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Thursday, August 15, 2013

Playing Poker When Your Cards Are Transparent!

I am not much of a conspiracy theorist, but I do recognize the reality of fixed games. The stock market is manipulated bye the Fed, Hedge funds, leveraged ETF's, and all matter of insider information and trading. Take for example, when Carl Ichan makes two tweets around one PM yesterday. First he says he took a billion dollar position in Apple, and then a bit later, that he talked to Tim Cook, the CEO, about increasing the stock buyback and dividend being paid. So apple goes up 20 points in fifteen minutes. Did Tim Cook really tell him anything or promise him anything? I doubt it. Anyway, that was a quick 5 million! So you are playing in a game that is way way over your head! Now, I invest at certain times only with ETF's, and would only ever buy a stock for a short term trade trying to get a ten or twenty percent return. Investing in stocks for the long term is a very dangerous proposition. Currently I have only a pair of stocks and a couple ETF's, but I remain half in cash and around 35% in 5, 10, and 20 year short treasury ETF's. These have done very well in the last few months as interest rates have slowly ground higher in anticipation of all the QE nonsense ending. The returns have ranged from 7 to 14 percent over that time, and I plan to continue to hold them until the ten year interest rate hits 3%. I do believe the markets will tank at that pOint as folks move back to traditional savings accounts, and I will probably start heavily shorting the market thru ETF's.
There are two very interesting articles that you should look at.....they are each very short, but paint a picture of why I remain so damn skeptical of hanging around in this market. One IS FROM THE FED ITSELF and speaks to how little this QE has actually stimulated anything in the real economy (except inflating markets of course), and the other tries to estimate how much QE has inflated asset prices and at what level the S&P would naturally be at if QE was gone (hint....they think QE has inflated the S&P bye 55%!). So, as I said, the market to me remains a total con game, and you need to find ways to hedge the crap out of whatever you invest in. If I could get savings or money market funds at 4%, I would kiss the market goodbye.....
http://finance.yahoo.com/news/surprising-fed-study-preparing-americans-170806272.html
http://www.ispyetf.com/view_article.php?slug=New_York_Fed_Research_Reveals_That_FOMC_Drove_S%26P_&ID=12
GIRD YOUR LOINS MY FRIENDS!

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