February 6, 2014
- A computer-age soothsayer: How the NSA predicted riots in Brazil
- Reading the data the right way to predict stock market moves
- Elmerraji on why a measly 0.2% move in the S&P 500 yesterday was decisive
- The tax man cometh: Neil George checks in with planning guidance
- The iPhone ban that wasn’t… $15 trillion here, $15 trillion there… the true origins of the beer drone… and more!
“It’s tough to make predictions,” Yogi Berra supposedly said, “especially about the future.” A similar quip is attributed to the Danish physicist Niels Bohr.
But what if computer wizardry took out some — or even a lot — of the guesswork? And what if you could put that wizardry to work in your own portfolio?
There’s been no shortage of attempts in recent years to construct a cyber-Nostradamus. One of the more infamous is the “Web Bot Project.”
Your editor wrote about it in a feature article for Casey Research way back in 2006. The Web bots “troll myriad posts on Internet message boards, trying to detect subtle shifts in the use of language among the vast population in cyberspace. The shifts in language supposedly herald changes in cultural awareness, and those changes supposedly are signposts of future events.”
The proprietors have at best a hit-and-miss record. They achieved a bit of fame when the History Channel featured the Web Bot Project in its Doomsday 2012 special: The bots’ “predictive linguistics” pointed to some sort of cataclysm — which never materialized.
The U.S. government has had a parallel effort — with somewhat better results. At least the results they’re willing to disclose, heh…
“A little-known government office is funding analytic research that could help predict civil unrest, disease vectors and other significant social events,” wrote The Wall Street Journal’s Rachael King last June.
The agency is called the Intelligence Advanced Research Projects Activity (IARPA). Think of it as the NSA’s research-and-development arm.
Many of its programs — and their budgets — are classified. But others are not. One of them, King reported, is called Open Source Indicators, “which reviews a range of publicly available sources, such as Tweets, Web queries, oil prices and daily stock market activity, to gauge the likelihood of certain ‘significant societal events,’ according to a program announcement posted on FedBizOpps.gov.”
Just like the Web Bot…
In September, Open Source Indicators had a confirmed hit.
Riots had broken out in Brazil, coinciding with that nation’s independence day. The injuries and arrests numbered in the dozens. “Our model did forecast several protests in Brazil for last week,” said Virginia Tech professor Naren Ramakrishnan.
Rio de Janeiro, Sept. 7, 2013: An event forecast by the NSA?
IARPA’s focus for now is on Latin America. Previous confirmed hits include riots in Paraguay after the president there was impeached… and an outbreak of hantavirus in Argentina in 2012.
“Having access to NSA-like data collection strategies can be an incredible tool for predicting the future,” says our own Jonas Elmerraji.
We hasten to point out the NSA hasn’t let on to any missed predictions… and if the agency had actually used Open Source Indicators to thwart a terrorist attack, it would be all over the front pages.
But that’s not the point: “Most people don’t know this,” says Jonas, “but this prediction method can be applied to anything that produces a lot of data.”
And when it’s been applied to the stock market, it’s forecast the moves of specific stocks with a “hit rate” of 86.7%.
“Just like the NSA’s PRISM system can pinpoint your movement by crunching numbers that seem meaningless at first,” he explains, “I’ve hacked a system to predict where stocks will be moments… days… or weeks from now.”
And yes, you can put that system to work for yourself — pulling down extra income of $2,571 or more each week.
We recognize extraordinary claims require extraordinary proof. So we invite you to bring your most critical eye to the proof provided at this link.
Yesterday was “the single most important trading session of 2014,” says Jonas. “In fact, it’s the single most important session since last summer.”
Remember on Tuesday, Jonas said it was “make or break” for the market this week. Yesterday, the S&P closed up 0.2%. On the surface, no big deal. But here’s where his predictive tools come in so handy: That tiny movement signaled the “key reversal” he’s been looking for.
Despite the tiny move from open to close, there were wide swings in between. That’s what made the difference. “When the market opened yesterday,” says Jonas, “it moved down dramatically, but buyers stepped in to bid shares up over the course of the session.”
The combination of those movements generated the bounce off trendline support he was looking for — exactly as it’s played out five previous times over the last year.
“Every time the S&P has touched that blue line, you would have made a lot of money by clicking “buy” — even though most people would have scared to death to do so, fearing the big drop would continue.
Voila: The market is solidly in the green this morning. Every major index is up 1% or even more. The S&P has put 1,750 comfortably in the rearview. At last check, it was 1,769.
Jonas figures the market might reach new all-time highs in the first half of March — a perfect environment to lay on new trades using his predictive analysis. For full access to his recommendations, look here.
First-time unemployment claims rang in lower than expected this morning — 331,000 last week, according to the Labor Department.
It’s not an awful number, and combined with the not-awful private payrolls number from ADP, the safe bet is for a not-awful number when the Labor Department issues its January jobs report tomorrow.
Not awful would be better than the December report…
Gold keeps holding the line on $1,250. At last check, the bid was $1,257. Silver is only 7 cents away from $20.
“Uncle Sam will soon demand his cut of the money you made in 2013,” says Neil George, with an unwelcome reminder.
As our income specialist, he’s been fielding tax questions from readers lately. “You should make sure you’re taking maximum advantage of your tax benefits.
“The rule of thumb is that investments that are taxed-advantaged, such as muni bonds, and pass-throughs, such as MLPs, REITs and LLCs, should be in taxable accounts. And investments that pay a larger amount of ordinary income that’s fully taxable, or stocks that you don’t expect to own for more than a year, should ideally be put into a tax-free account.”
The portfolio page of Lifetime Income Report helpfully breaks down which are which.
Meanwhile, keep an eye out for a form from your broker in the coming weeks. “Your dividend income will be broken into two boxes,” says Neil — “qualified and ordinary dividends.
“Qualified dividends typically come from regular public corporations like IBM and Exxon Mobil. These are taxed at a 15% rate — meaning they can also work well in a taxable account.
“Ordinary dividends come from tax-advantaged companies such as pass-throughs, including REITs, partnerships and LLCs as well as nonmuni bonds. These are taxed at the normal income rate.” Look for correspondence from them that tells you how much of the income you received (usually listed as “return of capital”) is taxable — if any is taxable at all.
For a more in-depth examination of Neil’s favorite IRS-beating strategies, check this out. You just might thank him by the time April 15, 2015 rolls around…
As if there weren’t enough drama building up to the Winter Olympics, there’s now the supposed ban of iPhones.
From SlashGear: “Olympics sponsor Samsung is reportedly dropping Galaxy Note 3 smartphones in athletes’ goodie-bags, though the gift comes with a catch: a supposed ban on any other device branding, iPhone or otherwise, during the opening ceremony.”
There’s that weasel word “reportedly” — the crutch of every reporter too lazy to track down a story for himself.
In this case, the story originated with Swiss media, citing Swiss athletes…
To its credit, Fast Company tried to confirm the story with Samsung and the International Olympics Committee.
“Samsung,” said an email from the firm, “has not been involved in any decisions related to branding on products used by athletes to the Games. All commercial marketing around the Games is overseen by the International Olympic Committee (IOC).”
Over to you, IOC: “No, it is not true. Athletes can use any device they wish during the Opening Ceremony. The normal rules apply just as per previous Games.”
Really, imagine the spectacle if the logo police slapped an iPhone out of the hand of an athlete on worldwide TV tomorrow night…
“I get really annoyed with you guys talking about U.S. default,” an aggrieved reader writes, “for what you leave out. To wit, you never mention the $15 trillion that the Fed sent to EU banksters between 2008-2010, ostensibly to bail them out of their positions in our housing bubble.
“Unfortunately, that $15 trillion wasn’t approved by Congress, and I find it remarkably coincidental to the amount we’re said to owe.
“The amount expropriated was also confirmed on Ron Paul’s website when he reported a soft audit of the Fed. But a full audit has never been done, probably for the obscene profit it would reveal, between the face value and the cost of paper and ink the Fed pays for
currency in all denominations; and to add insult to rape, the 3% they charge US for
‘managing’ our economy, or interest earned, to which they must pay some taxes.
“Anyway, my point is should our country believe an invoice served up by central bankers without an audited statement? I mean otherwise, it’s just a bunch of globalist wannabe profiteers hoping to sell a rumor.”
The 5: This won’t make you feel any better: That’s a different $15 trillion you’re talking about — although some of it was surely paid back. (How much? Guess we’ll need another soft audit.)
But the $17.3 trillion national debt? That’s on Congress and the president, past and present…
“The helicopter beer delivery scheme has deep Minnesota roots,” writes a reader who adds, “I have no stake in this, but at least partial credit should be given where it is due.”
“The idea for the beer brand was conceived by a Minnesota ad agency (Pocket Hercules), with a Minnesota-based fishing lure distributor (Normark is the sole United States distributor of Rapala products and operates synonymously with Rapala’s brand name in the U.S.) and a Minnesota-based brewer (Schells).
“The name of the beer comes from a Minnesota sculpture. ‘Part of our inspiration comes from the Rainy Lake lakemaid, a freshwater mermaid sculpture dating back to 1932, which sits on a rock in the middle of beautiful Rainy Lake on the Minnesota-Canada border,’ [according to the ad agency].”
Just in case you thought the reader was making it up…
“The ice fishing beer delivery idea was tested on Lake Waconia, a suburban lake near Minneapolis. The key target market was Lake Mille Lacs, a Minnesota lake where the population of ice fishing shanties exceeds 3,000 every winter and superhighways are plowed and maintained on the lake each winter… It has to be seen to be appreciated.
“The beer may be brewed in Wisconsin, but we Vikings and Gopher fans have a fierce hometown pride, especially when locally due credit is bestowed on a Badger-Packer.”
The 5: Never let it be said your Packer-fan editor doesn’t give everyone a fair shake…
Cheers,
Dave Gonigam
The 5 Min. Forecast
P.S. A handful of spots remain in our most exclusive and priciest service. If you’re looking for an aggressive catch-up plan to help “make your number” and meet your retirement goals, there’s no better place to start than here.