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Trading Any Market

Essential Investor Strategy for Profit & Protection

Stock-Markets / Financial Markets 2013 Nov 01, 2013 - 06:46 PM GMT

By: DeepCaster_LLC

Stock-Markets

“Facebook creates less business value than any other digital marketing opportunity ... [so] ... Don’t dedicate a paid ad budget for Facebook…

“We asked 395 executives from the US, the UK, and Canada how satisfied they were with the business value they get from 13 different online marketing sites and tactics. You’d expect a site boasting the largest audience and the biggest collection of data to fare well. But we found that Facebook offered less value than anything else on our list .... The least valuable tactic within Facebook? Those paid ads onto which Facebook has shifted focus.”


“Facebook Doomed? Forrester Says Ads Tell a Sad Story”, Jim Edwards

finance.yahoo.com, 10/29/13

It is no surprise to us that the First Rank Market Research Firm, Forrester Research, has published a Quite Negative Opinion on Facebook.

Several weeks ago, we characterized the current infatuation with Facebook as a “Fad” and laid out reasons it should be a weakening economic (and therefore stock price) performer in the months going forward.

[Indeed, given the seemingly unending revelations about the Hacking Into and Compromising of Supposedly Secure Databases, how many thinking persons are going to want to continue putting their Private, Business and Personal information online and in “the cloud” anyway?!]

But a larger, quite simple but Essential Strategy for Profit and Protection is to be learned from considering, retrospectively, the fate of Blackberry, Dell and Nokia and prospectively, Facebook. Indeed it is an Essential Key to Profiting Going Forward.

For example, the recent 120 Day Performance Chart of One Major Sector illustrates the Essential Key to Profiting and Wealth Protection going forward.

And employing The Profit Opportunity Key has allowed us to recommend very profitable Trades recently. But employing that Key will also be increasingly important to Profiting and Wealth Protection going forward for both Investors and Traders.

Certain Mega-Forces have recently been and will increasingly be the Major Determinant of Major Sectors, and Individual Securities, Performance going Forward, as we have pointed out in our most recent Letter and Alerts. And these Mega-Forces increase the Importance of This Strategic Key.

Understanding how and why these Mega Forces are Now more Important than they have been for the last several decades, explains why The Key is more important than ever.

Consider that, if one reviews the chart of the Mini Dow for the last four months, one can easily see how we recommended profitable Put and Call Positions, alternatively, recently.

The Mega-Forces about which we have been writking pushed the Dow UP, Down, Up, Down, Up over that four month period.

And while the Dow is higher than it was 4 months ago it is not much higher. Not only does this Uptrending sideways Chop illustrate our Maxim – “Buy and Hold rarely Works Anymore”.

But it also illustrates another Key to Profit; indeed perhaps The most important Key to Profit going Forward – Investors and Traders must be just as willing to ‘Go Short’ as to ‘Go Long’. (We wager that Holders of shares of Blackberry, Nokia, and even Apple, now wish they had shorted at the right time.)

And given the Mega-Forces at play going forward, this simple Maxim will be increasingly true for the foreseeable future.

Speaking of Shorting Opportunities  -- opportunities for both Profit and Wealth Protection going forward, Jim Sinclair recently gave us excellent Clues.

“Renowned gold expert Jim Sinclair says financial calamity is just around the corner for America.  Sinclair contends, “We are facing the annihilation of currency.  We are facing the shift of America as the leading and most influential nation of the world to some form of banana republic. . . . If it wasn’t for food stamps, we would be facing long lines of people waiting for free food.”  For gold, everything hinges on the U.S. dollar, and Sinclair says, “I think the dollar gets hammered.  I believe we are headed for hyperinflation.”  One of the many black swans, according to Sinclair, is the possible abandonment of the U.S. dollar by Saudi Arabia.  If Saudi Arabia stopped selling oil only in U.S. dollars, what would that do to the buying power of the buck?  Sinclair says gasoline would be “$10 a gallon very soon, without a doubt.”

“Sinclair predicts retirement funds and bank deposits are going to be taken by the government.  How much of your money could you lose?  Sinclair says, “In Cypress, it was a total of 83%. . . . Cypress is the blueprint, and it’s what we are going to experience here in the United States.”  Jim Sinclair, who has just accepted the position as Chairman of the Advisory Board for the establishment of the Singapore Gold Exchange, says, “The exchange will trade physical gold only and not future gold. . . . You have to make delivery.”  Meaning, there will be no naked short selling or manipulation of this new market.  Sinclair says, “This will emancipate gold from the paper price.”  How high will gold go?  Sinclair predicts, by 2016, “Gold will be $3,200 to $3,500 an ounce.”

“Annihilation of U.S. Dollar Coming-Jim Sinclair”

Greg Hunter’s USAWatchdog.com, 10/30/13

And consider Shadowstats.com re the same Congeries of Issues.

“…Due to ongoing solvency issues within the U.S. banking system, that Federal Reserve is locked into a liquidity trap of flooding the system with liquidity, with no resulting surge in the money supply.  Yet, the Fed’s quantitative easings have damaged the dollar, which in turn has triggered sporadic inflation from the related boosting of oil prices.  The overhang of dollars in the global markets—outside the formal U.S. money supply estimates—is well in excess of $10 trillion.  As those funds are dumped in the global markets, the weakening dollar will trigger dumping of U.S. Treasury securities and general flight from the U.S. currency.  As the Fed moves to stabilize the domestic financial system, the early stages of a currency-driven inflation will be overwhelmed by general flight from the dollar, and a resulting surge the domestic money supply.  Intensifying the crisis, and likely coincident with heavy flight from the dollar, odds also are high of the loss of the dollar’s global-reserve-currency status.

“These circumstances can unfold at anytime, with little or no warning.  Irrespective of short-lived gyrations, the dollar should face net, heavy selling pressure in the months ahead from a variety of factors, including, but certainly not limited to: (1) a lack of Fed reversal on QE3; (2) a lack of economic recovery and renewed downturn; (3) concerns of increased quantitative easing by the Fed; (4) inability/refusal of those controlling the government to address the long-range sovereign-solvency issues of the United States; (5) declining confidence in, and mounting scandals involving the U.S. government.  

“It is the global flight from the dollar—which increasingly should become a domestic flight from the dollar—that should set the early stages of the domestic hyperinflation….”

“Consumer Liquidity, September Retail Sales, PPI,” John Williams,

Shadowstats.com, 10/29/2013

Regarding the $US, it is clear that the Main Question is not “Whether?” but “When?”

And it is not just the $US that is being degraded by QE, et. al., but the Purchasing Power of All Fiat Currencies.

Consider the following study:

According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency that has succeeded in holding its value. Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.

The average life expectancy for a fiat currency is 27 years, with the shortest life span being one month. Founded in 1694, the British pound Sterling is the oldest fiat currency in existence. At a ripe old age of 317 years it must be considered a highly successful fiat currency. However, success is relative. The British pound was defined as 12 ounces of silver, so it’s worth less than 1/200 or 0.5% of its original value. In other words, the most successful long standing currency in existence has lost    99.5% of its value.

Given the undeniable track record of currencies, it is clear that on a long enough timeline the survival rate of all fiat currencies drops to zero.

 

Chris Mack, ResourceInvestor.com

Deepcaster attentively monitors the “When” to short, and vis à vis “what” as appropriate, signals and reports and recommends to Subscribers.

Meanwhile, it behooves Investors and Traders alike to prepare for a weaker $US (and other Fiat Currencies in Purchasing Power Terms), by going short at the right time.

And considering the fate of Fiat Currencies in general provides just one example of why it is Essential to be just as willing to “Go Short” as to “Go Long.”

Best regards,

www.deepcaster.com

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© 2013 Copyright DeepCaster LLC - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

DEEPCASTER LLC Archive

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