- A rogues’ gallery of the penny-stock world…
- … or as Tim Sykes would rather call them, scumbags
- Shutdown? What shutdown?
- Dollar at 3-year lows — great for multinational stocks!
- Trump’s top China hand getting pushed out?
- Jeff Sessions’ 11-dimensional chess… the legislative and the executive… a crypto skeptic speaks up… and more!
“Remember, a lot of these guys are slimy, good-for-nothing scumbags who don’t care about ripping off gullible amateur investors.”
See, that’s the good thing about having — uhhh — forget you money. You can call things by their proper names and damn the consequences.
Tim Sykes certainly has that kind of money. We introduced you to him last week as the newest marquee contributor at Agora Financial. Tim took $12,415 in bar mitzvah gifts and parlayed it into a $2 million fortune by the time he graduated from college. He did it by day trading — at a time in the early 2000s when the dot-com bubble was bursting and “day trading” had become a dirty word. By now, he’s generated more than $4.7 million in trading profits.
So yes, he has no problem speaking freely about the “scumbags” who proliferate in the penny-stock world where he made his fortune.
But just who are these characters? How can you spot them? How exactly can they sabotage your success?
“You can profit,” says Tim, “by knowing who to watch and seeing what signals they’re throwing out.”
Begin with the penny-stock pickers. “These are services,” he says,” that promise huge gains and that usually focus specifically on penny stocks, due to their great volatility and lack of active information.
“They love picking stocks, saying things like, ‘Oh, buy this stock — it’s going to go up 500%.’
“Please. That’s a joke. The people that listen to that type of stuff deserve to lose their money.”
On the flip side, there are financial celebrities who don’t delve into the penny-stock world. “These well-known names focus on hard-core research, but they rarely pick penny stocks, because there’s a lack of fundamentals from penny stock companies.”
Remember what we said about penny stocks last week: They frequently have no revenue and no earnings. It’s all about hype — which you can harness to your advantage. But not these financial celebs: “There’s not much for them to do in this sector, since they tend to focus on bigger companies.”
Next are the media types.
Start with the print, TV and online advertisers. “These guys provide entertainment and basic market commentary,” says Tim, “but they’re actually legally prohibited from discussing penny stocks. This is such a great opportunity for us, because no one is talking about it. They can’t — it’s illegal for them to do so.”
On the other end of the spectrum are the penny-stock “newsletters” — which we put in quotation marks seeing as we’re in the newsletter biz ourselves. “These are marketing machines that distribute research paid for by penny stock companies or their shareholders,” Tim explains. “Penny stock newsletters have to disclose if they get paid at the bottom, but the reality is that there are very few — if any — that are actually without bias.”
As we point out from time to time, our prime revenue source is subscriber revenue from readers like you. A recommendation issued by any of our editors is the result of their own research, with no conflicts of interest.
Then there are the so-called “professionals.”
Wall Street analysts tend not to focus on penny stocks, but Tim still has scorn: “The vast majority of them like to talk a big game and write up huge research reports, but they’re actually wrong most of the time. And it’s kind of funny that they’re irrelevant to penny-stocking — they should be irrelevant to Wall Street all the time. But what can I say? I’m an idealist.”
Along with the analysts, Tim has little use for the economists. “These are the guys that analyze global and industry trends, which are, again, largely irrelevant to penny stocks. Let them analyze their trends. Let them charge $30,000 per report to these big companies that try to guesstimate trends. It doesn’t matter — it’s not going to help you make money.”
So now you know who not to listen to if you want to make as much as $20,072 a week from penny stocks — and do it every week.
If you do want to learn how to pull down sums like that, we’re less than 48 hours away from America’s First Penny Stock Summit — a unique online event set for Wednesday at 1:00 p.m. EST. Advance registration is required, but the event itself is free. And just for showing up, you have the chance to win… well, we don’t want to say too much about it now, but it’s worth $70,000.
We encourage you to rearrange your schedule to watch it all unfold. The free registration link is right here.
The “partial government shutdown” is practically over before it began. Boo, hiss.
As we write, Senate Democrats have signed on to another kick-the-can agreement that will keep the doors open for another 2½ weeks. The new drop-dead date would be Feb. 8. Conceivably, the federal agencies that are closed for business today will reopen tomorrow.
The major U.S. stock indexes were already reaching higher before the news broke, but now the Nasdaq is up nearly three-quarters of a percent and only 14 points away from 7,400. The S&P 500 is racing further above 2,800, and the Dow is holding the line on 26,100.
Gold is holding its own at $1,331. Ditto for crude at $63.20. Bitcoin was all over the map in weekend trade, but at last check it’s back below $11,000.
No big economic numbers today, but the Chicago Fed did issue its “National Activity Index” that crunches 85 indicators into one big picture. We check it out because it has an uncanny history of calling recessions anytime the three-month average clocks in at minus 0.7. No recession risk now, however — it’s at plus 0.42, the highest in three years. That said, the numbers show weakness in manufacturing, employment and housing.
The dollar, meanwhile, has spent the last week hugging lows last seen three years ago.
To be clear, by “the dollar” we mean the U.S. dollar index — a rather flawed figure that measures the greenback against six other developed-country currencies. No “BRIC” countries, even though Brazil, Russia India and China all rank among the globe’s top 10 economies. In fact, 57% of the index is just the euro!
But it’s the most common yardstick finance pros use when talking about “the dollar,” so it’s what we go with…
Key point: Dollar weakness is very good for America’s giant multinational corporations.
“Blue chip companies based in the U.S. with sales all around the world have an advantage right now,” explains our income maven Zach Scheidt.
“That’s because the weak U.S. dollar makes it easier for companies to sell their products overseas for cheaper prices. You see, a weak U.S. dollar naturally corresponds to stronger other currencies. And if international currencies are stronger, it means consumers overseas can more easily afford the products sold by U.S. companies.
“It also helps that when corporations generate profits in euros, yen or British pounds, those profits get reported to investors in dollar terms. And again, profits generated in euros naturally translate to more ‘weak’ U.S. dollars.
“So a weak U.S. dollar provides a tail wind for big international companies based in the U.S.”
The beneficiaries include some of Zach’s income favorites like Apple (AAPL) and Procter & Gamble (PG).
The start of the new U.S.-China trade war might have to wait for some White House theater to play itself out.
When we left you on Friday, we’d mentioned that today is the day Commerce Secretary Wilbur Ross is set to recommend new tariffs on Chinese steel, and it might prove to be the first shot in a series of trade battles this year.
But yesterday, the political website Axios put out a hit piece on Ross — one that almost appears to have been leaked by the president himself, “Wilbur has lost his step,” he supposedly said. “Actually, he’s probably lost a lot of steps.”
From the article: “One problem: Ross’s efforts to wheel and deal with the Chinese have left the president unimpressed. Another problem: He keeps falling asleep in meetings.”
And now all of D.C. is piling on, per this reporter at Politico:
Heh… If true, it throws several buckets of cold water on the Newsmax report we mentioned Friday — the one about how Ross was in line to replace “Goldman” Gary Cohn as director of the White House National Economic Council.
Ugh — feels seamy to be dragged into the D.C. soap opera like this. We’re sorry we brought it up in the first place…
“Jeff Sessions knows exactly what he is doing,” a reader comments after Friday’s episode.
“The so-called crackdown is just a kick in CONgress’ butt to get them moving toward national pot legalization, and it looks like it’s working. Nothing else makes much sense.
“Love The 5.”
The 5: We’re suspicious of any theorizing about Washington that portrays someone’s policy statement as a brilliant move in some game of 11-dimensional chess. These are government officials we’re talking about. And Sessions’ hostility toward the wacky weed is the stuff of legend.
But yes, the outcome might well turn out to be the same — nationwide decriminalization, if not outright legalization.
“Boy, I did enjoy Friday’s cannabis issue, but your quoted congressman really should read the Constitution at some point,” writes another reader.
“The job of the attorney general is to enforce the federal laws of the United States. The job of Congress is to pass and create the laws of the United States. If the attorney general doesn’t do his job, theoretically he could be arrested. The attorney general can lower the priority of the laws enforced, although he really should not ignore the laws that Congress passes.
“Then again, our last director of the FBI seemed to think that if you didn’t know you were breaking the law, it was fine. Somehow, I think that defense wouldn’t work for either of us.”
On the subject of bitcoin and the blockchain, a reader takes issue with something James Altucher said here on Thursday…
Said James: “And ALL of logistics will be replaced by bitcoin, e.g., UPS is replacing all of their internal logistics (tracking millions of packages every day going from millions of locations to millions of other locations) with bitcoin technology.”
Counters our reader: “The disparity I see in statements like this is that, as I understand it, logistics and contracts will certainly use blockchain technology, but not the same blockchain as bitcoin. Anyone can start a blockchain, as is evidenced with all the crypto this-and-that that has popped up everywhere. That does not imply that there will be any value added to bitcoin or any other cryptocurrency.
“I am sure there will be a UPS blockchain, a FedEx blockchain and a LegalZoom blockchain, and pretty much every other mega-corporation will see intrinsic savings in record keeping in this fashion. Will there be any monetary value to these to the investor? I’m not so sure.
“I still see the biggest threat to blockchain as a currency coming from government. The central banks will not give up their stranglehold on money. If they can’t corner the market themselves, they will have their cronies in Washington legislate it out of existence. (South Korea much?)”
The 5: So far, government crackdowns have merely been a way to scare the “weak hands” out of crypto. China cracked down in September and bitcoin collapsed from $4,700 to $3,000 in two weeks. Someone who bought at that September top is still up more than 100% today. Just sayin’…
Best regards,
Dave Gonigam
The 5 Min. Forecast
P.S. Did you know James Altucher isn’t only about crypto?
It’s true, that’s the territory he’s staked out here in The 5 in recent months. But he knows a thing or two about other asset classes. In fact, he recently performed a stunning demonstration you won’t want to miss. Check it out right here.
