Tuesday, May 25, 2010


Technically Precious with Merv, May 21, 2010

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Apprenticed Investor: The Zen of Trading

So far the Apprenticed Investor series has discussed a lot of don'ts. Don't do this, don't do that; avoid talking to these kinds of traders; don't say or think these kinds of things.

Well, it's time to shift gears, and since trading is an active enterprise, I'll discuss some things you should do. I plan to expand on these ideas significantly in future episodes.

Taken together, the following 10 rules will not only help you with the philosophical grounding necessary for thoughtful -- and successful -- investing, they will help you avoid some of the more common mistakes made by investors and traders early in their careers.

This is the "Zen of Trading;" It is more than an overview -- it's an investment philosophy that can help you develop an investing framework of your own.(more)

Whitworth Says VIX Shows Equities ‘Not Out of Woods’

U.S. stock market volatility that surged to the highest level since March 2009 may persist as Europe’s debt crisis defies resolution, Relational Investors LLC’s Ralph Whitworth said.

The options-market gauge known as the VIX jumped 28 percent to 40.10 last week, extending its increase since April 12 to 157 percent, according to data compiled by Bloomberg. The index shows investors are paying more to protect against stock declines as governments seek to reduce deficits in Greece, Portugal and Spain. The Standard & Poor’s 500 Index is down 9.5 percent for May, poised for the biggest decline in 15 months.

“Volatility sent a strong message that we’re not out of the woods globally,” said Whitworth, who helps oversee $6.5 billion at San Diego-based Relational Investors. “I expect the modest recovery that’s under way to have resilience, with the major caveat being a big blowup in Europe. That could spread like an infection.” (more)

JP Morgan: Gold May Face 'Unlimited' Demand

Investor appetite for gold appears to be booming as prices have crept upward, says John Bridges, a JP Morgan analyst.

The precious metal could yield a large demand as fears of the euro and the dollar weakening continue, Bridges said in the report, according to the Business Insider.

Gold recently traded at $1195.50.

“A German banker once told us that gold normally trades like a commodity. However, when investors lose confidence in currencies, because the pool of gold is so much smaller than the pool of currencies, demand for gold can effectively become unlimited," Bridges said in the report. (more)

Hedge funds bet big on the falling euro

Hedge funds, including Hayman Advisers and Matrix Group, have told investors that they expect the sovereign debt crisis to worsen despite the €110bn (£79bn) bail-out by the International Monetary Fund, the European Union and the European Central Bank.

Anxiety about the financial health of Europe increased yesterday after Spain’s national bank was forced to take control of CajaSur, a savings bank ridden with distressed property debt, after a rescue merger with a rival collapsed. (more)

Missed Payments

Fact vs. Fiction on Today’s Economy

There is a lot of “noise” being tossed out by the politicos and their preferred pundits about how the U.S. economy is on the mend. Thus it is important to try and separate fact from fiction about where things really stand.

FICTION: Though sporadic, the U.S. economy will continue to improve.
FACT: The U.S. is headed for a currency crisis.

While having learned to cover their butts by adding some modest modifiers to their generally rosy forecasts, the administration’s shills (Geithner, Bernanke, Summers, et al.) are unified in telling us that the worst is over.

The fact is that the U.S., nay, the world, is headed for fiat currency crash. Let me push forward some evidence in support of that contention. (more)

Nouriel Roubini -Double Dip Recession 5 20 2010 CNBC

Burden of Irish debt could yet eclipse that of Greece

OPINION: What will sink us, unfortunately but inevitably, are the huge costs of the September 2008 bank bailout, writes MORGAN KELLY

IT IS no longer a question of whether Ireland will go bust, but when. Unlike Greece, our woes do not stem from government debt, but instead from the government’s open-ended guarantee to cover the losses of the banking system out of its citizens’ wallets.

Even under the most optimistic assumptions about government spending cuts and bank losses, by 2012 Ireland will have a worse ratio of debt to national income than the one that is sinking Greece. (more)

Gerald Celente with Max Keiser on the Edge PressTV 05/18/2010

Chart of the Day