid point it is that gold and stocks do not correlate.

The best option to buy gold is to trade it for other paperless currencies like the crypto currencies. The pair trade between these two has shown great results. As gold can be bought or exchanged for crypto and or the other way round. To trade the Bitcoins we can choose from a variety of options available. Please check Bitcoin Code review for more details.

Those Wall Street commentators dancing on the grave of gold have perhaps got the wrong funeral here: ask not for whom the bell tolls, it tolls for thee…

Gold going to $50,000 in a hyperinflation to beat deflation repeats Jim Sinclair

Posted on 26 August 2015 with 1 comment from readers

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Central bankers are starting to lose control over financial markets from China to main street USA warns veteran gold trader Jim Sinclair who once advised the legendary Hunt Brothers.

‘They got the dickens scared out of them,’ he says in an interview with usawatchdog.com (click here). ‘They actually backed off providing the funds necessary… That’s your warning. The warning is markets can overrun plunge protection teams. Markets can and will overrun the manipulation of metals and currencies.

Dollar going down

‘The market will overrun the false strength in the US dollar. The idea that a lift in interest rates would be beneficial to the dollar is absolutely incorrect. We do know the limits of the Plunge Protection Team, and we do know the omnipotent power of the Fed is a total fallacy.’

Turning to his lifetime specialty, Mr. Sinclair recalls: ‘I didn’t call the top in gold in 1980 because of any kind of a system. I was told, I acted on what I was told.’

What are these voices saying now? ‘Number one, the downside on gold is extraordinarily limited here. Two, the rally we are facing that will come in gold is going to be stupendous. Three, they tell me we may never call you back because this may be the rally you don’t sell.

Investors need to understand the importance and value of any financial asset. The key is to do the right judgment at the right time. But how can anyone predict the right time to buy or sell the assets? In such scenarios, the automated traders like the Bitcoin Trader software will help you achieve your goals without worrying much about the downside of the market.

‘This may be the rally you don’t sell because gold is moving from a currency form to a valuation form… This may be the last time we call you means this is a rally that is not meant to be sold.

‘What is coming up in front of us is the Great Reset where currencies wear their gold like ladies wear a necklace, and the most beautiful necklace will be the strongest currency. The ladies without the necklace won’t be invited to the ball.

$50,000 gold

Mr. Sinclair stands by his prediction last year of an eventual gold price of $50,000 an ounce. He explains: ‘You have to understand we are going into unprecedented deflation, and it’s the reaction of central banks around the world to the concept of deflation that brings about hyperinflation.

‘There will be debt monetization of all kinds of debt to maintain some sort of equilibrium. The price of gold is going to go to a level that is going to surprise everybody. I was told that this is a rally that you won’t sell.

‘That means gold will go to a level and not react violently down from that level… This is when gold is going to levels that today are considered more mental illness than monetary analysis.

‘Silver is best understood as gold on steroids because whatever potential and direction is taken up by gold, silver will be multiplied by two or by five… Silver will outperform gold.’

Gold rallies for a sixth day as equities crash and burn around the world

Posted on 24 August 2015 with no comments from readers

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Gold was the only standout winner on Black Monday with prices initially dipping a little but then rallying for a sixth day in a row to $1,170 an ounce at the time of writing, almost $100 up on the low earlier this month.

Any thought of the Federal Reserve raising interest rates next month, or anytime soon, were surely thrown out of the window with the crashing noises in global stock markets from Shanghai to London and other European Capital and lastly Wall Street.

False prophets

Bears who bought that argument from Goldman Sachs about rising rates being bad for gold just have to concede that therefore if rates are not going up then gold prices probably are going up. Then again when did Goldman ever call the gold price right. It’s got the worse gold forecast record of any major house. Gold’s going up.

And it’s not just because of that ridiculous argument – gold prices have actually gone up on the last for occasions that the Fed raised interest rates – has been trounced. Investors are suddenly fearful again and worried about the competence of central banks and bullion is an insurance policy as well as a safe haven.

Those who thought gold was in a short-term rally driven by short covering – some called it a ‘dead-cat bounce’ – are also looking a bit sick today as prices rock-an-roll again.

Global financial markets are clearly into a profoundly structural change and that could leave the previous dogs of the markets having their day while the former stars crash and burn. Step forward precious metals.

Times have shown the worth of precious metals and also how perfectly they work with other assets of the market like the cryptocurrencies. Investors desiring a better output should diversify their portfolios and also look for alternative investments. Cryptocurrency trading is gaining popularity and ease with revolutions like the Bitcoin Loophole trading software . Investors should without doubt utilize this more often.

Next stop?

Contrarian thinking is back with a vengeance. Where’s it all going to end? With much lower share prices and a much higher price for gold and silver?

Honestly this party has only just gotten started and those gate-cashing at this point still have a lot of fun ahead. You don’t have to stick with equities.

Just push that button and buy some gold and silver to lighten your day!

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