"Kip's VRA financial newsletter is a MUST read for every saavy investor in this country. Disregard it at your own peril. His mantra is my mantra: Buy Gold and China. Sell short on pretty much everything else. Kip Herriage's newsletter is my financial Bible."

--Wayne Allyn Root
2008 Libertarian Vice Presidential candidate
Author, "The Conscience of a Libertarian"

Twitter: @kherriage

Karl Bessey

Mary Dee

Mike Budny 
Twitter: @kherriage

Wednesday
Nov222017

VRA Market Update: Happy Thanksgiving. Exciting Year End. BIG Breakout in Oil. Dow Jones 35,000. Silver and Gold. Housing Market

Good Wednesday Afternoon all. I'd like to wish everyone in the US a very happy Thanksgiving. Markets are closed tomorrow and open for just a 1/2 day on Friday. Yours truly will be back with you first thing Friday morning (at the latest).

VRA Market Update: First, the fundamentals.

As you know, I am hyper-bullish on both the economy (US and global) and the stock market. My LT target for the Dow Jones is 35,000. Of course no one knows for sure...but as I've written for a very long time, until a euphoria filled move higher takes place that gets everyone uber bullish, we will not see a market top.

Watching Bloomberg this morning I found the rare Wall Street portfolio manager that agrees with me.
 
Here's my tweet and link to the video: https://twitter.com/KHerriage/status/933305105662840832



He makes an excellent point. I see FAR too many that continue to fear monger investors that stocks are overvalued. They are not. By my estimates, today the DJ should be trading at 28,000...we're headed there at a minimum...likely far faster than most believe could take place. This is the beginning of the melt-up.

OIL IS FLYING

This morning, the breakout in oil is continuing, with near $58/barrel prices, levels not seen in more than 2.5 years. Take a look at this beautiful chart.

Once we broke through $56, there was little doubt that the next big move would be higher. Again, "volume precedes price movement"...see the massive volume increase in oil over the last year? This chart looks similar to what we're seeing in every major industrial metal...long term, large volume moves higher. This tells us that the smart money is coming in hard and that this move will be more than just a minor breakout higher. BTW, we also see very similar looking charts in gold and silver...as I'll show you next.


Silver

Here's the 2 year chart of silver I referenced. Again, check out the explosion in volume. Combined with the fundamental story of a big global economic recovery (silver is as much an industrial metal as it is a precious metal), plus the fact that inflation will be one of the biggest macro themes going forward, precious metals must be owned. Of course this is even more bullish for the miners. Watch what's about to happen with this sector...coming out of the FED rate hike...we've seen moves of 10% to 127% in GDX (mining ETF) over the last 4 rate hikes. We're going to make SILLY money here....and we're certainly due. Patience will soon be rewarded. 


GOLD

Gold is being bounced around like its on a pinball machine. Watching the day to day drip. drip drip in gold/silver/miners, with continued price suppression schemes of the manipulators has reached absurdity, as you'll see in an article from GATA in just a moment. 

First, take a look at this LT 4 year chart of gold.The 200 day moving average sits at $1265/oz, meaning that gold is just $10/oz above. Still, everything about the chart below says that it must be owned here...same with silver...and of course the miners. 

For one, check out the huge volume increase in just the past year. My mentors taught me that "volume precedes price movement" and based on this single fact alone, the next major move in gold should be higher...much higher. 


The FED is set to raise rates again in December. It's my continued belief that while precious metals may be "soft" heading into the rate hike, just as we've seen with the last 4 rate hikes, once it is completed we can expect a big spike higher. Yes, that means we have a couple of weeks to sweat it out...not much we can do about that... gold, silver and the miners will rally hard into year end then into 2018. Inflation is back...we see it everywhere we look...inflation is golds best friend. 

The article below, from GATA (gold anti-trust action committee) spells out the atrocity that is the price suppression scheme of central banks and their favorite global mega banks. 
This quote sums it up best...92-1 ratio of paper gold to physical gold. This is the criminal amount of dilution that we are hit with daily....

Zero Hedge writes: "According to the Reserve Bank of India's estimate, the ratio of 'paper gold' trading to physical gold trading is 92 to 1, meaning that the price of gold on the screens has almost nothing to do with the buying and selling of physical gold.

Dear Friend of GATA and Gold:

 Zero Hedge called attention to Friday's column by Gillian Tett of the Financial Times, to which GATA also had called attention --


in which Tett speculated, as many in the gold sector have done, that the futures market being planned in bitcoin by CME Group would tend to suppress the cryptocurrency's price. 

Of course the use of futures markets to suppress gold and commodity prices has been one of GATA's themes for a long time, and a theme of the British economist Peter Warburton for even longer:

So Zero Hedge concluded its post by suggesting that Tett now pursue the gold price suppression angle, noting that GATA has been urging just that on the FT for quite a while. 

"This makes the gold market and, therefore, the gold price something of a mockery." As Zero Hedge has highlighted time after time, the gold price has frequently been subject to waterfall declines, as huge volumes of gold futures are dumped on the market with no regard for price. ...

"Perhaps the FT journalist, Gillian Tett, could write an article on gold, instead of bitcoin, explaining how the price of the former -- a widely viewed indicator of financial risk -- is being suppressed by derivative trading. Indeed, Tett was present at a private dinner in Scott's of Mayfair several years ago when the Gold Anti-Trust Action Committee gave a presentation on exactly the same process she expects to lower the bitcoin price."
Zero Hedge's commentary is headlined "Financial Times: Sell Bitcoin Because the Market Is about to Become 'Civilized'" and it's posted here:


Housing Market Rally 

As you know, I'm "all-in" on the Trump bull market and ongoing US economic recovery. That's no secret to anyone that's been reading the VRA, since the election. 
 
From a quick return to 3% GDP to the remarkable recovery in consumer confidence and spending, one thing is crystal clear; this economic recovery (both in the US and globally) has at least 2-3 years to run. The good news for us, as we witnessed again this past week, is that investors continue to be more bearish than bullish (as we saw in the AAII Investor Sentiment Survey). As a contrarian, bearish investor sentiment is exactly what we want to see. Bearish sentiment confirms for us that we are nowhere near the highs for this bull market. Those highs will come when the AAII survey is 60% + bullish...and for weeks/months on end. Those highs will come when everyone is adamantly bullish and (like me) and predicting Dow Jones 35,000 by 2020. 
 
And of course one of the biggest reasons to be bullish today...seasonality. 90% + of all market gains come during the November to May time frames. 
 
But for those looking for clear proof that the US economic recovery is not only real but still in its infancy, the chart below should provide that proof.
 
Below is a 15 year chart of HGX, or the US Housing Index. 
 
In 2005, housing topped out. In 2006, housing began to plummet. It was at this time that the VRA began to recommend caution on both the economy and in stocks. I may have been about 6 months early, but I know that my warnings helped many to either sell their real estate or simply put off buying more of it. 



In 2008, the crash was on. And what a crash it was. Most Americans are still digging out from the Great Financial Crisis. At least that was the official title our financial charlatans assigned to it. As always, we should ignore what these wrong-way PHD economists tell us....because here's the hard core truth; the US was actually in a "Depression" for 4 years. That's right...we actually went through an economic depression.
 
With GDP barely averaging 1% during this time frame, when you remove the 1.4% in GDP that the income for government workers provides for the US economy, from 2009-2013, the US was actually in a tough depression.
 
This is why, in early 2013, the VRA went from LT bearish on the stock market to LT bullish...and I've remained LT bullish ever since.   
 
Now, take one final glance back above at the HGX chart. That blue circle tell us where we are today....fresh all-time highs. And here's what matters most; when markets break out to new all-time highs, that breakout actually marks "the beginning" of the move higher...rather than "the end" of the current move. I can find no example of fresh 10 year highs in any market that then signaled reversal, once those new all-time highs have been reached. Not a single example. 
 
Barring a black swan event, a ramping housing market, along with US income tax receipts at record highs and the bullish combination of sentiment and seasonality, we have no choice but to remain fully invested. We also have no choice but to be highly bullish on prospects for the US economy.  

It's for these many reasons that I can now predict an end to the long term destruction in US retailers. As my son and research assistant Tyler reminded me this week, "Amazon is not the only company that's learned to use the internet to grow their business. The weak hands have already been driven out of business...today, only the strong have continued to survive". 
 
Now, take a look at this 2 year chart of XRT (Retailer ETF). First, XRT remains 13.5% below its 2016 highs...in this kind of powerful bull market its hard to find any sector that's down this much from its highs. As a contrarian, we love this disparity.  



For all of the myriad of reasons I've written about, I expect this highly bullish seasonal period (November-May) to produce the next ramp higher in the broad markets. Last week the bears had their chance to take the markets lower with back to back intraday DJ losses of 150 points. But the bears look to have failed, as the markets came roaring back mid-week (outside of a Friday -100 point day). 
 
For the DJ to reach my 25,000 target by year end we'll need to see a 6.8% move higher to close the year out. Admittedly, that's one heckuva Santa Claus rally, but whether or not we reach 25k by year end, I remain highly confident (based on VRA System readings) that a sharp move higher is directly in front of us. 

US markets look near-perfectly poised to have a strong close to this holiday shortened Thanksgiving week and then begin their next spike higher to fresh all-time highs into end of year. Based on the VRA System, we MUST stay fully invested in the market.

Finally, I'm looking for a vey solid close to trading this week, and a continuation of a big move higher into year end. We are positioned well. The best value that I see today resides in energy, precious metals/miners, biotech and the retailers. Until the facts change, this is how we'll continue to stay fully invested. 

Until next time, thanks again for reading....have a very Happy Thanksgiving! 

Kip 

 

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Friday
Nov172017

VRA Update: 25,000 Year End Dow Jones. The VRA Approach to Crushing the Market, Sentiment Back to Heavily Bullish Readings.

Nov 17, 2017

Good Friday Morning all. A big recovery day in the markets yesterday, with 1% to 1.5% moves higher across the board in the Dow Jones, S&P 500, Nasdaq and Russell 2000.

As we’ve covered here often, in powerful equity bull markets like the one we are in today (globally) corrections are short-lived, quickly reversed and soon thereafter lead to fresh all-time highs. This is what we witnessed the beginning of yesterday. Take a look at these internals:

1) 4–1 across the board, advances to declines

2) Almost 10–1 new highs to new lows

3) Nasdaq at close to 10–1, up volume to down volume

The internals of the stock market make up an important element of the VRA Investing System. Even during the “pause” the markets internals held up well. Were this to be a large decline in the offing, the internals would have been negative, over a 7–14 day cycle. We did not get a whiff of this…instead, we saw a near immediate reversal move on heavy volumes.

Combined with the manner in which investor sentiment flipped from bullish to bearish over the course of just one week…along with record numbers of investors buying the VIX (fear index)…the VRA System signal was clear; the pause was to be short-lived only. Next up, the year end rally is ON. My DJ target of 25,000 by end of 2017 remains intact.

The VRA Approach to Crushing the Market

Going back to inception of the VRA in 2003, each year we have outperformed the markets (using the S&P 500 and Russell 2000 as benchmarks) in 13 of 14 years. Through the 3rd quarter of 2017, our positions were up an average of 44%, versus just 11% for the S&P 500 and 9% for the Russell 2000.

Going back these 14 years we have had numerous VRA buy rec growth stocks that have risen 500–1000% while also using the VRA System to time our purchases of leveraged ETF’s and big cap domestic/international buy recs, giving us exposure to the broad markets as well.

The VRA has always been aggressive. It always will be. My investing style is not for everyone, for just this reason, but for those willing to invest a portion of your funds in high growth opportunities, well…this is my niche market. This is my USP (unique selling proposition).

I have always recommended building concentrated positions in my favorite holdings because this is how big gains in your portfolio take place. Peter Lynch, the best mutual fund portfolio manager in history (Fidelity Magellan Fund) averaged 28% returns over a multi-decade career. He did this by investing in growth stocks that he loved (great products with great mgt team) and then holding those positions until the story changed.

Remarkably, Lynch made money on just 6 out of 10 stocks he purchased, over the course of his career. 60% is Hall of Fame on steroids numbers for a baseball player but one might think that the best in the business could do better than a 60% success rate.

Here’s the key to his success; Lynch wrote often that the vast majority of the stocks he bought tended to produce small returns for an extended period (sometimes for years)…he used these pullbacks to add to his positions…because once his favorite stocks began to run, they REALLY took off. Lynch made his big killings in stocks that he owned for 3–4–5 years. By that time, he had accumulated big positions in his favorite companies. And his patience allowed him to crush the markets.

My approach with the VRA is similar to Lynch’s, but a big part of my work is timing the markets to ensure we are on the right side of both short and long term moves. Bottom line; I would rather not have to wait 3–4–5 years or more for my favorite investments to soar. And I really don’t want to lose money on 4 out of 10 holdings.

VRA Portfolio Holdings That Have the Potential to Jump 50–100% + With One “Event”

Having worked on Wall Street for 15 years, I know my personal investment psychology. Over the years my clients came to me because my own style matched theirs. I want to beat the markets, year in and year out, but what I really want to do is absolutely CRUSH the markets. I also know thats why many/most of you are here with me today.

In order to accomplish this, we must buy/hold growth stocks that have the potential to rise 50–100% + in very short order….namely on one “event”.

VRA Market Update

Below is a (rather large) screenshot of how various markets have performed through this past Friday. Dow Jones and S&P 500 up about the same (15% and 18%), while the Nasdaq has jumped a big 25% and the Russell 2000 (small caps) pulling up the rear, up just 8%.

The one that gets our attention of course is Bitcoin, up a huge 617%. While I’ve written positively about Bitcoin for years I have never officially recommended it…it does not trade as a stock, and while that’s similar to gold and silver in many ways…I have not yet found a method of investment that would allow me to include it in the VRA Portfolio.

But that should change in early 2018. I received word over the weekend that 2–3 IPO’s will be taking place that will allow us the opportunity to jump on the Bitcoin train, officially. As I learn more I’ll give you an advance heads up. Based on what I am hearing, a February launch looks likely. And no, based on the VRA System I would not recommend buying Bitcoin (or other crypto currencies at todays prices). A shakeout is taking place…we’ll wait until we have better timing…which looks to be a Google-like IPO of a crypto currency system…again, early to mid-February.

What we also see above is the fact that gold has risen some 10% in 2017. Take a quick look at the chart below. We see a most interesting pattern when it comes to December FED rate hikes.

The FED has raised rates twice in December, over the last 2 years. As you can see below, both rate hikes brought with them a huge move higher in gold (and an even larger move higher in the miners).

Following the 12/15 rate hike, gold spiked a big 31% over the next 7 months. Then, following the 12/16 rate hike, gold went on another tear, rising more than 20%in the following 8 months.

See the pattern here?

Next up, the FED will almost certainly raise rates at next months meeting. Should gold repeat its past two spikes, which brought an average gain of 25%, the next move in gold will take it from its current price of $1278/oz all the way to $1592/oz.

AAII Investor Sentiment Survey

The latest readings from the AAII Investor Sentiment Survey, my go-to sentiment survey for more than 25 years. As you can see, bullish percentage has collapsed back to 29.3%, a huge 15.8% drop in just a week, while bearish investors have surged to 35.2% with neutral investors at an also enormous 35.2%.

And folks, this massive jump in pessimism took place with just a small move lower in the markets. Stunning changes. Let me repeat…this is not how bull markets end…not even close. Bull markets end when bullish % is over 60% for weeks on end. Bull markets end when everyone and his/her mother is ALL IN…and are certain that stock prices will soar going forward. Just based on this reading alone, it is highly likely that this short term pause in the markets is close to ending.

We also got this update on the VIX this Wednesday. The VIX index is also referred to as the “fear index”….a gauge of investor optimism or pessimism. What we see below is that investors are buying the VIX more aggressively than at any point this year, which also means at any point EVER.

Never in the history of the VIX have investors been this bearish. As a contrarian you already know what this means….its almost certainly time to take the other side of this equation…the majority is very, very seldomly on the right side of any trade.

OIL Update

Take a look at this 3 year chart of oil. Besides the major bottom that you see below from 2/16, take a look at the explosion in trading volumes.

My mentors taught me that “volume precedes price movement” and nowhere can that be more clear than the surge in oil trading volume below.

Based on everything that I look at, from both fundamentals and technicals, the price of oil is in a multi-year bull market that might just send oil prices back to the $100 levels far faster than just about anyone is forecasting. We certainly have a Mid East war brewing…the sides have been drawn…Saudi Arabia vs Iran (with allies backing both sides that appear ready for a fight). We are positioned here perfectly.

Until next time, thanks again for reading…

Kip

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Wednesday
Nov082017

VRA Update: 1 Year Election Anniversary. Bull Market to Ramp Higher Into Year End. Precious Metals and Miners. 

Good Wednesday morning all. Today marks the 1 year anniversary of the election of #45, President Donald Trump. Love him or not, here are the bottom line investment results since 11/8/16.

S&P 500: +21%

Dow Jones: +28%

Nasdaq: +30%

During the last year we've seen an amazing 70 new all-time highs, as the country is reminded of what a pro-growth, business friendly economy is supposed to look like. We've also seen overly burdensome regulations slashed...allowing entrepreneurs to do what they do best...grow their businesses. 

Remarkable. 

But folks, "literally" everything that I see, using the VRA Investing System and my 32 years of experience, tells me that we are nowhere near the end of this bull market. You hear me talk about the following often, but quickly, here are the some of the most important markers. Indicators that I have followed closley since the 1980's:

1) Sentiment; yes...investors have become much more bullish (as you'd expect with this kind of a move higher), but the most important sentiment survey that I follow...the American Association of Individual Investors (AAII.com) that I've followed since the late 80's...shows bullish percentage still under 50%. While its beginning to elevate, yours truly will not become concerned about this market reaching dangerously overbought levels until bullish percentage reaches 60%...and for weeks on end. We're still nowhere near this.

2) Seasonality: in what may be the most important statistical investing fact that exists, over the last 50 years more than 90% of all stock market gains have occurred from November to May. 90%!

And yes, we are now in November. 

We barely had a single whiff of a sell-off during the historically volatile September/October risk filled months, telling us that NOW is when we must be positioned aggressively for higher stock prices. My year target of Dow Jones 25,000 remains intact. 

3) My mentors taught me, at the young age of about 24, that you can track markets by the success in the following areas: income tax receipts, health of the housing markets and health of financial stocks. We see all-time highs in all 3 areas today. Highly, highly bullish. 

Also, by following the Nasdaq (the best barometer for excitement in the markets), we get a great feel of what the future holds. This is where high tech, high growth mometmum stocks reside, which is why so many market timers key off of it. Remember, since the election, the Nasdaq is up a big 30%.

Final point on the markets and the economy: the stock market has always served as a discounting mechanism for the future. It tells us, roughly 6 months in advance, what we can expect economically going forward. Today, the stock market is clearly telling us that both the US and global economy will continue to surge. 

Don't fight the tape...another piece of age old investing wisdom.

In my book "CrashProof Prosperity, Becoming Wealthy in the Age of Trump" I laid out two investing scenarios. In one, I said that "if" we were going to have a bear market and sluggish economy, that it would come early on in Trumps first term (lots of historical precedence for this, during the first year of a new presidency). 

Clearly, that did not happen.

In my second scenario, I laid out the more likely probability that Trump would take the markets to all-time highs, based on economic growth that finally got back to the 4-5% GDP growth of years past. Remember, in not a single year of Obama's 8 years did US GDP hit 2%. Today, we're already back to 3%.

Imagine what Trump might be able to accomplish in years 2-3. 

I am "all-in". The DJ is headed to 30,000....possibly even 35,000...over the next 3 years. If that sounds unllikely or even impossible, consider this; a move to DJ 35,000 would mean that the market would need to average a 16% return over the next 3 years. 

The Dow just had a +28% year. Not impossible at all. 

Finally for this morning, a fresh chart of gold, which is up $9/oz this morning to $1285.

As you can see below, gold has been in a solid uptrend from its December 2016 lows. Everything about this chart says it is about to have a major breakout. Big volume builds confirm this. Once gold breaks $1375/oz, there will be no stopping it.  

Now is the time to make sure your positions are in place in my favorite miners (which move 3-5 x faster than gold/silver). 

Without question, the miners will be the biggest winners in the precious metals space. My target for gold in 2018 remains $2000/oz. Once we surpass $2000 gold, we'll see a Bitcoin-like move higher. Everything that Ive learned over my 3 decades confirms the bull market that's underway in gold, silver and the miners. 

Until next time, thanks again for reading...

Kip

Saturday
Oct072017

Insider Trading and Financial Anomalies Surrounding the Las Vegas Attack

 

Insider Trading and Financial Anomalies Surrounding the Las Vegas Attack
October 7, 2017
Note: With this report, I make no claim to specific knowledge of any wrongdoing or improprieties. Instead, this report includes trading patterns, news releases and/or public record SEC filings. 
We will examine the share price movements of two gun manufacturers (American Outdoor Brands and Sturm Ruger) and the share price movement of MGM (which owns Mandalay Bay). We will also examine additional financial events surrounding MGM, including what can only be referred to as massive levels of insider selling in the shares of MGM, by the CEO/Chairman and MGM officers/directors. As you'll see, more than $200 million in MGM shares were sold in the weeks leading up to the attack.
Background. Interesting Trading Patterns in AOBC, RGR and MGM.
Over the course of my 32 years in the investment industry I have constructed a proprietary investing model that I refer to as the “VRA Trading & Investing System”. In short, its design is to track money flows in the stock market and detect sector and stock analysis/movements that then alert me as to when/where money is flowing in the markets.
For example, prior to the 2016 Presidential Elections, the VRA System noticed that the share price of gun manufacturers had begun to decline rapidly. This was one of our first financial clues that Trump might beat Clinton (Trump's strong support of 2A). As you can see below, American Outdoor Brands (AOBC, formerly Smith & Wesson), hit a high of $31/share in August of 2016. As the bottom began to fall out, it would ultimately drop 55% in price, before hitting its low price of just over $13 on 9/11/17.
The market is referred to as a "discounting mechanism" and as such, it often predicts future events. It certainly did so in the case of the election and the share price of AOBC. 
We see the same trading pattern in gun manufacturer Sturm Ruger (RGR). RGR traded as high as $73 in March of 2016 before ultimately dropping 37%, when it too bottomed within one trading day of AOBC hitting it's lows (9/8/17). Again, my system noted the rapid decline in gun stocks, which led me to believe that Trump may in fact win the election. Remember this point; both AOBC and RGR hit their lows at the same time, just over two weeks prior to the Las Vegas shooting. 
Something Changed in September
Let's now examine the trading patterns of AOBC and RGR in detail, just over two weeks "prior" to the attack. As you can see, AOBC bottomed on 9/11/17 at $13.30 before the spike higher began. From 9/11 to just after the attack, AOBC rose 23% in price. It did so on a noticeable increase in buy-side trading volumes. 
Below, we see the same chart and reaction in the shares of Sturm Ruger (RGR). From it's 9/8/17 lows, RGR bottomed at $46.25 and then spiked to $55.90 just after the attack, for a move higher of 21%.
After falling in price from early-mid 2016 to their early September 2017 lows, the two largest publicly traded gun manufacturers bottomed, then spiked higher, at almost exactly the same time. In addition, buy-side volume increases rose sharply as well. 
And, while not covered in this report (more work is needed), we also saw a spike in call option purchases in both AOBC and RGR, in the days/weeks leading up to the attack.
This final chart shows the share price of MGM (owner of Mandalay Bay) in the days leading up to the attack to present. MGM shares declined more than 10%, from 9/7/17 to recent lows. This decline occurred as some $200 million in insider selling was taking place. 
Bottom line: Beginning in early-mid September to this report, gun manufactures AOBC and RGR rose in price 23% and 21% (on higher trading volumes), while the shares of MGM fell in price by 11% (as $200 million in insider selling occurred). 
MGM: Heavy Levels of Insider Selling
As the SEC insider transaction reports below detail, from 9/5/17 to 9/12/17, approximately 6 million shares of MGM were sold by officers and/or directors of the company, totaling approximately $200 million in proceeds to sellers. Included in this group is the selling of approximately 450,000 shares by MGM CEO and Chairman James Murren (a seller of size since late July) and who appears to have sold more than 85% of all holdings. We also see that MGM Board member Grounds William Warwick sold 176 million shares of his MGM stock on 9/6/17. 
We have no indication that MGM insiders sold these 6 million shares due to any advance knowledge of the 10/1 attack. I am not making that claim. I am simply pointing out facts that cannot be in question.
But I will make a few observations:
1) If MGM/Mandalay Bay were to lose law suits associated with this attack, the downside risks to MGM share price may be extensive. 
2) We also know that MGM CEO James Murren was appointed to the Homeland Security National Infrastructure Advisory Council by President Obama in December 2013. This fact could make for some interesting depositions, as it relates to exactly what type of advanced security systems Mandalay Bay had in place, leading up to and on the night of 10/1/17. 
"The National Infrastructure Advisory Council is tasked with providing the president with advice on the “security of the critical infrastructure sectors and their information systems.” The council is composed of a maximum of 30 members, appointed by the president, from private industry, academia and state and local government."
3) I am also aware of the fact that MGM put options activity spiked as well (needs more work), beginning at the same time gun stocks were rising and MGM was falling in price. 
4) For those curious about the trading in other major Las Vegas Hotel casino stocks, during this same time frame, this also needs more work. However, I can report that at the same time MGM's share price was falling, the share prices of Las Vegas Sands (LVS) and Wynn Resorts (WYNN) were actually rising.
Closing:
In closing, let me repeat; I make no claims or assertions that anyone mentioned in this piece has done anything nefarious. They likely did not. 
The question I might ask is, "Did someone else profit from the heinous acts of 10/1/17? Possibly the planners?"
Like many of you, I am interested and I am asking questions. I also remember that during 9/11/01, reports surfaced widely in the financial media that "many, many millions" in profits were made off of the purchase of put options in the shares of United Airlines and American Airlines, the two airliners that operated the four aircraft that were hijacked on 9/11 (among other well-documented reports of large put option purchases in numerous companies that had the most exposure to a shocked US economy). 
There's more...like the recent trading pattern in OSIS, which makes "detection systems" of all kinds (similar to their subsidiary "Rapiscan", which makes the TSA body scanners that were put in place following 9/11). Many are wondering how long it might be before we are forced to walk through similar devices, as we enter hotels/casinos.
I will continue to follow this story. Should you have information that might assist in my research, you can reach me at kip@vraletter.com.
I am a proud American. I want the best for our country. Wherever the truth leads us, that is where we must go. Follow the money.
Kip Herriage
VRALetter.com

 

 

 

Tuesday
Sep192017

VRA Update: Beating Mr. Market. Liquidity Continues to Flood In. 

As the markets continue to ride the wall of worry higher, hitting fresh all time high after fresh all time high, the VRA Portfolio is not only participating, but once again, beating Mr. Market at its own game. Here are the numbers for 2017:

S&P 500: +12%

Nasdaq: +20%

Russell 2000: +6%

VRA Portfolio: +41% 

The VRA Portfolio is aggressive...always has been and always will be...and it can be most closely compared to the Russell 2000 (small cap stock index). At 41% for the VRA (to 6% for the R2K), we are outperforming the small cap index by 6.8 times (or 680%).

About once a quarter I like to cover some VRA Core Principals and Portfolio Management concepts, especially important for our newer members but key reminders for us all. 

1) Again, the VRA is highly aggressive in our approach. I use the VRA System, a proprietary combination of fundamental and technical analysis, to help place us in the highest return investments possible. The VRA approach is not the right approach for everyone, but if you practice smart money management and portfolio diversification, the VRA can help you to crush Mr. Market (as we've done here for 13 of 14 years). 

2) Most use the VRA in addition to their conservative holdings (bank savings, bonds, retirement funds, insurance, etc). Only you know what the appropriate mix is, for your investment goals and your individual risk/reward personality. 

3) I never recommend more than 10 stocks. My goal is to crush Mr. Market and to do so with a diversified, but still concentrated approach. Over the years I've seen investors that hold 50-60 or more stocks in their personal portfolio. How they stay on top of all of them, I do not know. And, when they do have some big winners, the overall portfolio barely budges. If this is your approach, I would recommend instead the use of index funds, which give you both diversification and the ability to capture the returns of the major indexes. 

That's it really. Again, from my 32 years of doing this, day after day, the investment style that I recommend is the exact style that I use personally. I am a trend following investor that combines technical analysis (based primarily on price movement) with the fundamental analysis that was drilled into me on Wall Street, plus the wild card that only time can provide...a contrarian minded instinct, applying investor sentiment to keep us on the right side of market timing. 

Not all VRA recommendations will make us money. On those that go the wrong way (with a change in fundamentals or negative price action) we will take our losses and move on...removing emotion from the equation...while letting our winners run.

Important Point: Please remember to login to your VRA Members Site, at least once/week, to view the VRA Portfolio and make sure you are positioned properly. Also please remember that I am unable to provide individual investment advice....my Wall Street days are long behind me...but I will reply to your emails personally, and answer your questions the best way I am able to. 

VRA Market Update

Some big developments caught my eye over the weekend, as I ran my VRA scans and screens. Let's cover these...

1) EVERY major US equity index is now sitting at Extreme Overbought levels. While this does not mean that the markets are going to have a major correction, it does mean that we must tread a bit more carefully. Folks, it's from these types of extreme overbought readings that short term and painful sell-offs can occur. As you know, I watch the markets internals closely, and while I see no signs of an impending and sharp sell-off on the horizon, its the things that we cannot see that usually catch us by surprise.  

2) While I prefer the AAII Sentiment Survey, as you can see below, the USA Today Fear and Greed Index now sits at 77 (it was was 17 3 weeks ago). As a contrarian, we must be aware of these changes in investor sentiment.

3) Yes, P/E multiples are high...but they do not determine market direction. Instead, liquidity determines market direction. And man, do we have lots of liquidity in todays continued record low interest rate environment (which is fueling M&A activity and share buybacks). In addition, and for the first time in history, 3 central banks are adding to already massive debt holdings by also purchasing stocks. The PBOC, BOJ and SNB now own trillions in equities and buying more with each passing day. 

Its for all of these reasons...plus the fact that the world is returning to nationalism rather than globalism (a transformational event that few talk about) that I continue to be bullish on the markets. My 3-4 year DJ target remains 30,000+.

4) Inflation is returning...I write about it often...and this is another propellant for higher equity prices. The 1000+ PHD's at the FED seem to be missing the return of inflation, but we see it everywhere we look.

Check out the chart of gold below. Inverse head and shoulders patterns can be an indication that much higher prices are on the way. Once gold breaks $1400/oz, $1700 becomes my next target. Of course, the real leverage is in the miners...we'll make fortunes in this group over the next 1-3 years.

Until next time, thanks again for reading....

Kip