- One weird trick to make money on the first day of the month
- Six months after Stockman’s bold forecast (which was right)…
- … he sticks his neck even further out: Can Trump make it to 2020?
- One brick-and-mortar chain thrives amid the retail carnage
- How to resist the TSA’s latest arbitrary act of “security theater”… readers getting impatient for America Uncensored… online retail breaks the “apparel barrier”… and more!
Welcome to the first day of the month… which may or may not be a clockwork opportunity for big gains.
For Wall Street, “It’s probably the most important trading day of the month, as inflows come in from 401(k) plans, IRAs, etc., and mutual funds have to go out there and put this new money into stocks,” explains our newest contributor, James Altucher.
James picked up this tidbit during a stint in the early 2000s as a trader for Victor Niederhoffer. “Victor,” he tells us, “was a top trader for George Soros before starting his own fund in the ’90s and then writing the classic investment text The Education of a Speculator.”
The trading James did for Niederhoffer generated slightly over 100% gains in the space of a year. And he learned a lot along the way. “Victor has consistently traded his own portfolio quite successfully and is one of the best traders I’ve seen in action.”
Back to the significance of the first day of the month: “Over the past 16 years,” says James, “buying the close on SPY (the S&P 500 ETF) on the last day of the month and selling one day later would result in a successful trade 63% of the time, with an average return of 0.37%.”
If you tried the same thing on a random day over that 16-year period, you’d have only a 50-50 shot at a successful trade… and your average return would be a piddly 0.03%.
So we’re not talking chump change. What’s more, “various conditions take place that improve this result significantly,” James say. “For instance, one time I was visiting Victor’s office on the first day of a month and one of his traders showed me a system and said, ‘If you show this to anyone, we will have to kill you.’
“Basically, the system was: If the last half of the last day of the month was negative and the first half of the first day of the month was negative,buy at 11 a.m. and hold for the rest of the day. ‘This is an ATM,’ the trader told me.”
Alas, SPY rose yesterday afternoon and is rising again this morning, so at least for this month, the ATM is out of service.
[Ed. note: James is a wildly successful trader… but you don’t have to have your eyes glued to a screen all day to make big money. Not long ago, he made a single investment of $2,000… that nine months later turned into $10 million of pure profit.
Now he’s ready to show you how you could apply that same strategy to make 10 times your money between now and the end of the year.
James reveals all one week from today during a special live event exclusively for Agora Financial readers like you. It’s Thursday, June 8, at 1:00 p.m. EDT. We urge you to clear your schedule for this unprecedented opportunity. Typically, he charges $525 for access to an event like this… but because he’s joining forces with us, you can look in for FREE. All we ask is that you drop us your email address to reserve your spot. Here’s the place to sign up.
Oh, and don’t miss today’s Overtime briefing, below. We’ll be sharing James’ “ultimate cheat sheet” for investing all of your money over the next few days.]
Today also marks six months since David Stockman went on record in The 5 with an outside-the-box forecast: Trump’s economic agenda would never see the light of day.
“Washington will be paralyzed for months — even years — after the inauguration,” he said here on Dec. 1, 2016.
“There will be no massive tax cut, no huge infrastructure initiative or any other variation of the ‘fiscal stimulus’ will-o’-the-wisp that seems to have sent the bond markets reeling and the stock averages to giddy flights of fantasy.”
David knew that come March 15, the national debt ceiling was set to come back into force. That one event, he projected, would take a wrecking ball to Trump’s grand plans. Sooner or later, David says that reality will dawn on Wall Street… and send the stock market tumbling.
Last week, the president’s advisers urged Congress to raise the debt ceiling by the end of July, lest they risk a default on U.S. Treasury debt.
Reports Politico: “The GOP is currently embroiled in an effort to repeal Obamacare and rewrite the tax code, two massive legislative items that are expected to suck up time and energy all summer. And now, they’ve been caught flatfooted by last week’s pleas from White House budget director Mick Mulvaney and Treasury Secretary Steven Mnuchin.”
Six months after David’s initial forecast, he says the stakes are far higher: Trump, he forecasts now, might well be chased from the White House before the 2018 midterm elections, “probably via a threatened invocation of the 25th Amendment by the GOP elders on Capitol Hill…
“The Donald is exceedingly vulnerable,” says David, “because he is an insurgent outsider who will eventually end up alone in the Swamp in helpless isolation. At length, the hammer of fiscal crisis and a crashing stock market will break the tepid loyalty of the GOP elders as they smell the 2018 elections turning into a replay of the rout of 1974.”
Ah, 1974. David was a young pup in Washington, D.C., during the Watergate era. He points out Nixon was an insider and couldn’t survive: “Notwithstanding three decades of network building and the accumulation of vast IOUs from his relentless politicking and campaigning, for example, the GOP establishment sent Nixon packing in August 1974 when the party’s demise stood just around the corner.
“By contrast, The Donald has no GOP network, friends, IOUs or even history. A mere 12 years ago, he was cavorting with the Clintons at his and Melania’s wedding.
“When the S&P 500 drops below 1,500 there will be panic in the GOP precincts all around Capitol Hill. Then they will deputize their Al Haig to show Trump the way to the helicopter pad.”
But that’s next year. This morning the S&P is again flirting with record territory at 2,417.
Gold made a run past $1,270 overnight but has since retreated to $1,265 as the dollar has firmed.
It being the first of the month, the ISM manufacturing index is out: The May number is 54.9, up just a tad from April. That’s eight straight months of over-50 readings, indicating a growing factory sector.
Again we caution that the ISM is a survey — “soft data.” For much of this year the soft economic data’s been looking better than hard data like sales. The divergence can’t last…
It’s the best of times in retail… for downmarket Dollar General.
DG delivered its quarterly numbers this morning — beating analyst estimates on both earnings and revenue. Shares are up nearly 5% as we write.
But it’s still the worst of times in retail… for the mall operators.
A new report from Credit Suisse says up to 25% of the nation’s malls will shutter within the next five years, thanks to “the Amazon effect.”
This year alone, the report projects 8,640 store closings nationwide — which would crush the previous record of about 6,200 in 2008.
And other analysts say Credit Suisse is lowballing that 25% number. “It’s more in the 30% range,” Ron Friedman from the accounting and advisory firm Marcum tells the Los Angeles Times. “There are a lot of malls that know they’re in big trouble.”
God help us, it’s already time for another 5 business travel alert — the second this week.
As we indicated on Tuesday, the TSA is concerned about people overstuffing their carry-ons — which apparently makes it harder for the X-ray machines to see through everything. So now at several airports, travelers are being asked to take out books and food along with their laptops.
Travelers encountering it for the first time are not amused at this latest checkpoint outrage: “It’s always been a series of insults,” Julie Sze tells The Sacramento Bee. “Books, magazines, food, those are like my three treasured things. It feels personal on a whole different level.”
The Wall Street Journal indicates it’s a test program, limited so far to 10 airports… but I can attest to encountering the book thing at my small-town airport last November, and again last month. The Journal says exactly what they ask you to pull out “could change line by line, airport by airport.”
Yeah, that’ll deter them thar terrists!
Hmmm… Here’s a suggestion for next time you travel and you’re asked to show your books. Whip out a pocket Constitution. They’re 10 for $10 from the Cato Institute; hand ’em out to your friends and tell them to do likewise. Let’s start a thing…
To the mailbag: “You introduced America Uncensored a while ago and mentioned it again yesterday, and I have not yet seen it in my inbox! When?”
The 5: As we said back in April, there’s a weird science to the launch of an e-letter. I don’t understand the process, but people who do tell me you just can’t bring on an existing readership base all at once.
This morning I asked those people how long it’ll be before The 5’s entire readership is getting America Uncensored. They told me by the end of July.
Yes, we know that’s two more months. So over the next few days we’ll pull together a signup page and link to it here in The 5 if you don’t want to wait for our “onboarding” process to pull you in. Watch this space…
“I keep reading the stories about how the brick-and-mortar stores are in such bad shape saleswise,” a reader writes.
“I understand and participate in online shopping too. What I find amazing is that items such as shirts, pants and shoes would be a big seller online. Maybe I am the exception here. I can try on two different pairs of shoes of differing styles from the same manufacturer and need a different size. The same thing for pants.
“I would never purchase clothing without trying it on first. Until the very last store closes, I will remain a retail store purchaser.”
The 5: Times change. A month ago we mentioned how Amazon is set to surpass Macy’s this year as the biggest seller of clothing in America. And the research firm eMarketer says that measured as a percentage of total online sales, apparel and accessories will overtake computers and consumer electronics this year as the biggest e-commerce category.
And that’s just the beginning: The Credit Suisse report we mentioned earlier in today’s episode says apparel sales now represent 17% of all e-commerce… and that share will grow to 35% by 2030.
I too never thought I’d take the leap. But last fall I ordered a pair of running shoes online. That’s huge for me. I have a narrow foot, and in the past I’ve always tried two or three flavors of New Balance B widths before pulling the trigger. With a good price and free returns, I took the online leap of faith… and I couldn’t be happier with my purchase the first time around…
The 5 Min. Forecast
As promised, James Altucher will be joining us in this space over the next few episodes of The 5 with his “ultimate cheat sheet” for investing all your money. What follows was valid when he first wrote it in 2014, and it’s still valid now…
The Ultimate Cheat Sheet For Investing All of Your Money
In the history of capitalism, this is the hardest time ever to invest. People are going broke, losing their jobs, and fear more than greed rules the news and tries to rule thoughts.
In short: people are scared. And I do think the uncertainty is going to rise quickly so I wanted to put this note together.
In 2001 and 2002 I lost all my money through bad investing. The same thing happened to me on a couple of occasions after that.
So why should anyone listen to me about investing? You shouldn’t. You shouldn’t listen to anyone at all about investing. This is your hard-earned money. Don’t blow it by listening to an idiot like me.
The most important three words in investing is: “I don’t know.” If someone doesn’t say that to you then they are lying.
I was preparing this morning for my podcast conversation I am having tomorrow with Stephen Dubner, co-author of Freakonomics and the upcoming “Think Like a Freak.” One of the statistics he points out is that CXO Advisory Group polled the predictions of 500 investment strategists and pundits. The “experts” had a 47% success rate. Good luck if you listen to any of them.
Here’s my experience (and perhaps I’ve learned the hard way about what NOT to do and a little bit about what TO do.):
I’ve run a hedge fund that was successful. I ran a fund of hedge funds, which means I’ve probably analyzed the track records and strategies of about 1000 different hedge funds.
I’ve learned one major thing, which I will repeat below: all of Wall Street is a scam.
I’ve been a venture capitalist and a successful angel investor (I was a horrible venture capitalist though – but I put that under the category of “does not work well with others”).
I can’t raise money anymore. Nor do I want to play that game. I don’t BS about my losses and everyone else does.
So I’m not in that business anymore. It’s too much work to run a fund anyway.
In the past 15 years I’ve tried every investing strategy out there. I honestly can’t think of a strategy I haven’t experimented with.
I’ve also wrote software to trade the markets automatically and I did very well with that but that industry is now dominated by the high frequency guys.
And I’ve written several books on my experiences investing, with topics ranging from automatic investing to Warren Buffett, to hedge funds, to long-term investing (my worse-selling book, “The Forever Portfolio,” which has sold 399 copies since it came out in December 2008, including one copy for the entire last quarter).
Incidentally, why publish a book called “The Forever Portfolio” during the worst financial crisis in history. I begged my publisher (Penguin) to postpone but they couldn’t. “It’s in the schedule” was their magic incantation. Publishers largely suck. The good news is: they will never make back the advance.
That said, all of the picks in that book have done excellently since then (Claudia proved this in a review of the book on Amazon but then was shamed into admitting she was my wife, which she did not at first disclose) but the one thing I am proud of is that I made a crossword puzzle for the book. I don’t know of any other investing book with a crossword puzzle in it.
So, Ok! We’ll get started tomorrow. Don’t follow any of my advice. This is advice that I do and follow and it works for me.
for The 5 Min. Forecast
Ed. note: We promise James will not pull out a crossword puzzle when he hosts his first-ever live online event for Agora Financial readers one week from today.
Actually, no. We can’t promise that. As you might be starting to understand, James can be a little unpredictable.
But we absolutely do promise that he’ll unveil a road map to making 10 times your money between now and the end of 2017. He calls it “the 1,000% backdoor secret.”
It’s next Thursday, June 8, at 1:00 p.m. EDT. It won’t cost you a thing to watch this live webinar. But we do have to limit access, just to make sure we don’t crash our servers. Just RSVP at this link and we’ll save you a spot.