Money Flow Trading Method along with Risk Management

https://www.zerohedge.com/news/2019-...ops+to+zero%29


Rickards Warns "Bernanke Painted The Fed Into A Corner & It Can't Get Out"


https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=LY4e264-
by Tyler Durden

Sun, 03/24/2019 - 17:35



Via Greg Hunter’s USAWatchdog.com,
Four time best-selling author Jim Rickards says the Fed “throwing in the towel” on rate hikes is signaling a big problem for the economy.




https://zh-prod-1cc738ca-7d3b-4a72-b...25.19-Copy.jpg




Rickards says, “The Fed was tightening to get ready for the next recession..."

"You need to cut interest rates somewhere between 4% and 5% to get out of a recession. How do you cut interest rates 4% if you are only at 2.25%? The answer is you can’t. You have to get to 4% before you can cut 4%, and that’s what the Fed was trying to do...

How do you raise rates in weakness to get ready for the next recession without causing the next recession that you are preparing to cure? That was the conundrum. I never thought they would get it right...

and, as of now, it looks like they didn’t get it right. Meaning, they tightened so much to get ready for the next recession they slowed the economy.”





Rickards says, “Bernanke painted them into a corner, and they can’t get out..."

"There is no escape from the room. By the way, one of the reasons gold is preforming so well, the Fed has proved that they can’t get out of this. They got into it, but they can’t get out of it because every time they try, they sink the stock market. They sink the housing market. They raise the specter of recession. They slow economic growth. They don’t want that. So, they sort of pause and maybe tiptoe back into it, but they really can’t get out of it.”

On gold, Rickards says, “People always say there is not enough gold to support commerce and trade and the money supply. I always remind them that is nonsense..."

"There’s always enough gold, it’s just a question of price. At the current level of around $1,300 per ounce, that’s too low... What price does (support commerce and trade)? So, if you take . . . supply and say back it by 40%, divide by 33,000 tons, that comes to $10,000 per ounce. Could it be higher? Sure...

...if you used a larger money supply, you would need a higher price. If you would use a larger percentage . . . that would be a higher price. If you do that math, you can get to $40,000 per ounce easily. I want to make this clear. These are actual calculations based on actual numbers that are publicly available for money supply. It’s not made up.

It’s not science fiction. It’s just a simple question. If you wanted to go to a gold standard today without causing deflation, given the amount of gold and given the amount of money, what would the price have to be? The answer on some very conservative calculations would be $10,000 per ounce. . . . The time to buy gold is when sentiment is low and people hate it. . . . So, the bull market is intact.

We are in the fourth year. Bull markets start off slow because of all the bad sentiment, but then they gather momentum. So, it’s still not too late to jump on this train, and my expectation is this will pick up...

The signal the gold market is getting right now is the Fed is throwing in the towel. . . . They made some headway, but it came at a high cost because they slowed the economy . . . and they can’t continue. . . . Now, they are going to be desperate for inflation, and that is very bullish for gold.”

Join Greg Hunter as he goes One-on-One with best-selling author James Rickards as he prepares for the release of his next book called “Aftermath: Seven Secrets of Wealthy Preservation in the Coming Chaos.”

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Authored by Gerald Dwyer via The American Institute for Economic Research,

Is Bitcoin doomed to failure? It is not hard to find commentary on the internet indicating that Bitcoin is bound to fail. The authors invariably point to aspects of Bitcoin’s implementation today and argue that the current state is not consistent with success.

I take these comments about Bitcoin as comments about private cryptocurrencies more generally and will treat them that way.
It is hard to foresee Bitcoin’s future.

https://zh-prod-1cc738ca-7d3b-4a72-b...09655_1280.jpg

Ken Olsen said that "there is no reason for any individual to have a computer in his home" in 1977.It is easy to square that statement with computers of the day. Few would have found it worthwhile to have a computer in a dedicated computer room at a controlled temperature of about 65 degrees with backup power to avoid catastrophic damage. The statement is ridiculous in light of the computers in many people’s pockets today. A Samsung S8 is over 20 times more powerful than supercomputers of that day.

Many aspects of Bitcoin and cryptocurrencies more generally are likely to change in the coming decades. There is no reason to think that innovation in cryptocurrencies stopped with the creation of Bitcoin. There are issues. But it is not a large stretch of imagination to imagine some or all of them will be resolved in various ways.

It is fair to say that cryptocurrencies are not obviously likely to replace, for example, the dollar used in transactions in the United States given reasonably good monetary policy, a point made byWill Luther, for example. There is no obvious gain to people in the United States from changing to a different currency to buy groceries. A currency has to have problems such as hyperinflation in Venezuela for cryptocurrencies to become viable for use on a regular basis. Cryptocurrencies also are a good way to circumvent capital controls.

That said, it also is true that the current incarnation of Bitcoin has issues if it is to become a currency in common use anywhere. “Scalability” is a term that summarizes many of these issues. The number of separate transactions on Bitcoin’s blockchain is quite limited. The maximum number of Bitcoin transactions is currently capped at about 400,000 per day. This is trivial compared to the number of transactions that Visa processes, about 150,000,000 per day.

The amount of electricity used in Bitcoin’s proof-of-work mining algorithm is as much as some small countries use. A further substantial increase in electricity use would be a large increase in the demand for electricity worldwide.

Both of these things are problems remaining to be solved.
While increasing the size of blocks in the blockchain would be one way to solve the problem of the number of transactions, that would create a massive blockchain copied by millions of users, which would require a huge amount of storage space given current technology. Maybe digital storage space will continue to dramatically fall in price. Maybe transactions will occur on sidechains off the main blockchain. Maybe transactions will occur in institutions similar to today’s cryptocurrency exchanges. These exchanges already have far more trades than cryptocurrency blockchains. Maybe something else will arise. We don’t know today what solutions entrepreneurs will come up with. If we did, they would exist now.

Electricity use requires a different solution. Mining — the proof of work used in Bitcoin — is a way to reach consensus on the state of the blockchain. New mechanisms for resolving issues such as this arise frequently. For example, new auctions have been designed to divvy up the spectrum for use by smartphones. One possible replacement known today for proof of work is proof of stake. Proof of stake is a method of reaching consensus based on the ownership of the asset, not the use of resources to win a contest. Innovations are quite likely.

Two recent articles claim that Bitcoin is doomed to fail because of other issues related to mining. Both are wrong.
One article by Atulya Sarin nicely lays out an argument for a death spiral, an argument that also can be found elsewhere. A lower price for Bitcoin lowers the return from mining, so miners suffer losses and stop mining. Eventually it does not pay to mine. The problem with this simple statement of the argument is that it is based on the total expenditure by miners including mining equipment. Some purchases of mining equipment that were profitable when the price of Bitcoin was above $10,000 would not be made today. But the payments for the equipment are sunk costs that cannot be avoided by no longer mining. If using the mining equipment generates revenue greater than the cost of running the equipment, it will be kept in use. This revenue may not cover the cost of the purchase, but that cannot be helped.

A better version of the argument made by Sarin is that changes in the difficulty of mining are made roughly every two weeks and are determined so that the previous blocks would have been found at the rate of one every 10 minutes. If the price of Bitcoin falls far enough, it may pay to withdraw from mining and wait for the difficulty to decrease. All miners might withdraw because the electricity cost of mining is greater than the value of the new bitcoins awarded. This argument ignores the transactions fees paid by holders of bitcoins though, which would increase to compensate the smaller number of miners. Production of bitcoins might decrease, and validation of transactions might take longer in the short term, but mining will continue as long as there is a demand for transactions, in part because transactions fees can increase.

Another article, by Kevin Dowd, argues that there is a fundamental flaw in mining, namely that it is a natural monopoly. This recent article is a short summary of an argument made earlier, which I addressed in a blog post at the time. In short, bitcoin mining is a game that can be won or lost when there is competition. There is a risk of losing the race to create a new block. If there were only one miner, the game could only be won and there would be no risk. Therefore, a single miner or a big mining firm has an advantage because the larger the miner, the less risk of losing.

There is a disadvantage, though, to having a mining monopoly. A monopoly in a cryptocurrency would destroy or radically change the cryptocurrency because a major selling point of cryptocurrencies is the impersonal, somewhat anonymous aspect of transactions. Someone buying or selling a cryptocurrency need not trust anyone else involved in the transaction, including miners. If a monopolist was doing the mining, it would be very important to trust them. Requiring such trust would radically alter the basis of cryptocurrencies and possibly kill it. Everyone other than a possible monopolist has an incentive to avoid a mining monopoly even if the possible monopolist doesn’t see it that way. And miners do prefer not to obtain a monopoly, at least sometimes. Bitcoin mining firms have reduced their capacity when they have gotten too close to having a dominant share in mining. Even absent voluntarily limiting mining capacity and mining, there are other ways to limit miners from having too big a share of new blocks.

Recent developments in mining of Ethereum Classic illustrate how a miner’s share of the market can be limited. A version of the natural-monopoly problem short of a complete monopoly is called a “51 percent attack”: a miner has more computing power than the rest of the network and can alter the consensus achieved to create gains for himself at others’ expense. The cryptocurrency Ethereum Classic has had an actual 51 percent attack based on concentrated computing power in the hands of one miner. The short-term solution has been to increase the time to finalize transactions. One possible long-term solution is to alter the rules for accepting blocks. In short, innovations will occur to adapt to the problem and impose costs on miners who have too large a share of mining.

There is no reason to think that cryptocurrencies will disappear. They are useful now for some things. While hardly perfect, Bitcoin and similar cryptocurrencies in existence now have no fundamental flaw. Moreover, cryptocurrencies will change in unexpected ways to become increasingly useful to people.

https://www.zerohedge.com/news/2019-...ops+to+zero%29

The Russia investigation was based on false pretenses, false intel, and false media reports. House Intel found a yr ago there was no evidence of collusion, and Democrats who falsely claim to have such evidence have needlessly provoked a terrible, more than two-year-long crisis.
37.8K
4:55 PM - Mar 24, 2019

BREAKING:Rep. Devin Nunes says House Intel has evidence Clinton operatives & hi-level FBI & DOJ officials started Trump-Russia investigation in "late 2015/early 2016" &that House GOP will be making criminal referrals to AG Barr for officials who "perpetuated this hoax" for 3+ yrs


The 'coup' comes full circle...

https://zh-prod-1cc738ca-7d3b-4a72-b...25-600x558.jpg
Source: GatewayPundit
How long before #LockThemUp starts trending?

https://www.zerohedge.com/news/2019-...ops+to+zero%29

The leading Brexiteers have made a lot of noise demanding that Prime Minister Theresa May should resign. But during a hastily organized Sunday summit at Chequers, the prime minister's country house, May forced them to acknowledge a simple, if unpalatable fact: That the Tories, having already failed to oust her in a no confidence vote, have no obvious alternative for deposing May.

Yet, in a sign that exhaustion with the interminable Brexit nightmare is swiftly setting in, the Prime Minister has reportedly decided to offer the group, which includes Boris Johnson (who penned a weepy Telegraph op-ed lambasting May and calling for the PM to step down), Jacob Rees-Mogg, Iain Duncan-Smith, Steve Baker, David Davis (the former Brexit Secretary) and others, a marginally attractive deal: Back MV3 - that is, a third meaningful vote on the withdrawal agreement (remember, the last two were defeated by historic margins) - and May will commit to resigning.


Some might ask: Hasn't May already promised to resign? Yes, but not until some still-undetermined date before the next general election. But a bigger issue is that neither side has a whole lot of trust in the other. May has reportedly refused to serve up her own head until the vote has passed (for fear of an 11th-hour betrayal), while the ERG (the parliamentary group of roughly 70 conservative backbenchers) and DUP (the 10 MPs from Northern Ireland who have allied with the ERG in opposing May's deal) are hesitant to back the deal over concerns May might renege on her promise.
ITV's Robert Peston has more:

https://pbs.twimg.com/profile_images...LqR_normal.jpgRobert Peston

✔@Peston


I am reliably told that @theresa_may told @BorisJohnson, IDS, @SteveBakerHW, @Jacob_Rees_Mogg, @DavidDavisMP et al at Chequers that she will quit if they vote for her deal, including the backstop they hate. But she gave no specifics. So there is not a lot of trust she...


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7:03 PM - Mar 24, 2019
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544 people are talking about this

https://pbs.twimg.com/profile_images...LqR_normal.jpgRobert Peston

✔@Peston




Replying to @Peston

would actually quit. And the problem is that even if she persuades all Tory ERG MPs to vote for her unamended Withdrawal Agreement, which she won’t (because although Mogg and his supporters may succumb to her call for loyalty, Baker and...


171
7:03 PM - Mar 24, 2019
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58 people are talking about this

https://pbs.twimg.com/profile_images...LqR_normal.jpgRobert Peston

✔@Peston




Replying to @Peston

the Brexiter purists will resist her blandishments) and she also successfully woos Northern Ireland’s 10 DUP, she still does not have the numbers. May has alienated too many Labour MPs and Tory Remainer ultras (Grieve, Greening, Gyamah inter alia) to win the vote. So even with...


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7:03 PM - Mar 24, 2019
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118 people are talking about this

https://pbs.twimg.com/profile_images...LqR_normal.jpgRobert Peston

✔@Peston




Replying to @Peston

May offering herself for ritual sacrifice on the Brexiter altar, the ERG Brexiters and DUP may well say thank you very much, and vote against her anyway. Why should they compromise their principles, and alienate their loyal supporters, for May’s doomed project?


At this point, the backing of ERG leaders and the DUP might not even be enough to push the deal through. As Peston points out, the PM has alienated too many opposition MPs and loyalist remainers.

So, now that May has resisted yet another wave of pressure and communicated to her political antagonists that she isn't going anywhere - at least, not yet - what is next on her agenda? Well, on Monday, there will be an emergency cabinet meeting to consider possibly holding a series of indicative votes to see what type of plan MPs might actually support (second referendum? A 'softer' Brexit? Straight-up revoking Article 50 and pretending the whole Brexit nightmare never happened?)

But regardless of what the cabinet decides, a cross-party group of rebel backbenchers, led by Tory MP Sir Oliver Letwin, might very well force one anyway by seizing control of the Commons - and they might succeed, in a vote that's expected as soon as Monday evening.

However, the indicative vote plan has a major flaw (which is probably why it hasn't already been tried, at least not in earnest): Despite all of the squabbling and intraparty infighting, there has never been a credible alternative to the withdrawal agreement. Which is one reason why, as Peston ponted out, Johnson and the other hard-core Brexiteers might be preparing for "the mother of all u-turns":Possibly agreeing to back May's deal in exchange for her resignation and commitments involving the talks over the future trade deal, which would take place during the transition period.

Good Morning Benjaminis, yesterday I made $600+, now I have 06 positions OPEN, the problem is that I am at work,

So I cannot do babysitting/watching moment by moment. Otherwise I would have closed all when I saw $500+ in total,

10 minutes ago( my wife told me ). How is your trading going, what’s your expert advice for the next three months,

What’s your plan for April-June?? Plz advise. thanks,

I am talking about the following:-



US30

S & P500

USD/JPY

GOLD

SILVER.



For the next 03 months, April-June.

MY experience tells me never ever to show demo performance to your wife. I did and it created a persona of how successful I am... resulting in a big purchase at her favorite Prada store :- We poor souls don't need that kinda pressure lol

HAHAHAHAH, well said, point noted.

VEEFX, I treat my demo, Live account., as per instruction/guidance of my mentor, Benjaminis.

Benjaminis, plz check your email. Thanks

Good Day Gentleman

I have not been at my home/office since yesterday morning so I have not posted or spend anytime on this thread. I am back home now and also at my office which for the moment is one and the same. Please give me 24 hours to catch up and review everything.

In the meantime thank you for your comments and yes I understand as I am a single man at the young age of 75. So yes woman and money and family and all of the good things are what they are. For the moment I am happy with the peace and quiet however that could change if I can find the right 25 year old woman to share the rest of my life with.


Benjamin

https://moneymaven.io/mishtalk/econo...EOC0Up4Z2hLIA/

I am amused by widespread reports that the UK Parliament "Took Control" of Brexit. Second, I do have a plan for Tories.
Silly Headlines

1. Financial Times: The week parliament takes back control of Brexit
2. BBC: MPs voting on plan to take control of process
3. Wall Street Journal: U.K. Parliament Seeks to Seize Control of Brexit Agenda
4. CNN: Brexit deadlock as MPs take control of process from Theresa May
5. Washington Post: Parliament to exert control over Brexit with “indicative votes”
6. AP News: UK government defiant as Parliament takes control of Brexit
7. New York Magazine: What Happens Now That Parliament Has Seized Control

Every one of those titles is flawed. Parliament has no means of "taking control" other that outing May and putting in a PM who would bow to the wishes of Parliament.
This was the subjected of at times heated debate yesterday on my website where I posted Brexit Groundhog Day # 402 (Or Whatever): MPs Attempt Brexit Process Takeover.
That title could have been a bit better, but my lead-in image accurately stated the position. The vote was not legally binding.
I may have run out of characters (The Maven allows 80). I did spend the entire article mocking the idea. My opening lead-in was "Brexit silliness has been ongoing for at least a year. I made up a number. MPs voted to take control of Brexit. So What? "
So What?
Yes that is the correct idea. Now let's flash forward to my bottom line.
Here's the bottom line that few seem to realize. MPs can instruct the Prime Minister to do something but they cannot force the PM to do it. The EU deals with heads of states, not MPs.


One person, I believe from the UK responded that I was wrong. I repeatedly asked how the MPs could force May to do anything. I got nonsense for a response, including this silliness: "Nick Boles a Tory rebel MP was asked by Emily Maitlis on BBC2 would happen if Theresa May ignored the result of the indicative vote, he replied that We would enact legislation to force her to go back to Brussels."
What a laughable joke. They would pass legislation. So what? Parliament cannot force Theresa May to go to Brussels.
Not Legally Binding

1. The Guardian in yesterday's Live blog: Theresa May stated "The government would not be obliged to accept any plan deemed most popular with MPs, and in fact May strongly hinted this afternoon that she would reject what many expect might emerge as the most widely-supported idea - staying in a customs union with the EU."
2. The Financial Times: "The so-called indicative votes, tentatively scheduled for Wednesday, would not be legally binding on the government but could be the strongest indication yet of what kind of Brexit deal could pass the Commons."

Both of those idea state the situation accurately. Eurointelligence is even more emphatic.
No, the UK parliament has not taken control
At 3:00 AM this morning, Eurointelligence posted this headline: No, the UK parliament has not taken control
Be wary of blather. Nothing has been taken off the table. Nobody is in control. The UK press hails last night’s passing of the so-called Letwin amendment as the House of Commons finally taking control of Brexit. It certainly demonstrates that the UK government has lost its majority and that elections will probably happen very soon. But the impact on Brexit itself is far less clear. And nobody seems to be in control.
Most of the UK’s political class, including MPs, do not understand the legal status of last week’s resolution by the European Council. It constitutes an official adjunct to EU law. It sets out two clear pathways to avoid a no-deal Brexit - either pass the deal this week, and leave on May 22; or agree to hold European elections and leave later, which would also require a political process.
Yesterday May explicitly ruled out support for a no-deal, but beware: this is merely her saying that this is not her first choice. She said parliament can stop it. This is true but also misleading. Parliament can stop it by revoking Art 50, or replacing her another leader within the next 14 days. Neither is very likely.
Accidental Brexit
This Paragraph is key.
It is not hard to see how an accidental no-deal Brexit can still happen: Theresa May loses the meaningful vote; indicative votes produce a narrow victory for one of the alternative options; May refuses to honour the vote; May refuses European elections; she goes to Brussels on April 12 with nothing to say; Emmanuel Macron says Non.
Wresting Control
That's it. No one can force May to do anything. But they can remove her.
Radical Idea
Tories fear a general election. They could easily lose although they are slightly ahead in the polls.
Rules state that Tories can only hold a leadership challenge once every 365 days.
Why Not Change the Rules?!
I believe there is still a small window of opportunity, thanks to the EU-granted extension, not for parliament to wrest control, but for Tories to do so by changes the rules.
I am unclear of the process in which Tories can do this. But there are 15 days before the April 12 cutoff. If the Tories can quickly change the rules then vote Theresa May out, say within the next 5 days, the Tories do have a chance to wrest control.
Bottom Line
The UK parliament cannot wrest control of Brexit against May's will.
The Tories may have a small window of opportunity if they agree to change the rules, then quickly act on it. I believe this takes a minimum of 10 days, so the window of opportunity for this is 4-5 days.
Mike "Mish" Shedlock

I am sure you will find some hottie onboard this beauty to move with you wherever you desire to relocate :-)

Hello Benjaminis, Great you are enjoying your young age. Indeed the passion you have for the fundamentals is great.Been reading alot about this thread and how you follow the market in detail!Wow! You are a treasure. Alot of info regarding the collapse of the banking system and brexit...Global stuff,thanks for the info. Its unfortunate the time i have discovered your thread, you are about to leave but will ask a few questions here, hope you find time for them
1) Trend to you is money flow........With the various info that keeps hitting the market to change sentiment, how are you able to cope up? Do u have a greater picture of sentiment regardless of the news that keeps coming in? When do u decide to alter your direction(Wc economic news do u think can alter sentiment from the shortterm to long term?)
2)With evryone talking about the recession coming, and the collapse of the stock exchange market, why is it that the stocks are still doing well? are the people buying them unaware and what do u think will be the last blow to the stock exhange market before we head into the recession?
3)At some point you highlighted that the bond market is very critical to the movement of the financial markets. I understand bonds are risk off/longterm assets. How can a forex trader trading shortterm be able to use the bond market to help them to trade spot forex?
4) Do you use the bond market open times,libor fix time,gold auction times to influence your decissions? and if so why and how?
5) Do u think a trend in a high yield currency vs low yield currency ie AUDJPY is enough to determine money flow? If not, why?
6)When you point out your direction to trade, do u use technicals ie S/R to pinpoint entry or you just enter and how do u place your stops
7) Do u use any kind of valuing/correlations in your trading to determine if instruments are underpriced or over priced ? If so, would love to know more on how you do this

Sorry about my long post but would be glad if you find some time to answer...Thank you once gain for this thread. Great info,Hope you find that great 25 year old to enjoy the rest of your life.More hapiness to you

https://www.armstrongeconomics.com/a...n2ySg.facebook

911
Blog/Understanding Cycles

Posted Mar 27, 2019 by Martin Armstrong

https://d33wjekvz3zs1a.cloudfront.ne...mplexity-1.jpg

There was a 14th-century Franciscan friar by the name of William of Ockham who is credited with having formalized the principle that “simpler solutions are likely to be more correct than complex ones.” Hence, we seem to always try to reduce everything to a single cause and effect. Some have rephrased this as “keep it simple, stupid,” and it has emerged with the label “Ockham’s razor,” which is supposed to be a tool that cuts through complexity to get from point A to point B. However, is this the very problem that prevents us from seeing reality? It was, after all, this very principle that supported the flat earth theory. It prevailed and even led to the execution of people such as Giordano Bruno (1548–1600) for daring to propose that the universe was not revolving around a flat Earth. Even Galileo Galilei (1564-1642) was charged in 1633 by the Roman Inquisition and forced to sign the confession or suffer the same fate of Bruno that the Earth was flat.

https://d33wjekvz3zs1a.cloudfront.ne...T-IntRates.gif

In funds management, the statement that proves there is complexity is a legal requirement: Past performance is not a predictor of future success. All investing involves the risk of loss.

While there is a desire to make complexity simple and understandable, this is really completely misguided. Clearly, simplicity rather than complexity is by no means the proper course of action for we then cannot see the interconnections of how everything truly functions. The greatest mistake in the analysis is always trying to reduce any effect down to a single cause. The world is a complex mechanism.

It is indeed like a rainforest. There are countless species and each is interconnected. Exterminate one and you will find that it was the food source for another. That species, in turn, was the food source for yet another and so on. The world economy is equally complex. This is why I say we are ALL CONNECTED. Create a war in one region, we may not be involved with troops, but the capital flows shift. How can we forecast anything by ignoring all the interrelated influences?
https://d33wjekvz3zs1a.cloudfront.ne...ari-London.jpg


There are those who advocate that the best way to achieve your long-term investment objectives is to keep in simple. Yet they are looking at history and banking everything on a continuation of inflation. I have told the story at conferences how I bought a 328 Ferrari when I lived in London in 1985 when the British pound fell to $1.03. The Italians were getting $60,000 for the car in the states. It was still priced in pounds when it was $2. I bought the car for about $35,000. The Italians could no longer sell cars at that price so they doubled the price in pounds. Then the pound rallied and went to almost $2. I drove the car for 2 years, sold it used, and nearly doubled my money. Then people were buying Ferraris as an investment, thinking it was the car that appreciated when in fact it was just a currency play. If you did not look at the currency, you missed the whole point, so keeping it simple indeed made you stupid.


Rapid technological development in recent years across industries has helped to expose the fact that we live in a global economy and are all interconnected. Fund managers, because of regulation, are blinded by this interconnected world for they are not allowed to invest globally in a diversified portfolio. This is why we have so many specified funds and people claiming to “just keep it simple” with a hold policy because it always comes back.

Markets, on the one hand, appear deep and complex, rendering them impossible to understand fully when limited even by law to a purely domestic view. This has resulted in the advice of buy and hold as a strategy to fight against complexity with simplicity. Then there are investors who believe they need investment solutions that are nimble and flip positions based upon the talking heads on TV. They are brainwashed by their market myths. This has merely become grand sophistry trying to fight complexity with a simplicity that sounds logical by reducing all activity to a single cause and effect.

Asset allocation philosophies have emerged which invest other diverse market sectors knowing that they are polar opposites. They assume that the world is too complex beyond their comprehension so spread the wealth and hope for the best. These strategies have expanded as of late beyond the traditional stock/bond mix that was really exclusively domestic-oriented. In modern times post-1985, alternative strategies emerged introducing hedge funds that also incorporated foreign exchange, commodities, options, private debt, venture capital, and even real estate.

As hedge funds began to report their 2018 performance, an abyss quickly emerged between managers who outperformed the index and those who saw staggering losses with a third group landing somewhere in between. Overall, the industry saw its biggest annual loss since 2011, declining 4.1% on a fund-weighted basis, according to Hedge Fund Research Inc. Mostly, the smaller funds were able to flip portfolios quickly and that allowed them to trade around the big funds that can no longer maneuver. Most were unable to navigate the market turbulence in what became the worst year for the S&P 500 Index since the financial crisis. Most took “views” of what they thought would unfold and it cost them dearly. The funds that relied upon a personal opinion proved to be the worst for the vast majority kept viewing the stock market would crash any day, which never happened.

The illusion that simplicity provides the best long-term investment return is really predicated upon an assumption since the Great Depression that if you just held through all the 50-70% corrections you would be OK at the end of the day. The problem with this argument is that we are all human. I have never met someone who can actually do that. Then there is the problem of surviving the long-term. The city of Detroit suspended its debt payments in 1937 and resumed in 1963. If you owned such bonds for retirement, perhaps your heirs benefited, but you would have died broke and starving. It all depends where you are in the business cycle.

Categories: Understanding Cycles
Tags: Buy and Hold, Hedge Funds, Ockham's razor, William of Ockham

COMMENTS FROM BENJAMIN: I want everyone to carefully think about the important meaning of the powerful words of Martin A. Armstrong.

I have seen the recent questions just posted here today and I will give a detailed answer later today. However the KEY to making money in trading anything is to think in a new way to allow you to understand cause and effect. 75% of traders use some form of technical indicators. The short term ones no longer have any real importance. I will explain later today on this topic and all the others that tie a ribbon on your birthday gift.

COMMENTS FROM BENJAMIN: Thank you for the kind words and your questions. I just wanted to acknowledge your post and set up the structure so that I can answer everyone of your intelligent questions. Thank you very much for registering so that you can post. If I had more people registering to post I would continue to post here. My new corporation website will be a pay site however as I have said before on this thread my monthly fees will be capped at $50 US dollars monthly for 24/7 access. Even though my fees will be less than anywhere else at a minimum your Forex and other trading will improve. I have learned one of the lessons of life.

Anything that is given away free has no value because only when someone spends some money are the odds better that they will have the initial discipline to use what they paid for. Then once they see results they will develop hope and confidence and build from that.

https://www.zerohedge.com/news/2019-...ops+to+zero%29

However, at least one major obstacle to May's deal remains: The DUP, the group of 10 unionist MPs from Northern Ireland, has hinted that it might support a long-term Article 50 extension over May's deal. Again, it's unclear whether this, or any other alternatives, would be acceptable to Europe. But there are apparently many in the Commons who are ready to take their chances.

Earlier this month, the Commons rejected no deal, and endorsed an extension (which was then granted, albeit in more limited form than what May had requested) in a series of indicative votes after May's deal was defeated for the second time (by yet another historic margin).

But looking ahead to Wednesday's vote, Ransquawk has a rundown of what are widely believed to be the seven options expected to be placed on the ballot.

1. PM MAY’S DEAL: The deal has been rejected twice already by parliament but remains the only deal the EU can quickly ratify and therefore remains an option. If voted on, it will attract support from May loyalists, but DUP and ERG remain opposed.
2. NO DEAL BREXIT: This would lead to the UK leaving the EU on the new revised date of April 12th on WTO terms. HoC have twice voted against this option, albeit by only four votes last time.
3. ELIMINATING A BACKSTOP: This, in theory would mean re-writing the Withdrawal Agreement, something the EU repeatedly dismissed. A variant would be to promote "alternative arrangements" i.e., technology to monitor the flow of good that could replace the backstop. The EU have previously agreed to examine this, although implementation could take years.
4. CANADA-STYLE DEAL: A popular idea with hardcore Brexiteers, this would focus on the future trade deal with the EU rather than the Withdrawal Agreement. In theory, the UK would accept no continuing regulatory alignment with the EU, although is unclear how far the EU is willing to negotiate this. However, this would not solve the impasse regarding the Northern Irish border, nor has there been signs of many Labour are willing to support this.
5. NORWAY-PLUS DEAL: This soft-Brexit alternative would keep the UK in the single market by remaining in the European Economic Area (EEA) and European Free Trade Association (EFTA). Unlike EFTA, the deal would also keep the UK in the customs union (hence the plus). The deal has been promoted by a group of Tory backbenchers, Labour leader Corbyn has also shown some interest and some believe it would be the most popular option given a free vote. The Sun reported last night that over 100 are ready to back this deal after PM May's deal is killed off.
6. LABOUR DEAL: This would mean the UK remains in a customs union with the EU and remain close to the single market. European Council President Tusk has previously deemed this as “promising”, although the plan was rejected by parliament. The Labour deal is unlikely to attract support of the Conservatives.
7. SECOND REFERENDUM: A replay of the 2016 referendum would be a separate option although nobody in parliament is seriously calling for that. However, a referendum could be attached to one of the options above. When a second referendum was put on PM May’s deal before the HoC this month, only 85 MPs voted for it after labour ordered its MPs to abstain.
Debate over tonight's vote is currently underway in the Commons. So far, the pound has been sliding, but the move has been relatively muted.
Readers can follow along live below:

Oliver Letwin, the Tory MP and leader of a cross-party "resistance" who masterminded Wednesday's vote, has said that he doesn't expect a clear alternative to May's deal to emerge on Wednesday. To allow this to happen, the Commons will need to hold a series of votes, with the next vote perhaps coming next week, to whittle down the options until a clear winner emerges. Keep in mind, the UK is set to leave the EU in less than three weeks, and the bloc has insisted that it won't approve another deadline extension unless May's withdrawal deal has been passed.

Anyway, back to Wednesday's lunacy. Commons Speaker John Bercow is expected to determine which alternatives will be on the ballot at around 11 am ET (3 pm London Time, after control of the proceedings has officially transferred to lawmakers. The vote will follow at 3 pm ET (7 pm London Time). Results aren't expected until 4:30 pm ET (8:30 London). Instead of selecting a single option, MPs are expected to indicate which alternatives they would support, and which they wouldn't. Instead of heading to lobbies to vote, as is traditionally done in the Commons, MPs will be given paper ballots to fill out.

Following speculation that May could "whip" (i.e. push Tory MPs to back) for her deal, recent reports said May's government will officially oppose tonight's vote. Labour, on the other hand, will reportedly whip for a second "confirmatory" Brexit referendum where the public would decide on May's deal or no Brexit.

Clearly worried that the vote is the first step toward either a lengthy delay of Brexit, or an all-out cancellation, the leaders of the Tories Brexiteer faction earlier this week indicated that, after months of relentless opposition, that they would set their objections aside and back the prime minister's deal in a third meaningful vote (which is still expected to happen, even after Bercow declared that it couldn't be brought back for another vote under current law). Jacob Rees-Mogg, Iain Duncan Smith and Boris Johnson. Johnson became the latest to hint that he would back the deal last night, when he suggested that it would support it in exchange for May promising to resign.

It's possible that the PM could announce a date for her resignation on Wednesday, or soon after.