In an attempt to warn some and help others, in early 2007 I began commenting on marketwatch.com about the upcoming bear market in real estate, stocks, and rapidly deteriorating economic conditions, due to currency starvation. As a result, a few people asked me to start a financial blog dedicated to successful investing/trading. So here it is.
It is my objective, hope and goal, to help others uncover a path to financial freedom. You don't have to toil for someone else. Really, you don't.
I trade and invest for a living, so I call myself a professional trader. I'm not sure if there is a accepted definition of a professional trader. Most self-proclaimed "professionals" are probably employed by a firm to sit at a trading desk and draw a salary or commission. I don't consider anyone who has to work for a living a professional trader or investor, a pro trader/investor is one who is capable of producing their own income.
Financial firms make money by charging fees for service, not by trading successfully. If any of their so-called professionals possessed enough knowledge to make money, well, they wouldn't need to don a suit and drive to work everyday, would they? As is almost always the case, things are quite the opposite of what they seem.
So if you can't hire "a professional" to trade or invest on your behalf, how do you make money trading or investing money?
You must learn to do it yourself. There is no other way.
Saturday, January 3, 2009
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Great blog-have a question. Got my retirement money out of the market in Jan.08 (dow 1250). Put it in US Treasury Mmarket accounts. Given the new deflationary trend, would you advise standing pat.
ReplyDeleteYes. US Treasuries are the place to be as cash continues to greatly increase in buying power and banks remain risky, over-leveraged and under-capitalized.
ReplyDelete100% Treasury Money Markets add an unnecessary layer of risk unless which is definitely not worth taking, unless you are nailed down in IRAs, etc. Use:
treasurydirect.gov
FDRalloveragain: Curious how would you react to this comment in today's CBS marketwatch:
ReplyDeletejust love all these austerity types. What a bunch of bunk ! If you lived in some lousy apartment for the last few years rather than buying a house, CONSIDER THIS ! How much of your money did you give away in TAXES to Uncle Sam and your State? Translation: You were a sucker. Probably handed over $100K in taxes that you could have put in your house.
The key to successful investing is always to borrow LONG at CHEAP CHEAP rates and pay your creditors back in bad money......... The FED has given us a massive gift. Heck my home equity line of credit is now costing me
2.5% !!! My 1st mortgage for 15 yrs is now 5.2%. I am now in the process of
refinancing my commercial properties in which I will save thousands in interest. I will pull out equity so I can buy some more commercial property in San Francisco.......... PRIME locations for a song AND financed for 15 yrs at ULTRA low rates.........
Meanwhile the "SMART guys" are buying 10 yr government paper and taking 2.5% !!! Thank you so much you bunch of losers. You are going to lose your shirts on that stuff. You thought you were buying safety. You just enabled me to buy prime assets on the cheap........
--above is from a poster named glenart10
In response to the quote: "The key to successful investing is always to borrow LONG at CHEAP CHEAP rates and pay your creditors back in bad money......... "
ReplyDeleteRealize that "CHEAP CHEAP" is determined by the market-driven rate, not by some absolute rate based on yesterdays 75 year long inflationary trend.
You can't passively borrow into a truly deflationary environment, not at any interest rate, and expect to win by paying back less valuable notes because cash is growing in buying power. In other words:
INFLATION - short cash (sell or borrow it)
DEFLATION - long cash (buy or lend it)
When I say "sell" cash, I mean convert your currency to assets. So "buy" cash means convert your assets to currency.
That is why the Fed always sets their rates relative to the market-driven 3 Month Treasury yield, plus or minus a delta to produce their desired effect. Absolute price levels do not equate to value levels. When interest rates are low or falling, it is because dollars are harder to find or produce, they are stronger.
Treasuries are sorely misunderstood. When Treasury yields are lowest, it is because cash is most valuable and rich people have to fight over them to protect their capital.
There is usually a reason rich people want to get their capital out of the economy and out of banks, producing that low point in T yields. The author you quoted above might consider the possibility that they might be right.
I'm about to write a post about a current market opportunity that is revealing itself itself via treasury yields. Please have a look for more info...
I've been digging around on your blog this morning.
ReplyDeleteTruly fascinating topics and points.
Keep up the good work!