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Market Commentary

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Trading Apple and Netflix? Wait For the Panic

Icarus Descending?

In 2004 Benoit Mandelbrot, the inventor of fractal math, wrote an interesting book titled The Misbehavior of Markets. In a nutshell, his theory says that the  standard deterministic model of cause and effect does not apply to financial markets.

 

He notes, “The precise mechanism that links news to price, cause to effect, is mysterious and inconsistent.” Like the weather and other complex dynamic systems, randomness is the rule.

 

We see examples of this in the paradoxical...

Sep 3, 2015
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Fasten Your Seatbelt: The Stock Volatility Isn't Over Yet

A few weeks back I wrote how I felt that this August had a different feeling than usual. Little did I know what was in store. End of summer, Europe on traditional holiday, tend to bring slow markets and long days with them.  Obviously this year was a just a little bit different.

To say the last two weeks have been volatile is a just a bit of an understatement. Some of the moves we saw last week were of historic proportion, market swings in minutes that previously took days. Just when it looke...

Sep 2, 2015
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Time To Jump Back Into The Markets?

Following up on my piece last week Is Another GFC Starting Now?, a quick V shaped recovery eventuated, only to give most of the gains back.

Whether you decide to enter the markets now will depend on the type of investor you actually are.

For me, I am both a traditional ‘Value’ investor as well as a ‘Growth’ investor as I have created two different portfolios.

The difference?

As a value investor, I am always looking for great global franchise businesses selling for below estimated intrinsic va...

Sep 2, 2015
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Is Monsanto Lost In The Weeds?

“Ask Kase” and your question may be chosen as the subject of a future column .

Six big firms dominate the agricultural supply business today, having bought up over 200 smaller companies and their intellectual property over the past 25 years or so. Monsanto, the world’s largest seed supplier, and BASF both reportedly tried to buy rival Syngenta. Though no deals went through, it looks like the industry is in for another round of consolidation. One of Monsanto’s problems is that weeds are becomi...

Sep 2, 2015
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Look Out! The VIX Spells Trouble

The sharp sell-off in the stock indices and the sharp spike in VIX spells trouble ahead.

This sell-off in the SPX accompanied by a spike in the VIX has come after a lengthy period of low VIX readings just like in late 2007.  In that instance, the initial spikes in the VIX above 24 were an early warning to the price damage that was to follow.

Looking at the chart below, I don’t believe the recent decline is just another ‘buy the dip’ opportunity.  I have the view that the market has transition...

Sep 2, 2015
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Featured Stories

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Wealth Building 101: Gold To Soar In Looming Global Crisis

In an August 22, 2015 interview, Egon von Greyerz, founder and Managing Partner of Matterhorn Asset Management AG and GoldSwitzerland predicted “the most incredible bull market” in precious metals in the coming months.

 

With stock markets around the world apparently collapsing and the gold market rallying, von Greyerz said, “The perfect storm has now started. . .and this storm will turn into a hurricane probably in the next two months.”

 

Greyerz expects to see all stock markets down at leas...

Aug 28, 2015
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Gold Will Soar: Driven By Largest Currency War Ever Seen

 

Is The Gold Bull Down For The Count?

The person who lives by hope will die by despair.
Italian Proverb

Over the years we have frequently stated that every that every major bull market will experience at least one back breaking correction. Usually the correction culminates with a 50% pullback from the highs. In the case of Gold, this would equate to a pullback to $960.  The precious metal’s sector had a splendid lope that began in 2003 and ended with spectacular run in 2011.  To think that th...

Aug 27, 2015
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Trade The Open: 4 Charts Show You How

Conventional wisdom tells us to avoid trading in the first few minutes that a market opens. The action is often volatile and seemingly unpredictable. May people wait for the first 15 minutes to pass to let the market “show its hand”.

In this article, we are going to discuss an opportunity that occurs very close to the open; in some cases, giving a trade entry in the first minute.  This opportunity is one that you will be able to see quite clearly for yourself, if you take time over the coming...

Aug 25, 2015
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3 Steps To Improve Your Trading Profits

In this case study, Nathan overcame a common tendency and turned his trading around

Nathan’s trading results fell short of his expectations.  Often, his first trades of the morning ended in losses, and this soured him for the rest of the day.  Nathan knew the problem had to be mental, but wasn’t sure where to start.  

There are many reasons traders lose money.  How we think about those reasons and what we do about it can make all the difference. 

Nathan’s Thinking Problem

Nathan was blaming t...

Aug 25, 2015
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How Do You Know When To Sell?

Berkeley professor Terrance Odean points out that decisions to sell are not made in the same way as decisions to buy. As the market appears to be in a swoon, let’s explore this timely topic a bit further.  

It’s relatively easy to manage winning trades. There is little stress and plenty of self-congratulation. Indeed, studies show that investors and traders quickly take credit for trades that have positive outcomes. Whatever stress one might feel typically comes from the fear of giving back g...

Aug 20, 2015
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