The media does a very poor job of interpreting financial and economic data, and telling the story. In most part, they do a poor job because they have poorly aligned incentives. They need eyeballs to make money.
As such, they continuously try to find ways to create “shock value.” That can affect your psychology as an investor. And that can create a barrier to making money as an investor.
That’s exactly what we’ve seen throughout the crisis that has resulting in the masses losing money early on, and then losing even more money throughout. And mis-information is exactly what we’ve seen this week. After Bernanke spoke on Wednesday, both Bloomberg and MarketWatch immediately ran headlines that said the Fed was ready to taper by end of year. Untrue!
First, the Fed said nothing different in its prepared statement. They stayed the course. But, in Bernanke’s speech, he laid out a scenario where the Fed would reduce its purchases and perhaps even end QE.
But there is a huge caveat that waters down the “shock value” for journalists.
For the Fed to dial down its QE, they would first need to see their VERY optimistic projections about the economy achieved.
To be precise, they think that unemployment will go from 7.6% to 7.2-7.3% by end of the year. IF it does, they may reduce the size of their current QE program. And IF their projections by mid-year 2014 are right, they may end this third round of QE all together. Their projection of unemployment at that stage would be 7%. (We should note that the Fed has been overly optimistic and largely wrong on economic projections throughout the crisis).
Now, it’s important to understand, these are VERY aggressive projections about the economy. For the most part, throughout the duration of QE3 unemployment has gone sideways – in the mid 7 percent area. Now, all of the sudden, they expect dramatic improvement in the coming months.
Does it mean the Fed is going to reduce QE? No! Does it mean they will IF their optimistic economic projections come true. Yes, likely!
Guess what? An aggressively improving economy is highly positive for stocks! It’s not negative! Economic shock is the “risk” that has overhung the stock market for years. QE has served to quell that risk. Guess what else quells that “shock” risk? A dramatically improving economy.
That means, investors will look at the valuation of the stock market, relative to its historical average valuation (usually a P/E multiple) and they will find great value in buying stocks.
But the media likes fear. It gets eyeballs and generates advertising dollars. So they have painted a scenario where reduced QE means a stock market crash. That could not be further from the truth. People that make money in stocks, use these mis-interpretations by the broader market as a gift to BUY, not sell.
And that’s precisely what sophisticated investors are doing.
Now, the real topic the media should be covering: Why is the Fed so optimistic about the economy all of the sudden?
It’s all about Japan. In a research note over the weekend to my clients, I said “IF the Fed does decide to ‘taper’ its current bond buying program earlier than they previously indicated, it’s a flashing message that the Fed thinks the impact of Japan’s (inflation-seeking) policies are going to pack a punch – enough so, that they could be concerned that the positive economic impact in the U.S. could be sharp enough eliminate the need for their QE program all together.”
Again, understand the Bernanke (the Fed) has committed trillions of dollars toward keeping the U.S. economy afloat in recent years, and has a vested interest in keeping stock values high and house prices on an upward trajectory. They would do nothing to jeopardize that.
Remember, the rest of the world continues to be early into a second wave of monetary easing – not tightening. That underpins the very dynamic that the Fed is hoping for – creating an environment where people are willing to take more risk, spend money and invest money.
Unfortunately, many of you can be influenced by the drama on CNBC or from scanning the headlines on the Wall Street Journal. With that, we know that some of your perceptions about the stock market are influenced. So today, I wanted to make sure you understand what the Fed REALLY said. And what the real backdrop is for the economy and the stock market.
Recall that throughout the past nine months, the stock market has risen nearly 20% (and our Billionaire’s Portfolio has risen as much as 30% during the period) all while the media was telling you to panic about one event or another. And sadly, many that hold themselves out to be investing professionals have been educated by watching CNBC and reading the opinions of journalists. We’ve told you along the way not to succumb to the bad information. If you have listened, well done!
With the potential for more global monetary stimulus to come next month, from the BOE and ECB, keep perspective on this (June) consolidation period for stocks. And we are given a gift to now buy against the prior all-time highs of 1576.
Cofounder of The Billionaires Portfolio
I have been blessed in that I have worked for and had clients who were Billionaires. But there is one Billionaire I met during my hedge fund days that I will never forget, because he was one of the best options traders I have ever seen.
He had a 5 Step system for trading options that I use for my all my options trading today. I am going to share this with you today and I call this ” The Billionaires 5 Rules of Options Trading”
1) Never ever buy an Option (a Put or a Call) unless there is a catalyst or event. This means you only buy an option when there is an event that will dramatically move the price of the stock up or down. These events or catalysts can be anything from: Earnings Announcements, Fed Meetings, Economic Releases, an Activist Hedge Fund buying a stock to any type of corporate change, CEO, sale of a business unit, merger or acquisition. The key is to buy the option before this event occurs, you never ever want to buy an option after the catalyst or event. So in summary only buy an option when there is catalyst or event that will dramatically alter the price of the stock.
2) This Catalyst or Event must occur before the option expires. An easy example of this is Earnings, you only want to buy an option that expires more than a week after the earnings date. Again this means when you buy an option make sure you leave yourself enough time so that your option does not expire before the catalyst or event occurs.
3) The Option must be Cheap. This can be hard to measure but I like to keep it simple, I personally don’t like paying more than a $1 for any option. But if its a high priced stock, I will only buy the option it gives me at least 25 times leverage or more on the stock. Meaning divide the price of the stock by the actual option price. For example if the stock of XYZ is $100 do not pay more than $4 for the option on that stock, that’s the easiest way to make sure the option is cheap.
4) Only buy options in stocks that have low volatility. This means you want to buy options on stocks that have moved sideways of flat for months at a time. Look at a chart if there has not been a significant uptrend or downtrend in the last 3 to 4 months, there is a good chance that the volatility in the stock is low and the options are cheap. Also if you have options software, you can compare the stock and its options implied volatility and underlying volatility to its historical implied and underlying volatility. This may sound confusing but its the same premise value investors use, they buy stocks when they are cheap in comparison to what they historically sold for, so you want to buy options when the volatility is low or lower than what it historically has sold for.
5) Only buy options if you can make 200% or more on the option. This is very important, too many people buy options with no exit plan or profit target. You have to set a goal or sell point when you buy an option and to make it worthwhile from a risk reward standpoint. The option should have at least a 200% or more upside. Why 200%? because there is a good chance when you buy an option, you will lose the entire value or premium of the option (or 100% of your investment in the option) therefore to be rewarded for that risk you need to be able to make 200% or more in that option. Simply stated only buy an option when you have at least a 2 to 1 reward to risk scenario.
Now I will give you a real life example of an options trade I just made, where I only followed 2 of the 5 steps and it cost me dearly on my trade.
About two weeks ago I purchased a large quantity of put options on Silver, (The Silver ETF, Symbol SLV), that expired on June 28th. The option was very cheap I paid .$50 cents per option. So I followed steps 3 and 4, in that I purchased a cheap put option ($.50 cents) whose volatility was low, so the options were cheap not only in price but also cheap in terms of Silver’s historical volatility as well.
My big mistake though was not having the proper catalyst, I thought Silver was going to drop in price but I just wasn’t exactly sure why? I thought initially it would drop because the Job Numbers that were released 2 weeks ago would be strong and therefore would cause Silver to sell off. Also I thought Silver had broken a huge downward consolidation pattern and therefore it would drop 10% in the next couple of weeks.
Well the Job Numbers were good, and Silver sold off and I was up 100% on my Silver put options in 2 days, but instead of following the Trading Rules my Billionaire friend taught me, I took my 100% profit and went home.
Because of this I did not follow the 200% or more profit rule and I did not have the right catalyst, which turned about to be the Fed Meeting I therefore missed out on one of the biggest moves in Silver’s history, its 7% decline today.
By not following my Billionaire friend’s 5 Trading Rules for Options, I missed out a huge trade. I would have made 400% on my Silver Puts today instead of the 100% I made two weeks ago. So I learned first hand how much it can cost you by not following each and every one of the 5 rules above.
So my lesson to you is not only are these 5 Rules for Trading Options important, but even more important is that you make sure before you buy an option that you have followed each and every one of the 5 rules I stated above. Meaning do not buy an option unless it meets each and every one of the 5 rules.
To make it easy for yourself print out these rules and then before you trade an option make sure that you can check off each rule before you buy the option. If you do this I promise that not only will you greatly improve the success of your options trading but you will make a lot of money in the process as well.
President of The Billionaires Portfolio
I want everyone who owns a stock or ETF to read this: Bryan Rich as you know is a global macro hedge fund manager and top global macro strategist who publishes a weekly research piece to his institutional clients (his clients include some of the top hedge funds and wealthiest families in the world). Bryan is also very astute at analyzing and predicting what the FED is doing.
I have summarized below some of the key points from his research piece as well as the link to his actual research note.
“In recent weeks, people have become panic-stricken about the possibility that the Fed could reduce the size of its current QE program or “taper” it.
This topic has become a dominant focus and created much fear and uncertainty for average traders and investors. But, again, as we’ve seen over and over throughout this crisis period, people are focused on the wrong thing — they can’t see the forest for the trees.
Sure the Fed’s third round of QE, kicked off in September of last year, has been a big deal. It signaled/confirmed that even after two rounds of QE, trillions of dollars worth of backstops, bailouts and global stimuli, the global economy was at risk of another deep downturn. Unemployment was persistently high. Deflation was returning as a reasonable threat.
As such, the Fed’s third act was the warning signal for the rest of the world. And as such, we’ve seen another round of global monetary easing as the response to economic data that had been revisiting the levels we saw in 2009, when the global economic crisis was at peak intensity.
Now, after nine months and nearly $800 billion pumped into the financial system, U.S. employment is better. But it’s still too high and stagnating. And inflation is running at the lowest on record.
With that, what can the Fed do?
Answer: They can keep the QE spigot wide-open. And keep hoping higher stock prices can be the antidote.
Okay, so QE hasn’t directly produced inflation and solved the world’s problems as the Fed might have expected when they launched it in late 2008, but it has produced a direct benefit and an indirect benefit. The direct benefit: The Fed has been successful at driving mortgage rates lower, which has ultimately translated to rising house prices (along with a slew of other government subsidized programs). That has been good for the economy.
The indirect benefit: As Bernanke has said explicitly, “QE tends to make stocks go up.” Stocks have gone up. That has been good for the economy.
But we need a lot more.
As I reiterated in my last Big Picture piece, “the Fed has told us explicitly that it wants employment dramatically better, and inflation higher. They have gotten neither. Their best hope to achieve those two targets is through higher stocks and higher housing prices. While their monetary policy has hit the wall, unable to produce growth, higher stocks and higher housing prices are their only chance. Strength in these key assets has a way of improving confidence and improving paper wealth. Increasing wealth makes people more comfortable to spend. Better spending leads to hiring. A better job market can lead to inflationary pressures. That’s the game plan for the Fed. But they are in the early stages. “
The other HUGE source of assistance to the Fed is Japan.
It’s Japan, not the Fed, where everyone’s attention should lie. Japan can be the answer to the global economic crisis. The Fed is now a mere sideshow.” Read more …
President of The Billionaires Portfolio
Once a week now on this blog I will be trying to educate and teach my readers about trading. Why? First, I love educating and teaching. And I know there are so many secrets and tips I can share from my trading and hedge fund days that can really help the everyday investor.
Secondly, I was a teaching assistant in graduate school, and loved every minute of it teaching undergraduate economics. Speaking of grad school, I used this secret options strategy to pay for most, if not all, of my tuition using just a $4,500 trading account.
Since I was a poor grad student I only had a small trading account, so I had to figure out a way to build a diversified portfolio with just a little bit of capital. And that’s when I figured out my secret options strategy.
This secret options strategy is very simple. It focuses exclusively on buying cheap options, or what I call penny options.
Penny Options are one of the real secrets of investing. Penny options are options on liquid ETFs and stocks with a premium less than a $1.
By using penny options, you can build a diversified portfolio, even with a trading account as small as a few thousand dollars.
And now, not only can small investors trade penny options, but investors now have access to mini options. Mini Options are 1/10 the size of regular options. A mini option controls 10 shares, instead of 100 shares like a regular option. Mini Options are offered on widely owned stocks like Amazon, Google and Apple. Again, a Mini Option costs one tenth of a regular option. So if a regular option costs $950 dollars, a mini option only costs $95 dollars.
So that brings me to Amazon …
Amazon has a super cheap mini option that is also a penny option. It is the Amazon (AMZN) July $290 Mini Option Call. And boy is it cheap. For just 90 cents, I can control 10 shares of Amazon stock until mid July.
Now, Amazon has just broken out of huge sideways channel or flag formation, which projects a price target for Amazon of $320. So if Amazon hits $320 by mid July, those dirt cheap penny-mini options would give you more than a 200% gain.
Even though I have a much much bigger trading account today than I did in grad school, I still almost exclusively trade penny options (options under a $1). You get incredible leverage and you only need to put a little amount of capital down to make a lot of money. That’s what I call a great return on investment.
President of The Billionaires Portfolio
Hedge funds and institutions drive the markets. And they are pulling money out of Emerging Markets at a rapid pace. This is one area of the market you do not want to own.
Just look at this chart below, a perfect head and shoulders top has been completed, projecting a 10% or more decline in Emerging Markets and the Emerging Markets ETF (EEM).
President of The Billionaires Portfolio
Let me share with you an incredible secret. The world’s greatest investor is not Warren Buffett.
Yes, Buffett is one of the richest men in the world. But there is a man who will overtake Buffett as the richest investor. His name is David Tepper.
David Tepper has the best track record of any investor in the world. Over the last 20 years he has averaged a 40% annual return.
Let me repeat that again, because it’s a staggering number. That’s right, David Tepper has averaged 40% a year over the last 20 years.
Let me put this in perspective for you. If you would have invested $10,000 with David Tepper in 1993 you would now have an incredible $8.3 million. Now, that highlights the two keys to building wealth as an investor. You need big returns. But also, consistent returns. And you need to compound those returns overtime.
That is why David Tepper is the world’s greatest investor. He has done it for a long time. And continues to do it. In what has been considered a tough market.
That is why David Tepper is worth over $7 Billion dollars at only 55 years old.
Now, here is where it should be particularly interesting to you.
David Tepper is just like you!
David Tepper is the true American Dream. He is the stereotypical average American male. He is a little overweight. He is balding. He is average height. And believe it or not, he is not some hot shot Ivy League grad or rocket scientist with a PHD from MIT.
David Tepper is just a graduate of a state school, the University of Pittsburgh. I say this not to disparage his education. I say this because it doesn’t really matter if you went to Harvard or Yale or Pittsburgh. I have a pretty fancy degree. But I can tell you this: It learned nothing about becoming a good investor. I’m a good investor because I have common sense. And because I know how the system works. The masses will always lose money or, at best, underperform. And that creates an opportunity for me and those like me.
I say all of this to emphasize that you can be, and should, be returning 40% a year like David Tepper.
I have told you numerous times on this blog that if you are not fully invested in stocks and if you not returning 30% to 50% a year then you are failing at investing. If you were in school you would get an F.
But look it’s not your fault. You have been suckered and sold by Wall Street. You’re invested in mutual funds that will never ever make you anything more than 6% to 7% returns on average.
You probably have your money with a stock broker, who is ripping you off by charging you large commissions, spreads, sales fees, plus another 2% to 3% management fees while giving you 5% annual returns – while putting your money at risk of being halved.
So I don’t blame you. But I will blame you if you do not change your investing strategy. If David Tepper, the stereotypical average American male can return 40% a year simply buying stocks, then so should you.
But you need a gameplan to do this. And I can help you. My blog and my premium research service The Billionaires Portfolio is built on the same philosophy that David Tepper uses. I like buying cheap undervalued stocks with catalysts and holding them to make triple digit returns. My goal is just like Mr.Tepper’s: To make all of us multi-millionaires by compounding our money at 30% to 50% returns annually.
So fire your broker. Sell your mutual funds. And learn from the world’s greatest investors how to compound your money at 30% to 50% a year.
President of The Billionaires Portfolio
Last night, I was talking to my friend and business partner, Bryan Rich of Logic Fund Management, about a new hedge fund he is starting. He laid out his elaborate investment thesis on what he says is the biggest economic catalyst we’ve seen in this crisis era. “It’s going to make people very rich,” he says.
While his fund will use sophisticated instruments, he mentioned to me that he had just told everyone he knows to position in a simple ETF for what he calls the “trade of the decade.” That includes his Dad, former colleagues (many of whom are traders at hedge funds and work at some of the biggest bank trading desks) and some of his super high-net worth clients.
Bryan said this trade will, by far, have the most important influence on the global economy and the global financial markets of anything we’ve seen yet in this crisis era. And he thinks, looking back in ten years, it will be a trade that makes billionaires and defines the careers of the best hedge funds and traders in the world.
So for his friends and family, he said he is telling them to buy this ETF to take advantage. Based on his research, he thinks we will see it up 1,000% in the next 5 years – and 100% by the end of the year.
He also told me that this ETF, which has had a strong move this year, has recently pulled back to a crucial support level, and that he could not believe what a gift this market was giving us.
Well I thought about what he was telling me about this ETF, the massive fundamentals behind it, and how it had perfectly retraced back to its trend line last night. I also looked at the chart and couldn’t believe not only how fast moving this ETF was, but also how oversold it was over the past two weeks.
So of course, I wanted to share this with you. Full disclosure: I’ve taken his advice for this big theme-driven trade and I’m long already.
As many of you know, my partner Bryan Rich was a trader one of the best global macro hedge funds in the world. He’s also one of the best global investment strategists in the world. And his big investment thesis, the one that is behind this trade I’ve described, is the impetus for a new event-driven macro hedge fund he’s developing.
Just look at previous blog posts to see some of Bryan’s calls. He was the guy that told you to sell gold at $1522, then again at $1460 and then again $1440 — making many of our readers thousands of dollars as they purchased put option and leveraged inverse ETFs on gold.
You likely know that Bryan and I run a service for average, everyday investors called The Billionaires Portfolio. For subscribers of The Billionaires Portfolio we have a very simple process: I only hand select stocks that have the potential to produce multiples of what we pay for them, and only when a powerful, billionaire investor owns the stock too — and is imposing his will on the company. Owning a portfolio of these types of stocks with limited downside and unlimited upside is the only way professional investors get rich. And that’s what we do. And we can do it for you.
So here is the deal, subscribe today to The Billionaires Portfolio by clicking here
and I will tell you exactly what investment Bryan has told his friends and family to buy for what he calls the trade of the decade.
President of the Billionaires Portfolio
Last week Facebook formed one of the most predictive and profitable price patterns I have ever seen as a trader.
It is what we call in the hedge fund business a positive asymmetrical trade. Meaning the trade offers little downside coupled with a huge upside for big profits.
Even better this trading setup on Facebook is allowing me to use a trick from my old hedge fund trading days that I have talked about before on this blog, my secret stock replacement strategy.
These types of trades only come along every couple of months, so you don’t want to miss this, as this trade could easily turn as little as $150 into more than $500 in less than 20 days or turn $1500 into more than $5000 in less than 20 days as well.
So here is what I am going to do, and I have never done this before, I am going give you the exact trading instructions on how to use my secret stock replacement strategy to trade Facebook, this includes sending you all the notes on my Facebook stock chart, which has the exact level where to put your stop, and the exact level where you want to take profits. Moreover it shows you visually what I am talking about, in terms of this being the best risk reward trading set up I have ever seen.
To get my exact trading instructions and my chart, you must subscribe today at https://www.fxtraderprofessional.com/order/billionaireport/
Folks you can not wait on this one, as this trade is going to happen on Monday… Remember not only will you get my trade and chart on Facebook but you will also get a subscription to my nationally recognized (featured in Forbes, CNN and the Chicago Tribune) stock and options picking service The Billionaires Portfolio.
As you know The Billionaires Portfolio is my premium service, where I hand select the best stock and option plays. The Billionaires Portfolio is up 28% in less than 9 months, with one stock on our books that has gone up over 200%. To put this in perspective The Billionaires Portfolio is beating more than 8000 hedge funds and 18,000 mutual funds in its performance. It is probably the top performing investment service on the planet, not only in terms of performance but also from a risk reward perspective.
Folks remember The Billionaires Portfolio is up 28% in less than 9 months, while holding a huge cash position, Our portfolio was only 100% fully invested until last month. That means we were crushing the stock market even though we were holding a huge percentage of our portfolio in cash.
Editor of The Billionaires Portfolio
Folks, you are so lucky that I am such a giving person, connected and industrious person. Today, I’m going to tell you about one of the best hedge funds in the world – and a stock they have just bought that can make you over 1,000%.
This hedge fund is so good, that they have returned 40% a year over the past 12-years. That’s 40% annualized in the worst stock market period in history!
This fund has grown from $10 million to over $500 million just from compounding returns on their original $10 millions in assets. I’ll do the math for you: $10 million dollars compounded at 40% over 12 years equals $566 million.
Folks, I tell you time and time again, this is how you get rich. Why don’t you listen?
You put up consistent numbers and let the power of compounding work for you. Is that such a hard concept for you?
If you would have invested your $100,000 IRA or 401K with this hedge fund, back in 2002, you would have been retired by now. That $100,000 would be worth over $5.6 million today.
This fund is so good they already have one stock on the books for 2013 that is up over 1,100%. And another one is up over 500%.
Please stop watching CNBC. Stop reading the Wall Street Journal. That’s a recipe for staying poor. Listen to me. I’m trying to help you here.
To get rich, you have to bet on sure things. And you have to invest with people who are the best in the world. The guy who runs this hedge fund I’m telling you about is the best! Not only is he a smart businessman, but he scored a perfect score on his math SAT, and graduated from Harvard. Why does it matter? It does! The numbers prove it. Where did your broker go to school? What was his SAT score? My guess is that it’s lousy. That’s why he is in sales.
I will spare you the rest. But the bottom line: I am here to help you. For $297 a quarter, my subscribers have gotten, in return, over $5k in profits for every $20k they are managing, by following my picks. Again, for those of you that spend your time trying to time the market or find great trade opportunity, I’ll make it very clear for you … $297 for $5k is a good trade.
I have had two subscribers recently write to tell me that my free picks here on this blog – my service to society – has paid for the cost of the service in less than 72 hours. And another subscriber told me he is taking his entire family to Hawaii this summer because I made him over $8000 in profits. So there you go.
So you know the drill. If you sign up to The Billionaires Portfolio today, I will send you the details on a hot biotech stock that the genius hedge fund manager I’ve described above, has just bought. Like his other big winners, this stock has all of the trappings of another 1,000% winner for him.
So you will get my market crushing stock picking service, that’s up 27% in less than nine months. I’ve told you many times on this blog that you should be putting up 30-50% a year in the stock market. If you’re not, you’re missing out on the huge wealth-effect of compounding returns.
Listen, don’t email about the cost of the service, or if your waffling about whether or not you think it’s worth it. If that’s the case, you are not smart enough to be one of my subscribers.
If you are smart enough to let me help you, you can sign up here: https://www.fxtraderprofessional.com/order/billionaireport/
President of The Billionaires Portfolio
That’s right! I am going to tell you how to make 500% on a tech stock by August. Moreover, this trade can make money regardless of whether the market goes down or up in the next three months.
But first, I want to vent a little. Folks, there is not another blogger, newsletter, journalist, investment guru, mutual fund or money manager who has made you as much money as I have in the past four months.
Let’s review …
I made you almost 600% in Sprint (S) Call Options. I picked two stocks on this blog that were up over 100% in less than 3 months: Eagle Bulk Shipping (EGLE) and Trina Solar (TSL).
My partner called the declines in gold, not once, not twice, but three different times. So if you were trading options on these blog posts, you would have made over 1000%. If you were trading ETFs you would have made over 100%.
Then, two weeks ago I called the bottom in Apple (AAPL). Apple has done nothing but go straight up since then, even in a choppy market.
And for my encore, I just called the exact top in Facebook (FB). And I gave you an options play that is now up more than 100% in less than three days.
Let me repeat this: I gave you an options play on FB that is up more than 100% in three days. Still, I get emails from people wringing their hands about stuff they read online. Enough! Stop emailing me if you aren’t smart enough to take advantage of what I’m giving you. Keep following the lead of journalists.
So, let’s put this into perspective. If you are trading a $2,000 account, a $20,000 account or $200,000 account, and you are smart enough to read my blog, I personally have made you thousands, if not tens of thousands of dollars. Regardless of how small you might be, I have still likely made you thousands of dollars!
Listen, if I have been giving you this much for FREE, just image what my subscribers are getting in my Billionaire’s Portfolio service.
Well, I don’t want to leave anything to your imagination. I will tell you.
I have subscribers that have made $30,000, even $100,000, in my paid service. That’s a pretty nice trade, right? They pay me $297 a quarter, and I help them actually make money – a lot of it. For those that have modest investment accounts of $5,000. I’ve made them over $1,000.
So that’s the story. I can lead the horse to water, but I can’t make him drink.
For some of you, I have to resort to using the carrot. Here’s my carrot:
Subscribe to my Billionaire’s Portfolio service. You can do so by clicking here. When you do, I’ll send you my juicy new trade that I’m betting will return 500% or more by August. Not only do I have a record of capitalizing on trades like this, but I’ve shown you time and time again in this blog. How is that for credibility?
President, The Billionaires Portfolio
Remember me? I am the most famous stock picker and trader in the world right now. I am the person who told you to sell Apple, until last week, when I called the bottom in Apple.
My call was so famous that CNN and Fortune Magazine wrote an article on me. Apple is up 2% since then, while the market is down 1%. If you don’t believe me just Google, “An Apple bear calls a bottom.”
With that being said, and riding high on my fame, I am going to tell you how about some of the cheapest options I have ever seen this year on one of the most volatile and talked about stock in the world, Facebook.
Yes, Facebook (FB). Facebook has moved in a sideways consolidation, and has also formed a dreaded head and shoulders pattern. It’s one of the most technically bearish patterns in the world.
Bottom line: Facebook has failed to rally over the last six months, even as the S&P 500 is up more than 16% in the same period of time. That tells me Facebook is ready to fall. Confirming this, is all of the information I have heard from some of my hedge fund contacts. So I am calling the top In Facebook, today.
Facebook will drop 20% or more in the next month. That is why I am telling you today, not only that Facebook has topped, but you also have the chance to purchase dirt cheap put options on this stock, for less than a $.95 cents (if you want to know the exact option email me at firstname.lastname@example.org).
If Facebook drops by more than 20%, or $4, you will make over 300% in less than a month. Try getting that advice from your moron stock broker who is probably playing golf today, or from the loser English major journalist at Motley Fool (or the like) who has never worked or traded at a hedge fund like me.
You only get this type of advice at The Billionaire Portfolio, to subscribe today click here https://www.fxtraderprofessional.com/order/billionaireport/
President of the Billionaires Portfolio
Last week I called the bottom in Apple, one that will hold for at least the next year and make you 50% to 100% in profits. And here, on this blog, my partner called the crash in gold, and then told you the bounce was a gift of a life-time (a second chance) to get out!
Let me repeat this: Bryan Rich, a former trader at a billion dollar global macro hedge fund and global macro economist, told you on my blog in April that gold was going to collapse if it broke $1522. It did. And it created ripples across global markets.
If you would have followed Bryan’s initial recommendation, you would have made over 1000% in options and almost 100% shorting leveraged ETFs, or 30% just shorting the gold ETF ($GLD).
What did Bryan do for an encore? He told you on the last two pullbacks that you should sell gold every single time. And of course he was dead right.
If you don’t believe me read his weekly Big Picture piece here.
Bryan’s Big Picture piece is read by some of the top hedge funds and family offices around the world. So it is a must read!
Not only has Bryan told you to sell gold, but he was extremely bullish on the US stock market and Japanese stocks before anyone else in the world. He was telling my subscribers to be long 100% stocks back in December. The Wall Street hacks were telling you that the fiscal cliff was going to pulverize stocks. They told you the sequester was going to trigger a crash. They told you Cyprus was going to cause a collapse…then the Boston bombings. Bryan said, don’t listen to this ignorance. Just buy stocks. “We’ve just entered another wave of coordinated, global central bank easing — the central banks have given us a green light.”
Now, over six months later, the rest of the world is starting to get it. And my subscribers are richer. Meanwhile, you are probably still wringing your hands listening to the losers.
Fine, don’t listen to me, or Bryan Rich or Warren Buffett for that matter. Keep watching the hacks on TV. Keep listening to your unqualified broker. Keep following the guidance of the 25-year old journalists at the Wall Street Journal. As I’ve said before, when the sheep are steadily walking off the cliff, it just makes it easier for me to make money, taking the other side of their trades.
If you do want to wake up and listen, start by reading what Bryan has said on gold and stocks over the past six months. You can find it here. And maybe, if you’re nice, I might bring him back on the blog. By the way, he says gold is going to $800 – pre QE levels.
You can always subscribe to The Billionaires Portfolio (here) and get his economic and Big Picture advice on a weekly basis.
By the way: I’m frequently asked “why I do this blog?” Guess what? I wrote a blog post on it. You can find it here.
Anyone who has read my blog knows that I have been a huge bear on Apple because I knew that many of the biggest mutual funds and hedge funds were dumping this stock over the last 3 months.
Yet I never mentioned the fundamentals of Apple, which everyone already know about how they have the best balance sheet in the world, a great dividend that’s higher than the 10 year treasury and growing, and now a perfect technical trading setup on the chart.
See I am an opportunist, I might have hated Apple over the last 3 months, but that does not mean I am not always looking at the stock every week to see if there are any signs of a bullish reversal.
Well we finally have one Apple is starting to form an incredibly bullish pattern its called an Inverse Head and Shoulders Pattern. Almost everyone knows what a Head and Shoulders Pattern is, it is probably the most common technical analysis pattern in trading. An Inverse Head and Shoulders pattern is an extremely bullish reversal pattern, it occurs when a stock forms a bottom buy printing a series of 3 lows. Whats important about this pattern is volume, volume must be heavy on the lowest low, because that signals a wash out- an exhaustion selling, where are the sellers have sold their position and this is exactly what has occurred in Apple.
Just look at the Chart below,
Now the second reason I think Apple is bottomed is that there is a catalyst which propel this stock back up to the $545 area, which would be a 25% move from Apple’s current share price of $433.
Here is the catalyst, Tim Cook the CEO of Apple, for the first time has come out and lobbied for Apple verbally in the public domain. This is a sign of leadership major hedge funds have been waiting for. Mr. Cook is going to congress and try and work with the US Government on repatriating the billions of dollars that Apple has overseas back into the US at a lower tax rate. I think the US Government will work with Apple and Mr. Cook on this. Why? well as Mr. Cook has said Apple is a huge taxpayer already and a huge employer of US Citizens, so they have a lot of power to negotiate and therefore I believe Apple and the US government will cut a deal on this offshore money.
Why is this bullish for the stock? Well besides the obvious cash issue, market players (hedge funds, mutual funds) hate uncertainty. As I told you these funds like to bet on sure things, and the reason they have not been buying Apple recently is the uncertainty over Apple’s offshore cash hoard. Now that this issue is coming to the forefront with Tim Cook going to congress to discuss this, the cloud of uncertainty will start to disappear. When you combine that catalyst with the bullish Inverse Head and Shoulders Chart Pattern, it means Apple has bottomed. Let me repeat that I am calling the bottom in Apple today 5/18/2013.
Just remember who told you this, remember three months from now how I was the only one who was telling you to sell Apple over the last 3 months, and now I am the only one calling the bottom in Apple.
To order :https://www.fxtraderprofessional.com/order/billionaireport/
Folks the joke on Wall Street and at all the hedge fund trading desks is YOU!
Listen, as I have told you before, I don’t throw darts or guess to invest. I only bet on sure things.
I do this through my elite information network of contacts at some of the world’s top billionaire hedge funds. I listen when these guys talk because they move the market and they know who is selling and buying in bulk.
Well, there has been a huge mystery seller in Gold that no-one outside of the hedge fund world knows about, and this entity is the reason that gold has plummeted and will continue to plummet. Your stock broker or mutual fund manager doesn’t know this, or they don’t want to tell you, because they want to get your commissions and fees. But the real deal is that global central banks around the world are the real secret seller of gold. Central banks around the world who have accumulated gold in droves during the past 10 years are now dumping gold like crazy.
Why? Central bankers know the real money right now is in US Stocks. Stocks are where these central bankers are parking their money, not only do stocks have the potential to return 20% a year but many of these US stocks pay a juicy dividend of 3% to 4% much higher than US treasuries. So if your a central banker and would you want to earn something on your cash (which they all do), then you buy stocks with dividends. Remember gold has no dividend, never has never will. You get nothing for holding gold!
Think about it this way, many of the best brand name stocks with AA credit ratings have yields higher than US treasuries and they offer the potential for capital appreciation as well. What does Gold offer? Nothing. No dividend. Gold does not have earnings. No cash flow. Gold is just a fear trade.
So while you are sitting there holding your gold or GLD etf, wondering why you are losing money, I am telling you why, right here! Central banks around the world are pressing the sell button on gold every chance they get. This is why my partner and I have told you gold is going to $800, and also why you should sell all of your gold and put it into stocks.
Oh and by the way, in my top performing premium stock picking service The Billionaires Portfolio, I am recommending to my clients today one of the most lucrative and hottest option plays of the year.
Please do not miss this. If you subscribe to The Billionaires Portfolio not only will you get my premium stock service which is up more than 20% in less than 9 months, with 3 stocks that have 100% or more in gains, but you will also get my newest option play, which I think has the potential to make 600% to 800% in just a couple of months turning a $400 investment into $3000.
Also on March 7th I told all the readers on my blog to buy Eagle Bulk Shipping (EGLE) as a leveraged play on the shipping sector. Well, since then, Eagle Bulk is up 150% in less than 3 months time. And yesterday alone it went up almost 60%. That’s how good I am.
So if you want to make to 800% in options or you want stocks that double in two or three months then sign up here at https://www.fxtraderprofessional.com/order/billionaireport/
I have been telling you for the last three months that mutual funds and hedge fund were dumping Apple. If you don’t believe me look through all past my blog posts and you will see that almost every single week I was trying to save you money by telling you to sell Apple.
I told you that hedge funds mutual funds wanted nothing to do with this rotting stock. Folks this isn’t rocket science you know my background, I have over 15 years of experience in the hedge fund industry working as a Portfolio Manager, Trader and analyst.
I have hundreds of contacts and friends at some of the biggest hedge funds in the world, I have a network of over 2000 people in the hedge fund industry. I live and breathe this stuff. So when I tell you that hedge funds and mutual funds are selling Apple next time listen.
And of course I was right, we just learned this week that most of the biggest hedge funds Tiger Global, Appaloosa Management and others were selling their entire Apple stake over the last 3 months. There it is, that’s why the stock went down simple supply and demand, it didn’t matter that you told me Apple had this much cash, or this much cash flow, all that mattered was there were more sellers than buyers that’s it!!
But instead you read articles from Motley Fool, and their 25 year old Apple Analyst who went to the number one party school in the country Arizona State University, and who has zero-zilch experience in the hedge fund industry or Wall Street. You also listened to the hacks at Barrons, Wall Street Journal who said Apple was a great value at $500. So for your own good and for your own retirement account at least listen to what I am saying.
On Zynga (symbol: ZNGA) I told you months ago, I liked the chart and the fundamentals of this stock at $2.80. Today it’s $3.50, and oh by the way one of the biggest Activist Hedge Funds in the World, Jana Partners just disclosed today that it purchased over 25 million shares of Zynga, coincidence, I think not.
Folks I might not be a genius but I am persistent with over 15 years of experience working in the hedge fund industry including a top ranked Billion dollar Hedge Fund means I have learned a thing or two. I know what stocks hedge fund like, I know what stocks activist hedge funds like and I tell you all this in my service The Billionaires Portfolio.
I also know what stocks Hedge Funds and Mutual Funds like to sell, I was a trader at a hedge fund and a big institutional investment firm, I know how big funds blow out a stock and what it looks like. And again I tell you all this in my Billionaires Portfolio Service.
But no you would rather read articles by The Insider Monkey written by a 28 year old girl who has never worked a day in the hedge fund or investment industry.
Folks I am trying to give you the news before it’s printed. I mentioned Zynga two months before it was disclosed that one of the biggest hedge funds in the world was buying it, and yet you ignore it. If you want to know what’s really going on in the stock market what the big money players are doing what they are buying, what they are selling than do yourself a favor and subscribe to my Billionaires Portfolio at https://www.fxtraderprofessional.com/order/billionaireport/
President of the Billionaires Portfolio
As always email with any questions at email@example.com
Let me tell you a sobering fact about the mutual fund industry: Ninety-eight percent of all mutual funds have underperformed the S&P 500 over the last 10-years.
That’s right. Only two percent of all mutual funds have beaten the S&P 500 over the last 10-years.
So, out of the 10,000 mutual funds that invest in stocks, only 200 have beaten the S&P 500. That’s horrendous. So for you, the mutual fund customer, you are facing some horrible odds when trying to pick a good one.
Listen, you would have a better chance betting on sports or horses than you would trying to pick a mutual fund that will beat the S&P 500. So stop doing it!
Mutual funds are for the common sheep. Everyone in the hedge fund industry jokes that mutual fund are the “ McDonalds of Investment Products” – heavy on marketing, weak on quality and bad for your health.
How do I know this sobering statistics?
Several years back, I was paid by an investment management firm as a consultant, to do an extensive study, alongside a PHD from MIT. Our task: To see if we could build a model or ranking system that would predict which, if any, mutual funds could beat the S&P 500 over the next one, five or ten years.
We had over 30 years of data on 18,000 mutual funds to use in our study. My research partner and I ran over 1 million simulations/tests to see if there were any predictive characteristics, such as manager tenure, turnover or investment style, that would predict whether a mutual fund would outperform.
Guess what? We failed. We could not find any trait or characteristic that would predict mutual fund outperformance.
Why? Because they all buy the same stocks. They all have high fees. They all have rules, which will not allow them to buy certain securities. And the ones that try to be contrarian tend to ultimately blow up and have a horrible year, right after they show some outperformance.
Remember, I did this study with one of the smartest mathematicians in the world — a man with a PHD from MIT in Mathematics, and he worked for The Department of Defense in the 1970’s as a code breaker. Let me just say this, if he could not find a way to predict which mutual funds would beat the S&P 500, there is no way you can! Trust me!
If I were you, I would sell all of your mutual funds in your 401K, I don’t care if your company matches or not, it doesn’t matter. I promise you that you will never retire rich investing in mutual funds. There is not one mutual fund over the last 20-years that has returned more than 15% a year, not one.
Remember, not only have I told you that you should be returning 30% to 50% a year, but the world’s richest man, Warren Buffett, has told you the same thing. So if you don’t want to listen to me listen to mega billionaire Buffett.
So how do you return 30% to 50% a year? You invest differently than the masses. An easy way to achieve good, meaningful returns … you follow the world’s richest billionaire investors and hedge funds like I do.
Take David Tepper of Appaloosa Partners…
The media loves to squawk about how great he is, NOW. Ninety-nine percent of industry professionals didn’t even know who he was 18-months ago. I did. I’ve known his every move for well over a decade. Why? He has returned 40% a year over the past 20 years. Let me repeat that: David Tepper, a self made billionaire has returned 40% a year annualized over the last 20 years.
How did he achieve this 40% a year return every year for 20 years? Because he invested the exact opposite the way mutual funds and brokers do.
He buys stocks under $5. Mutual funds and brokers don’t. Plus they will tell you that stocks like that are “dangerous.” You know what’s dangerous, the guy telling you that.
On the other hand, Tepper (not a hack broker, but a Billionaire) buys stocks that are distressed and completely left for dead by Wall Street. And he does serious research before he invests. These are all things mutual funds and your brokers never do!
But I do.
In my service, The Billionaires Portfolio, some of our biggest winners were stocks that were left for dead by Wall Street, even though they may have had a multibillion dollar market cap.
Consider this: We bought a deeply undervalued ($3) stock that is now up more than 120%. And we followed two of the best billionaire investors in the world into these stocks.
Guess what? When a billionaire plows us much as 10-15% of his net worth into a stock, he’s not going to sit back and watch what happens. He’s going to make it happen. He will create value in a company. And in turn, he creates value for me and my customers.
That is what we do in our service, The Billionaires Portfolio. We follow the best. Join us: https://www.fxtraderprofessional.com/order/billionaireport/
Oh, and by the way. Guess how much of his own net worth your favorite mutual fund manager puts into the stocks he buys. Less than 5%! That’s right. The average mutual fund manager puts less than 5% of his net worth into his own mutual fund. And yet you put up to 100% of your net worth in these funds. Don’t do it.
We have had great interest and feedback from readers of the blog over the last four months. That makes me very excited. Why?
Because my partner and I started this website, billionairesportfolio.com, and our flagship investment research service, The Billionaires Portfolio, to even the odds between Wall Street and Main Street.
I want to put the lazy, unqualified people that have been giving you bad advice, and skimming your investment accounts for big fees, out of business. If you are bad at what you do, you should be forced to find another line of work. The model set up by Wall Street, though, has taken performance out of the equation. These people are bad at what they do, yet you keep giving them your money.
Listen, I am sick and tired, and frankly pissed-off, at the way average investors are treated. And I’m appalled at the quality of advice they receive from their financial advisors, their crummy mutual funds and their rigged 401Ks .
Tonight, I want you to look at your investments: your 401K, your trading account … and ask yourself the following questions:
1) Am I making money?
2) Is my account averaging 30%-50% a year annualized? If not, fire your broker and sell your mutual funds. My service The Billionaires Portfolio is up almost 20% in less than 9 months, while taking on less risk than investing in the stock market. And guess what? I don’t watch CNBC OR read the Wall Street Journal. That does absolutely nothing to help you make money. Next question …
3) What kind of fees is my broker charging me? First, what is the “load” (or sales fee) on the mutual fund I’ve been steered into? My guess is you are paying around 2.5% to 3%. That means if you have a $100,000 account you are being charged $3000 a year by your broker. And I would also guess that they are nailing you for another 2% or so by coercing you into an annuity or just soaking you on up-front sales fees or spreads on trades. My service, The Billionaires Portfolio costs $999 for one year or $297 a quarter (and it’s up nearly 20% in less than 9 months). Again, if you’re paying exorbitant fees, call your broker up and fire him. He is ripping you off. Same with your mutual fund. Also, look at the commissions your broker is charging you. My guess, he is charging you a $100 a trade, while most online brokers charge you $5 a trade. Again, your broker is ripping you off, fire him.
4) Does your broker drive a nicer car or live in a better house than you? If yes, fire him. Why? How do you think he is paying for all those fancy things? With your money. He is ripping off his hundreds of clients (most of them average middle class people) to the tune of $5,000 a year/ per client on average. And I bet your performance still is mediocre. In fact, I bet you haven’t made a dime in your investment account over the past year.
5) Has your broker tried to sell you an annuity? If your broker tries to sell you an annuity or a mutual fund with a load he is crook! Just Google “annuities” and “sales loads on mutual funds” and you will find hundreds, if not thousands of class action lawsuits against companies that sell annuities. If you are paying a sales load on anything, you are an idiot. And you are letting your family and kids down. If your broker or financial planner has sold you any product with a sales load, don’t just fire him, sue him … no joke.
If you don’t understand how to find out what your broker is charging you in fees and commissions, or in sales loads, pick up the phone and ask him. By law he has to tell you what he is charging you.
Let me repeat: Call your broker and ask him these questions:
What is the management fee you are charging me? How much are you charging me in commissions or to make a trade? Have you sold me a mutual fund or annuity with a sales load? Folks he has to tell you.
Again, if you are not up 30%-50% a year, fire your broker and mutual fund. But you need his help, you say. Believe me, he is not there to help you. He is there to figure out how much money he can make on you. I can help you. If you can read, I can help you.
I am writing this blog and running The Billionaires Portfolio to help and educate you, the retail investor.
I don’t care what people think about me. I don’t care what the industry would think about this? I don’t care.
I want you to get the same tools that I provide to my rich clients. I want you to make 30% to 50% a year and be able to retire and send your kids to college.
That’s why I am doing this. I don’t need the money. But I like to make money. It’s fun. And the internet is an amazing tool to communicate with the world. Believe me, if I can destroy the business model that has been ripping off investors for a very long time, I will make a lot of money from it. And that’s what I intend to do.
I want to even the playing field between the rich and the middle class and I also want to expose the abuse that is going on in the brokerage and mutual fund industry. And I want to help you use the markets to make money. It’s not that hard, despite what all of these charlatans will tell you. I tell you almost every day in this blog how to make money.
So keep reading, and if you want to join me, subscribe to the The Billionaires Portfolio here at https://www.fxtraderprofessional.com/order/billionaireport/
President, The Billionaires Portfolio
Folks, I am frustrated. Over the past four months, on this blog, I have provided you with huge winning small cap picks (ex. Trina Solar: symbol TSL, which is up more than 50%). Then I gave you Eagle Bulk Shipping (symbol EGLE), which is up almost 100%.
Then my partner and I told you to sell gold, three different times. Each time if you would have purchased options after this you would have made more than 100% in less than a week. But most importantly, if you’ve been suckered into owning gold, you should have been out before the bottom fell out it at 1522.
I also told you, since February, that stocks are king – you should be buying with both hands.
Stocks have continued to go up, while the gold and deadbeat bonds your broker put you in have gone down.
Then, after all of that, which should have easily made you and saved you thousands of dollars, I gave you one of the biggest option picks of the year. I told you about a Sprint call option which I thought was incredibly cheap. In less than a month, that option was up 560%. That’s a 560% return in less than a month!
If that wasn’t enough I told you last Wednesday that Stanley Druckenmiller, the king of hedge funds, is telling you to buy stocks, sell commodities and sell the Aussie dollar. What happened over the course of Thursday and Friday? Stocks continued higher in the face of a route in commodities and currencies (especially the Aussie dollar).
Moreover, as someone who has been in the hedge fund and investment industry for more than 15-years, I’ve told you that your friendly neighborhood broker, who has never traded for a living or even seen the inside of a real investment shop, was ripping you off to the tune of 2% to 3% a year in fees and commissions (if you’re lucky).
I told you that Warren Buffett, the world’s richest man, told you that if you were not earning 30% to 50% on your IRA or 401K, than you were failing, or your stock broker or mutual fund manager was failing. And therefore you should fire them and seek other advice.
So let me repeat that: Warren Buffett, the world’s richest man, a man who has the greatest investment track record in the world said if you have less than a $10 million account, you should be earning 30% to 50% a year. Yet you are still listening to your broker and mutual fund manager.
That’s fine. The more people who follow the herd (follow stock broker’s advice, invest with mutual fund managers, trade their own account on CNBC tips) the better it is for me and the people that listen to me.
Unlike most of the scum in this industry, I have used the internet to help people. Not to rip them off. I have a service that is very simple to follow, and very reasonably priced. In my service, I provide the most simple and powerful investment approach that I have ever found in my 15-years in this industry. I find out what the richest, most powerful investors are doing. And I follow them. Can I make money other ways? Sure. I’ve shown you plenty of ways. But for the average guy, there is nothing more powerful than following the best. Go play golf. Spend time with your family. Don’t waste your life watching CNBC and trying to time the market. Let the billionaire investors of the world work for you for a change. They spend the money on resources, they use their power and influence, we go along for the ride.
If you have followed my service, you are up almost 20% in less than eight months, while holding as much as 50% cash in our portfolio.
So look, if you want to be average and poor, and still invest with corrupt brokers and mutual funds, you just continue to create market mis-pricings for me. It gives me a chance to have a little fun on the side with the types of trades I described above.
If you want to continue to listen to the 25-year old journalists with no trading experience at all of the crappy investment websites out there, go ahead. Don’t listen to us. We have a combined 30-years of experience trading for billion dollar hedge funds.
When it comes time for brain surgery, would you rather have a surgeon with 30-years experience and Harvard medical degree, or would you rather a guy cut your head open that has a mail away degree from the islands?
Think about it.
Editor of the Billionaires Portfolio
Billionaires are dumping Facebook!
One of Forbes 400 youngest and smartest billionaires, Chase Coleman, of the $10 billion Tiger Global hedge fund dumped his entire stake in Facebook. That’s rights, he sold every single share he owned of Facebook.
And you still own it, or buy it! I told you earlier this week. Only buy Facebook if you short Linkedin against it. In that case, you have a chance to make money. Why? At least, you are owning the least overvalued stock.
But listen, one of the richest and best hedge fund billionaires in the world sold all of his Facebook shares. Consider this: Chase Coleman employs analysts from Harvard, Stanford, MIT, etc. … and pays industry consultants hundreds of thousands of dollars to tell him what is going on with companies and stocks.
Yet you think by reading articles on the internet by English majors who never worked on Wall Street (i.e. Motley Fool ) or journalism majors who are 25 years old and never traded a stock (i.e Insider Monkey) that you will know more that a billionaire hedge fund manager with all of the resources in the world at his disposal? Give me a break. Get real folks.
Okay, here’s a reality check …
1) The mutual funds in your 401K stink. They are too diversified. They own hundreds of mega cap companies that never move. Newsflash: They want you to keep plowing your paychecks into these things so they can crush you on fees. They get rich. Not you.
2) If your 401K or IRA is not up more than 15% this year, fire your broker, financial advisor, private banker, mutual fund manager, whatever these people call themselves. The stock market is on fire. The global central banks have given you a green light to buy stocks and make money. Yet your scratch golfer broker probably has you in bonds and gold. Tell him to quit golf and take some courses in finance and global economics.
I live and breathe markets and research. That’s how you make money. Being a scratch golfer does not make me money. Being the best exerciser does not make me money. Knowing how to read cues in markets and how to squeeze the vulnerable sheep in markets does! Where are the vulnerable sheep now? They are long gold. They are short stocks. They are short the dollar. And they are long commodities. They are positioned exactly the wrong way.
If you want to get rich, do what rich people do. That’s what I do. And that’s what I do for my subscribers in my research service, the Billionaire’s Portfolio. It’s the only service that lets you invest alongside the world’s greatest billionaire hedge funds and investors. We have had three stocks that have gone up more than 100% in less than 8 months, but most importantly, by following the world’s greatest investors, our portfolio is up nearly 17% in less than eight months (and for most of that time, we’ve been heavily in cash while we’ve been building the portfolio).
When we follow billionaire investors into stocks, we don’t gamble. We are not making bets. We know that these investors are going in with a plan to unlock value in that company — to produce a huge return for themselves. When they do, they produce a huge return for us.
So join my service (click here). Or stay poor and stay with the mutual fund companies that charge you high fees and give you singles digit returns.
Editor of The Billionaires Portfolio
The famous Ira Sohn Conference is going on in NYC as we speak, this conference features the most powerful Billionaire Hedge Fund Managers in the world and their best long and short ideas.
So here are some of the best tidbits from today:
One of my Favorite Billionaire Hedge Fund Managers- Stanley Druckenmiller, a man who probably has the greatest single long term track record of any hedge fund manager in history. Druckemillier averaged over 32% annually for more than 25 years, with only one down year.. and was also George Soros’s right hand man in the 1980′s, which has made him a multi billionaire.
Druckemiller said the following
- He said the Stock Markets will keep rising.
- He said there is no chance of any bear market until the Fed Signals an end to QE
- He said the commodity super cycle is over and he is short commodities, commodity companies and commodity currencies.
- He especially likes the Australian Dollar to go down a lot, and is heavily short the Aussie.
Kyle Bass, another great global macro hedge fund manager, really likes the stock Dexone Corp, symbol, (DEXO), he thinks it has huge upside.
Activist Investor Keith Meister, a Carl Icahn Protege, said he is buying huge chunks of Level One Communications (LVLT) and TW Telecom (TWTC).
Famous Activist Bill Ackman says that he thinks Proctor and Gamble (PG) is worth more than $125 a share. It is currently $78.50.
Famed Short Seller Jim Chanos said Seagate Technologies (STX) is a great short sale candidate!
Editor of the Billionaires Portfolio
Okay, I want to talk about a few things today …
First, we often get emails from people that think they can enlighten us. They like to tell us “a collapse in stocks is coming”, “hyper-inflation is coming”, “load up on gold or you’ll be sorry”, etc. In short, all of one-liners that the sheep have been fed by the charlatans on TV for years now, and even your trusty Wall Street Journal. Guess what? It hasn’t happened. They’ve been saying it for years. It’s not just that they’ve been wrong that’s annoying, it’s that the basis for their arguments is wrong, and reckless. And it’s undoubtedly lost people a boatload of a money.
Invariably, these emails come with a link to some article that has shaped the emailer’s view. Nine times out of ten, this “article” is not really an article, it’s nothing more than a sales promotion from a typical hack newsletter, that has taken a hodgepodge of lies, myths and factually flawed theories, put them together in a “shock the world” expose.
Some of the culprits: NewsMax, Agora, Sovereign Society, etc.
Some of these guys: Steve Sjuggerud, Martin Weiss, Peter Schiff, Bill Bonner, Addison Wiggin. Porter Stansberry.
If you see these names, run. It’s all garbage.
Peter Schiff has been telling you over the year that the US Economy and the dollar were going to tank, they never did. (I have a correction: Mr Schiff called my company two times today to explain that his clients did not lose the amount I posted, but I can not find any performance numbers available for his funds, so you can visit his website if you are interested in his performance numbers. My point was that there was a huge opportunity cost, very big and painful, to anyone who was selling stocks, betting against the dollar and the U.S. Economy… all things Mr. Schiff has said very publicly on CNBC,YouTube and in articles ALL over the internet). He’s not alone, most of them have. And virtually all of these guys have told you to dig a bunker and surround yourself with canned foods and gold. Any of these flawed recommendations should be good enough for a life ban from ever giving anyone advice again.
Because we know the sheep have been herded into this dangerous gold trade, we’ve tried to warn you to get out. The bottom is ready to fall out of this flawed trade. My partner, Bryan Rich, has told you twice now, here on this blog, to sell gold. Get out! Both times he has given you the exact level at which to sell (first ahead of 1522…and the next time ahead of 1460). Each time he has been dead right. Heck, if you had bought puts on gold each time he’s told you to sell gold, you would have doubled your money quickly. But the point is, don’t be caught holding the bag on this trade thinking you should own 1500 dollar gold because you think the dollar is going to zero. It’s not. It hasn’t. And it won’t. The Fed policies are keeping our economy alive (just as the policies are at other central banks). But that’s it. Even after three rounds of QE, there is as much risk of a deflationary spiral as there was six years ago. Enough said. Chuck your gold.
And remember this, stocks now are up more than 14% year to date, and gold is now down 13% year to date. You have lost 27% of your hard earned money listening to people that have zero background in economics or investing experience (these journalist and newsletter hacks).
Who do I listen to? First of all, I do my own research. Primary research. I don’t let journalist at the Wall Street Journal tell me what to think. And I don’t let former radio disc jockey’s/turned TV hosts tell me what to think.
The opinions I care about? … billionaires … rich people … the best investors in the world … and central bankers. In short, people that have power and influence.
That’s who I want to hear from. That’s what my research is all about. And that’s what my service is all about, The Billionaires Portfolio. Listening to, and following the best. Instead of running with the sheep, my subscribers are making money. We are beating the stock market. We have creating wealth in this environment, just like the world’s best billionaire hedge funds and investors.
So what can you do now? Cancel your subscription to Barrons, Wall Street Journal, etc. Fire your C-student, zero trading experience stock broker, and listen to what the richest people world are telling you.
We are doing a live portfolio review this Thursday for The Billionaires Portfolio. I go over every stock pick in our portfolio and answer any and all questions. So get on board now, it’s the perfect time. My goal is not just to make you wealthier, but to teach you how to think like a successful investor – not like the herd. Click here to subscribe https://www.fxtraderprofessional.com/order/billionaireport/
Editor of The Billionaires Portfolio
Buffett: At his annual Berkshire Hathaway meeting this weekend Buffett said stocks are still the only game in town and said the stock market is not in bubble territory.
Apple and Facebook: These stocks are at inflection points. Both stocks have seen some recent positive momentum, and technically are starting to look good. But I am still not hearing a lot of hedge funds or billionaire investors who are buying heavily into these stocks. So as I told you before, tread carefully here. Do not buy options on these stocks, but you could start dipping your toes back slowly into these stocks.
Gold: If you own GLD, you are going to lose money. If you own gold futures or gold bullion, you are going to lose money. It’s a matter of time. Same with silver, and the silver ETF. If you own it, you are going to lose money. It’s that easy. The gold and silver bull market is over. It’s done. Every billionaire, including Buffett has told you gold is a terrible investment. So please stop listening to conspiracy theorists and uneducated newsletter editors on how gold is a safe-haven investment. Listen to billionaires. Billionaires are buying stocks and selling gold and silver.
If you are scared to buy into the stock market, but have cash ready to invest, I can help. I run an institutional quality stock picking service called The Billionaires Portfolio. The Billionaires Portfolio is the only research service in the world that lets you invest alongside the world’s greatest billionaire investors and hedge unds. I use my extensive database and network of contacts to find out what stocks billionaires are buying. And I share that information with my subscribers.
To find out what the world’s greatest billionaire hedge funds and investors are buying, subscribe here.
Editor of the Billionaires Portfolio
Today I want to talk about a compelling pairs trade. And it includes two of the hottest names in the internet space.
LinkedIn (Symbol: LNKD) has been one of the most profitable IPO’s of the past couple of years. It’s up more than 300% from its original IPO price of $45 and is up 65% year-to-date.
Facebook (Symbol: FB) on the other hand, hasn’t fared quite as well. After opening with a bang last year, the stock was quickly cut in half. For shareholders, it’s gone from a scary ride to relatively boring one.
Now, first let’s talk about the LinkedIn side of this trade. The amazing thing about LinkedIn’s performance is its valuation. The company is obnoxiously expensive. It currently sells for a mere 1,287 times earnings – that’s a P/E ratio of 1,287. Each dollar of sales for the company is valued at $22.62 by the public market. And its price-to-cash flow is a whopping 160 (no decimal place there).
These are some of the highest multiples I have ever seen. But as you can see investors have completely ignored it.
Now, the only reason LinkedIn is gone up more than 300% since its IPO, and amassed a $20 billion market cap, is due to its massive membership base. LinkedIn has more than 220 million members. And this number has been growing steadily every quarter. With that, the market is valuing each member on LinkedIn at about a $90 per member (220 million X $90 = $19.8 Billion).
But here’s the thing. Less than 2% of LinkedIn’s members ever buy anything!
So in that respect, LinkedIn is not any different than Facebook.
But, let’s consider how the market is valuing the Facebook following …
Facebook has 1.1 billon members and currently has a $67 Billion dollar market cap. So that values each member at about $61.
So let’s recap: LinkedIn members are being valued at $90. Facebook members are being valued at $61.
I’m willing to bet this gap will narrow. In both cases, these companies are showing little aptitude toward monetizing their audience. Yet their followers are being valued at wildly differently levels.
So the best way to take advantage of this valuation gap is pairs trade. A pairs trade is market neutral trade, where you buy one stock and at the same sell short another stock in the same sector (same dollar amounts).
Since they operate in a very similar business environment, there should be little market risk associated with this trade. I win if this valuation gap narrows. I lose it if it widens. I like my chances.
Editor of the Billionaires Portfolio
For those of you that don’t know, billionairesportfolio.com is the only website in the world that sends out free real-time text alerts whenever a billionaire investor buys 5% or more of a stock.
Today I’d like to share a new text alert we just sent to our members. Billionaire hedge fund, Jana Partners, a legendary activist hedge fund, just disclosed a 9.2% stake in Oil States International, symbol (OIS).
This is a huge stake in a large cap oil and gas equipment company. My belief is that Barry Rosenstein, the Wharton MBA and head of Jana, will try and break up the company or sell it to the highest bidder. I think the market shares this view. The stock is up more than 4% today.
Jana Partners is just one of the many top performing hedge funds and billionaire investors we follow in my research service, The Billionaires Portfolio. It’s the only investing service of its kind that allows the everyday investor to participate in the same stock picks as the world’s richest, most powerful investors.
Every week, I scan hundreds of stocks that these exclusive investors are buying, and I only select the ones that have the biggest home-run potential. I define these as stocks that can go up 100% to 200% in a few months, or 500% to 1000% in a year.
Our current portfolio is loaded up with stocks that have the ability to produce these returns. We’ve taken one double off of the table this year, we have two doubles on the books, and I think we’ll have at least one three or four-bagger in the coming months.
Consider this: We currently own a stock that sells for around $2. It has more cash on its balance sheet than the entire company’s market value. And it is owned by one of the world’s best hedge funds. This hedge fund owns 15% of this company, and has been pushing on management to cut costs and increase their profit margins.
Put simply, this fund is imposing its will on the company, to make it profitable. With that, I truly believe since the stock is so undervalued that it could go back to its 2011 high of $10.50. That would be a 400% plus return from this stock’s current share price. That’s 400% upside on a stock that is selling for less than the cash on its balance sheet.
To find out the name of this stock, the symbol, and the hedge fund who owns it, subscribe here.
Also, an update from my previous blog post on Apple …
For those of you that frequently read this blog, you’ll know I’ve been quite bearish on Apple. But I now think Apple has turned the corner. Remember though, Apple is a buy if it closes over $445 to$450 – not trades above that price, but closes above it.
All the Best
Editor of The Billionaires Portfolio
I told you on Friday to sell gold. In fact, my partner, who called the biggest breakdown in the history of gold, told you that the rally back toward 1500 over the past two weeks, gave you a “second chance … a gift, to sell it now!”
Let me repeat: My partner CALLED the crash in gold – ON THIS BLOG (read it here). And he told you on Friday that this bounce was a gift to sell it for the next leg down.
I hope you did. And if you own the gold ETF (GLD), please take my advice: Get out while you can!
Given the extent of disasters and blow-ups we’ve seen in the past five years, even if I did like gold, I wouldn’t want to be holding the gold ETF, wondering if it can withstand a collapse in spot gold and all that comes with it (margin calls, forced liquidations, etc.). So, again, here’s my ultimate warning: Get out while you can.
My partner’s note here on April 26th addresses the fundamental flaws with the gold trade very succinctly. From a performance standpoint, it’s down more than 11% year-to-date and is down more than 13% in the last six months. This may not sound terrible to some, but in comparison to the stock market its devastating, and its the reason you will never be able to retire.
Here’s why …
People who are invested in stocks are up 14% over the last 6 months — up 13% this year alone. If you have followed Wall Street’s guidance, you have bought gold and are likely well underweight stocks. What they don’t tell you is, there is a bigger cost associated with holding gold, other than just the losses you are enduring. It’s called opportunity cost. In short, the money you have in gold is money you could have in stocks. With that, your not just losing 13% in the last six months on your gold investment. Your losing 13% plus the 14% S&P return that your missing. That’s 27% in six months. All just to have an inflation “hedge?” Boy, your expecting a lot of inflation.
Think about it, gold does not pay dividend and its long term annual return over the last 50 years is less than 2%. That’s less than a CD or savings account.
But, listen, I am here to save you again. We’ve told you to get out of gold if your long. And I wanted to help you make you some money. Gold and silver have given us beautiful setups to buy downside options.
However, the horse is out of the barn. The options I was looking at late yesterday afternoon, to share with you in this blog, have already doubled – up more than 100%.
If you want to make money, stick with me. Our advisory service, The Billionaires Portfolio only buys stocks that can go up 2x, 3x … even 10x or more. And we only buy stocks owned by powerful billionaire investors. Why? They impose their will on the companies they buy. They control their own destiny. They control outcomes. We go along for the ride. And I’ve just added a new feature. From time to time, I will be using options to juice the portfolio for bigger gains.
You can sign up here.
Editor of the Billionaires Portfolio
Here in my free blog, I think it’s important to educate you about the markets. I’ve told you to stay away from people that will take your money.
Frankly, I’m tired of watching used car salesman skim money from the masses (that includes brokers, the mutual fund industry and Wall Street). So consider me your broker’s worst enemy.
Also, I’ve told you plenty of ways to make money.
That’s another thing your broker won’t like. He likes to tell you how hard things are, “how dangerous the markets are right now.” That couldn’t be further from the truth.
In my latest posts:
1) I told you to sell Apple until it closes over $445. Apple is down more than 20% year-to-date, and has still has not closed above $445 — even though broader stocks have been making new record highs.
2) I told you to sell gold and silver, and gold an silver stocks. Obviously, this has been a huge home run trade. Many of the leveraged inverse ETFs (ETFs that profit when gold and silver stocks go down) are up more than 100%.
3) I told you to use my secret stock replacement strategy to buy options in some cases instead of stocks. I bought Sprint call options that made over 560% in less than a month and I laid the trade out right in front of you here, from entry to exit.
4) I told you to buy a few juicy small cap stocks (tickers: EGLE, TSL, YGE). Eagle Bulk and Shipping is up almost 100% in two months. This is a stock not an option! Who else has given you a stock that doubles in two months? Seriously!
5) I told you that you should be making 50% a year on your portfolio. If you’re not, you should fire your broker, mutual fund, financial advisor, Wall Street Journal. etc. In fact, it wasn’t me saying it, that was straight from the mouth of Warren Buffett.
6) I told you to buy The Billionaire’s Portfolio. This is my weekly research and advisory service. My members are average investors, just like you.
Listen, my fee to advise institutional investors on hedge fund portfolios is over $50k a year. The minimum investment to invest with a top performing multi-billion dollar financial titan is typically $10 million. That obviously locks the average guy out. Why? There is no reason. The SEC claims they are protecting you. What they are really protecting is Wall Street. Because if you could access real investment strategies that make people rich, you would never buy a crappy mutual fund again. You would never speculate on crappy stocks that newsrags are writing about, or that brokers are pitching.
The Billionaire’s Portfolio is your access to these rich, sophisticated investors. I’ve designed a service, where I give you all of the best stocks that are making billionaires richer every day — for $297 a quarter.
What more can I do for you?
I tell you exactly how the richest, smartest investors on the planet make money for less than what you pay for your cell phone every month.
Plus, my members consistently beat the S&P with less risk. And we don’t invest in boring stocks. We only buy stocks that can be huge winners! That’s the billionaire’s secret. They don’t get rich buying GE.
I’m leading you to water here. It’s up to you to take a drink. To get on board click here.
Editor of the Billionaires Portfolio
A couple of weeks ago I posted a note from my partner, one of the best macro traders I know, warning you that a “messy unwind” was in-store for gold. He told you that 1522 in gold was the big breakdown level. Indeed, that was the level that started the purge in the massive gold trade.
He’s telling me today, this unwind is far from over. And he says gold is giving you the “gift of a lifetime!”
He says, “It’s a second chance … a gift, to sell it now!” I couldn’t agree more.
Below is more of his analysis. You should read this carefully …
“You can see in this chart below the ugly breakdown in gold. And you can see the beautiful 61.8% retracement of the breakdown. The sheep-herders (Wall Street, Bill Gross types, financial advisors, mindless financial journalists) have all been working overtime to keep the sheep (mom-and-pop, the average guy, the mindless institutional investor drones) content and optimistic, while riding the sinking gold ship. And they’ve convinced plenty to gobble up more gold here.
With that, we get a text book technical pattern to sell, as you can see in the chart below.
Again, this is the gift. If you have been sucked into this gold trade, get out, while you can. The entire logic behind this gold/hyper-inflation hedge was flawed to begin with and has been proven dead wrong. Five years into the global economic crisis, and trillions of dollars worth of emergency policies extended (from all global central banks) and yet we still teeter on the edge of a deflationary spiral. Why? Because you can’t print your way to demand in a massive global debt crisis. Without demand, there’s no jobs. Without jobs, there’s no wage inflation. Without wage inflation, there’s no credit demand. No credit demand, no inflation. No inflation = Don’t get stuck with gold.”
So why are you holding the bag (of gold), with a massive premium that has been priced-in for a scenario that is proven to be flawed?
Believe me: My friends, some of the smartest hedge fund traders in the business, are laying into this trade (i.e. adding to shorts). Don’t be on the wrong side.
You don’t get rich buying gold. If you want a way to get rich, follow our Billionaire’s Portfolio service.
To become a millionaire, you want to mimic people who have already made millions or billions. And that’s exactly what we do in our advisory service, The Billionaires Portfolio.
We follow the world’s richest, best billionaire investors, and their stock picks. Did you broker or mutual fund buy Blackberry, RIMM, at $8 or better? We did.
Do you ever think your crowd following broker or mutual fund would ever have the guts to buy a stock near its 52 week low, that Wall Street had forgotten about? Of course not. But we did.
As an old hedge fund friend of mine said, a man who is in his 60′s and worth over a $100 million dollars (all self-made), there is no greater scam upon the public then the mutual fund industry or the brokerage industry. It’s the only business where you get paid even if you lose your customers money.
Our advisory service, The Billionaires Portfolio only buys stocks that can go up 2x, 3x … even 10x or more. And we only buy stocks owned by powerful billionaire investors. Why? They impose their will on the companies they buy. They control their own destiny. They control outcomes. We go along for the ride.
Okay, I did this yesterday. And I’m offering it again today. Because I know you need my service, and because I know when people join my service, they don’t leave, I’m happy to give it to you today with zero risk. If for some reason it doesn’t suit you, email me within the first month and we will refund your money in full. So go ahead and get on-board.
You can sign up here.
Editor of the Billionaires Portfolio
Yes I just said that. And you can quote me! If you want to get rich, do not buy Google, Amazon or even Apple stock. Instead buy stocks with no earnings if you want to make 50% a year.
Why would I say something so crazy, so diametrically opposed to broadly accepted theory?
Well, I like to keep things simple, and there is very simple logic behind my statement.
Here it is: The world richest man, Warren Buffett, followed that rule and did so for over 12-years when he ran his hedge fund, becoming one of the richest men in the world.
Don’t take my word for it. Read Buffett’s own words.
This excerpt from an old Businessweek article I’ve had filed away since living in my dorm room says it clearly. Here it is … Warren said, “If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance, is selling.
The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million even $10 million. No, I know I could. I guarantee that.”
That is probably my favorite quote in the history of investing. Warren Buffett is saying that if you have less than $10 million to invest, then you should be earning 50% a year in the stock market.
How can Warren Buffett guarantee that he could make 50% a year, if he was investing less than $10 million dollars?
I’m going to tell you.
You may not know this, but Buffett ran a hedge fund in the 1950’s and 1960′s that was hugely successful. He beat the S&P 500 every single year for 12 straight years, and never had a losing year. He averaged around 50% a year in his hedge fund. But It was the size of the assets he was managing that ultimately suppressed his returns (which at 20% annualized are still among the best in history).
So how did Buffett hang a 50% number consistently when he was small. First, when he started investing, he used the classic deep value investing approach he was taught by Ben Graham. I am not going to go into Graham and his deep value investing strategy, there are 100′s of books on it and articles on the internet about it.
But what I will tell you is the way Buffett invested when he ran a small hedge fund, is a lot different than the way he invests today. Buffett, back in his early days, purchased deep value stocks that had asymmetrical risk-reward return scenarios. Let me say that again. He only bought stocks that had asymmetrical risk-reward.
What this means is that he purchased stocks that were so undervalued that they could easily go up 100%, 200% even 1000%. Yet the risk the downside to the stock was minimal or almost nothing.
How is that? The companies he invested in had tons of cash, zero debt, traded below book value, and a lot of times traded below their net cash level (meaning the company had more cash than its entire market cap).
This is the precisely same investing strategy I use in my advisory service, The Billionaire’s Portfolio, and for my own account. In our portfolio, right now, we own at least five stocks that are trading below book value, and have more cash on their balance sheet than the company’s entire market cap. Many of these stocks trade for as little as $2, but once sold for as high as $20.
I know the downside very clearly in these stocks. If they spend much time trading below their liquidation value or book value, or trade much below the cash they have on their balance sheet, a company or investor will step-in, acquire the company, sell all of the assets and pocket the proceeds.
In comparison, Google, Apple and Amazon have huge downside potential – big risk. We have seen how quickly Apple can shed 30% (in 7 months). Google and Amazon in 2007 and 2008 lost 40%. But here’s the big difference. Google, Apple and Amazon have very limited upside. Instead of getting 2x, 3x, even 10x of what you risk (like Buffet says) these blue chip tech stocks could pay you 25% or lose you 50%. I don’t know about you but that’s a bad trade to me.
Consider this: In The Billionaire’s Portfolio, we have a stock that sells $2.06, yet has $2.10 in cash per share and zero debt. The stock is selling for less than its net cash. Remember, net cash means cash minus all debt. So this stock is like buying a CD. It’s all cash. While this stock has NO earnings, it’s been selling assets, which unlocks value in the company. Let me be clear: I don’t care about the company. I just want the stock to go up. And selling assets can make the stock go up. In fact, in this case, with the game-plan that one of my favorite billionaire investors is executing with this company, I expect him to strong-arm this stock right back up to $10, where it was trading just a little over a year ago.
Remember not only do we follow Warren Buffett’s original hedge fund strategy, but we also follow many other Billionaire Hedge Fund Managers with track records just as good or better (50% annualized plus returns) who practice the same assymetrical risk reward type investing strategy.
So think about that risk reward, we own a stock in The Billionaires Portfolio, that has little or no downside but the upside is gives us a chance to make multiples of our money. That’s an investment that can make you rich. But I don’t just do it once. I do it over and over again.
Now, would you rather own a stock like that or Google, Amazon or Apple which you might make 30% on in a year best case, but you could lose 40% if you’re wrong, or the market sells off.
Let me tell you a story about a stock that my boss at the hedge fund I worked at purchased back in 2002. This stock which had no earnings but had $7 in cash and zero debt and sold for around $8, was a little company named Apple. As we all know Apple went on during the next 10 years to be the hottest stock of its generation. My boss by the way who purchased 1 million shares of Apple around $8, well he sold a little early, he sold back in 2007 when Apple hit $200, so he only made a profit of $192 million or 2400% (24 times his money).
So don’t take my word for it, believe my boss who made $100 plus million dollars buying a stock with no earnings, or better yet believe one of the world’s greatest investor, Warren Buffett, who told you that you should be making 50% a year if you have less than $10 million dollars — and the way to do this is to buy deeply undervalued stocks with no earnings.
Now, if you are not making at least 50% a year, and you have less than a $10 million dollar account, Warren Buffett and me, are telling you to fire your Stock Broker, Mutual Fund or any other person who is charging you money and not making you 50% a year.
By the way The Billionaires Portfolio is on pace to put up nearly 50% annualized this year. You need to own only stocks that can go up 2x, 3x … even 10x or more. Because I know you need this service, and because I know when people join this service, they don’t leave, I’m happy to give it to you today with zero risk. If for some reason it doesn’t suit you, email me within the first month and we will refund your money in full. I’ll make this offer today only, for newbies. Right now. So go ahead and get on-board.
You can sign up here… and if you are not satisfied with the service in the first 30 days just email us, call us and we will instantly give you a 100% money back, guaranteed, no questions asked.
Editor of The Billionaires Portfolio
As I told you yesterday, Apple is not a buy yet, this stock need to close above $446 to reverse its downtrend, and that’s my friendly reminder for today.
Lesson 2 on becoming a Millionaire
Leverage… That’s right you need to use some sort of leverage in your investing. Every single Billionaire Investor I have studied has used leverage to juice his returns, even the Great Warren Buffett.
Warren Buffett has historically leveraged his portfolio at 160% or 1.6X times his initial investment, I know this sounds complicated, but all this means is if Buffett invests $1 million dollars with leverage it becomes $1.6 Million dollars. I personally invest a $100,000 like $150,000 dollars, using 1.5 times leverage giving me 50% more buying power, and also juicing my returns by more than 50%. Leverage is what I call the real Billionaires Secret.
The recent news that Warren Buffett used leverage shocked a lot of people in the industry, (by the way if you want to read the articles on Buffett using leverage in his stock portfolio (just type in to google Warren Buffett and Leverage and it will pull up many articles including the Economist.com’s).
But I think a lot of people are shocked when they hear that the supposed conservative value investor, Warren Buffett uses leverage, but he does and thats why he beats the pants off mutual funds stock broker and the like.
Why is leverage so important in trading stocks because, if your just average, and you make 10% a year trading stocks in your portfolio, if you leverage your portfolio like Buffett at 1.6 times, you will then actually make 16% a year. And trust me that’s a huge difference when compounded over time.
The one problem with leverage is that most online brokerage firms charge you a very high rate, as high as 8% to trade on margin or use leverage, so at that borrowing rate its very expensive to leverage and probably not worth it. But there is one publicly traded online brokerage firm that only charges you 1.5% to borrow or leverage your stock account. This is the one I use and let me tell you its like getting free money, remember 1.5% is the interest rate they charge you to borrow for one year (its 1.5% for one year0. So if you buy and hold a stock for just 3 months you will only pay 50 basis points one half of one percent, that is virtually nothing. If you want to know the name of this online brokerage firm email me at firstname.lastname@example.org.
Now another Billionaire who is a huge leverage buff is Steve Cohen of SAC Capital, Steve Cohen uses huge leverage up to 8 times or 800%. Again this means if you have a $100,000 account at 8 times leverage you now have an $800,000 account, and obviously your returns go up by 8 times, and you can now see why Mr. Cohen has been able to put up 80% gross annualized returns in his hedge fund for years. Remember even a small account, lets say $10,000 dollars, that returns 80% a year like Mr. Cohen’s hedge fund, would be worth $11 million dollars 12 years, you could basically retire on the beach in 12 years with $11 million dollars.. But here is the catch, Mr. Cohen is a big hedge fund and he can borrow tons of money for little or no cost.
So how does a small or retail investor leverage his stock account up to 8X and potentially return 80% a year well its easy, and I will tell you if you write me at email@example.com
So in summary: Lesson 2, Leverage is the Billionaires and Millionaires Secret, you will never be a Millionaire or Billionaire if you do not use some type of leverage or margin.
Editor of the Billionaires Portfolio
I told you yesterday, that Apple will beat earnings and they did. I told you Apple would put their cash to work buy increasing their dividend and increasing their stock buyback they did. I told you the stock would get an initial pop, it did 6%. I told you not to buy the stock unless it went up 10% or more which it hasn’t yet. I told you not to buy the options, because if you did you would have lost all your money, because the options were too expensive and the stock did not move enough to move the options.
Now I am going to make you even more money by telling you to only buy Apple if the stock closes above $446, again do not buy Apple until the stock closes above $446. At a close above $446 we will know that the downward trend in Apple has been broken, and then only then is is safe to dip your toes in the water.
Next I want to tell you a couple of secrets that will make you a millionaire and heck possibly a Billionaire if your patient enough. so here they are get a pen and paper and jot these down I am only going to say these once:
1) You will never ever get rich investing in mutual funds, I promise you the only people who get rich in the mutual fund business are the people who run the funds, Fidelity, American Century, Pimco etc. Why because they don”t care about performance, all they care about is raising as much money as possible for their fund and collecting fees. If you don’t believe me just go to Morningstar.com or any other mutual fund website and look at the long term performance of the average mutual fund heck even the the top performing mutual funds they all stink… Over the last 15 years the average mutual fund has returned 5% a year. yes that’s right a paltry 5% a year.. You want to a free tip you can make 5% a year risk free by investing in treasury bonds, and you can sleep at night never having to worry about the stock market.. Also at 5% a year it would take you over 100 years for you to be able to retire as a millionaire. So please be wary of mutual funds, its probably the oldest and biggest pyramid scheme going.
2) To become a millionaire you must be invested in stocks for the long term. Warren Buffett and Carl Icahn two of the richest men in the world with net worth’s over $20 and $50 billion put almost their entire nest egg into stocks, and both men are well over 75 years old, these men are already extremely wealthy and should be playing it safe but they don’t they invest in stocks only. A good lesson right there.
3) To become a millionaire you want to mimic people who have already made millions or billions. and that’s exactly what we do in the Billionaires Portfolio we follow the world’s richest hedge funds and their stock picks. Did you broker or mutual fund buy Blackberry, RIMM, at $8 or better?, no but we did. Do you ever think your crowd following broker or mutual fund would ever have the guts to buy a stock near its 52 week low, that wall street had forgotten about? Of course not, but we did. As an old hedge fund friend of mine a man who is in his 60′s and worth over a $100 million dollars, all self made, once told me there is no greater scam put upon the public then the Mutual Fund Industry or the Brokerage industry. Its the only business where you get paid even if you lose your customer money, think about, I bet your broker and mutual fund took their full fees and commissions in 2008 when you lost half your retirement account, didn’t they!!!
Editor of the Billionaires Portfolio