You Could Have $90,523 in “Unclaimed Profits”

Imagine logging into your brokerage account right now and finding an additional $317,780.

How would that feel?

That’s exactly what a Berkeley trained mathematician showed Tom T. how to do.

The mathematician’s name is Dr. Richard Smith. And he’s come up with what’s quite possibly the most unique investing idea of the last quarter century.

Dr. Smith discovered that upwards of 99% of investors have potentially thousands of dollars hiding in their brokerage accounts.

Now he’s come up with way that shows you how to identify and collect the unclaimed money currently sitting inside your portfolio……without the need to buy anything new.

But don’t take my word for it… or Dr. Smith’s for that matter.

You can watch as he walks a group of investors through their accounts and shows them how to find tens of thousands, often hundreds of thousands of dollars that rightfully belong to them…

Like Ann C. Dr. Smith revealed an extra $500,000 hidden in her account… and then showed her how to start immediately collecting that money.

How much in “unclaimed profits” is your portfolio hiding?

In the Live Demo, you’ll see how to find out…including where all that money comes from and why you’re rightfully entitled to claim it.

Watch the Live Demo Here:

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NTDOY Breaks The High Set by Pokémon Go Hype

Nintendo (NTDOY) opened at $37.61 today, $0.24 cents above the hype of the Pokémon Go launch which sent the stock rallying to $37.37 last summer. But why is it a big deal for the Japanese video game company to be back up near last summer’s high?

The Pokémon Go hype never should have sent investors to buy up shares of NTDOY. Pokémon Go is not a Nintendo application; there isn’t a Nintendo logo to be found anywhere within the app itself. In a statement released by Nintendo last July they clarified this misunderstanding.

But even if you fell for the misguided investor hype of buying last summer, you may soon have a nice profit on your hands. Nintendo has had a very good year and there are no sign of them stopping.

RELATED: You Lost Money in the Markets Last Year, Here’s Why…

March 3rd of this year the big N launched their newest console the Nintendo Switch. The system has been a hit ever since, out selling it’s competition and selling out with retailers. On March 31st the Nintendo Switch had sold 2.74 million units. The system launched with an equally successful game title The Legend Of Zelda Breath Of The Wild. This combination has put Nintendo back on the minds of every gamer and profits back in the company’s treasure chest. This is just the beginning for the new console, more games including new 3rd party titles are rapidly approaching their release dates and the profits should continue.

The annual Electronic Entertainment Expo (E3) is next month and Nintendo will be showcasing their ‘Mickey Mouse’ of intellectual properties: Super Mario. Super Mario Odyssey is a Nintendo Switch exclusive due to launch this holiday season. Super Mario always brings the sales in from around the world, this new Mario game is sure to bring the profits. The company will also be showing off another IP exclusive, Splatoon 2 which has a large Japanese fan base and will launch this July. You can expect to hear more about these anticipated game and other plans Nintendo has in early June at the E3 conference. We expect the hype that comes from Nintendo at E3 will also help rally the stock.
mario and splatoon
Nintendo has also released three smart phone application games; that unlike Pokémon Go, they actually do own exclusivity to. There are also plans for more mobile apps on the way. The recent news of the Zelda mobile app has set the internet ablaze with people wanting to know more. Little is known about the Zelda app or how it will work or even if it will be profitable. There are fan theories, but Nintendo is very secretive about what the Zelda app will be. The Zelda app is due to release this year, but not before their Animal Crossing app. Little is known about both, and it will be interesting to see how Nintendo plans to monetize these mobile games.

After the investor hype and misunderstanding of the Pokémon Go fiasco, I won’t get caught up in the hype of a mobile app until I know more about it. And neither should you. We should know, who profits from the app? And how have they monetized it? I am long for NTDOY and I am very excited of their potential with the new console and mobile applications.

Disclosure: I/we have no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.

woman

LIVE DEMO: Woman finds $500,000 in Unclaimed Money
Radical new tool helps you find thousands of dollars of “Unclaimed Profits” on all your stocks. Don’t believe it? Watch this Live Demo, featuring 7 real-life volunteers.

You Lost Money in the Markets Last Year, Here’s Why…

Imagine logging into your brokerage account right now and finding an additional $317,780.

How would that feel?

That’s exactly what a Berkeley trained mathematician showed Tom T. how to do.

The mathematician’s name is Dr. Richard Smith. And he’s come up with what’s quite possibly the most unique investing idea of the last quarter century.

Dr. Smith discovered that upwards of 99% of investors have potentially thousands of dollars hiding in their brokerage accounts.

Now he’s come up with way that shows you how to identify and collect the unclaimed money currently sitting inside your portfolio……without the need to buy anything new.

But don’t take my word for it… or Dr. Smith’s for that matter.

You can watch as he walks a group of investors through their accounts and shows them how to find tens of thousands, often hundreds of thousands of dollars that rightfully belong to them…

Like Ann C. Dr. Smith revealed an extra $500,000 hidden in her account… and then showed her how to start immediately collecting that money.

How much in “unclaimed profits” is your portfolio hiding?

In the Live Demo, you’ll see how to find out…including where all that money comes from and why you’re rightfully entitled to claim it.

Watch the Live Demo Here:

Unclaimed Profits in Your Account

There’s no such thing as free money.

But if you own stocks, there’s a simple way for you to make up to $50,000 or more in “Unclaimed Profits.”

This chart tells the full story:

Trade Stops Chart

In short: A Ph.D. has developed an online tool called “The Magic Calculator” that could help you add $1,000s in extra profits to every position you own.

You don’t have to buy any new investments.

All you have to do is go online… sync your brokerage account… and potentially double your profits on every stock you own.

In fact, the Magic Calculator is now used on more than $1 billion by thousands of traders in 97 different countries…

Plus, it’s drawing the attention of experts profiled by the Wall Street JournalForbes… and USA Today.

See how it works here.

video imageYT

Incomes Are Going Down, Jobs Are Disappearing…Here’s Your Survival Guide.

I got fired…

Security escorted me out. They would send me my box later.

All self-help is bullshit. It’s hard to choose yourself when an iceberg hits the Titanic.

People write books: “How To Not Give A Shit” and it’s supposed to be helpful – to toughen you up, make you stronger.

“The 5 Minute Effective Leader”.

Doesn’t work.

 

Or then there’s the books not in the psychology section but across the aisle in the self-help section: meditate, think positive, picture positive visualizations.

When the boss asks you to leave and security escorts you out and there’s no severance, there’s also no meditation in the world.

Meditation won’t pay the rent. Thinking of nothing won’t put food on the table.

Visualization is a dream. And the universe owes you nothing.

Sure, if you do it, it might help. But who is doing that?

I’m not doing it.

I can’t. I’m stuck.

When you’re depressed you can’t sleep at night and then you can’t wake up in the morning.

I can’t handle thinking of a future where I might be broke. Or lonely. A shaved head, living in a gutter, abandoned.

I’ve seen it happen.

I’ve been broke…worse than broke, more than once. But I keep coming back.

 

The truth is that I always go broke when I stop reading.

Before I started my first business I was obsessed with reading everything I could. Fiction (because I wanted to write novels) and non-fiction (because I loved technology and something called “The Internet” was just starting).

And then I started reading books about business because the Internet and entertainment and my life all seemed to be merging with business.

My first business was creating websites for people. My second business was creating “mobile websites” for people, which really didn’t exist then.

In between the first and second business I played poker for 365 days. Even the day my daughter was born. I couldn’t help myself.

My accountant finally said the worst thing he can ever say to me. He said, “you should be starting another business”. I wish I had just kept playing poker.

I lost everything in that second business. Here’s what happened.
I stopped reading.

I separated from my wife. I had no clue what my business did. I fell in love. I started drinking a lot. I went broke. Lost my house. Lost my family. Blah blah.

I’m sick of “failure porn”. Ok, we get it.

People fail. Then they come back from it and somehow they turn into Steve Jobs. Steve Jobs is this generation’s mythical “phoenix”.

So now I get to listen to music on my phone and my teenage daughter probably sends nude pictures to boys on her iphone.

When I was playing poker I read every book ever written about poker. I watched every video. I was still reading a lot.

But something got into my head. Something bad when I started my second business.

I was really unhappy in a lot of ways. I can’t even tell you why I was so unhappy. My dad was always going broke so I thought I was finally going beyond where he went. I thought I was superior to him.

I thought I didn’t need to do what he did.

And since he was a big reader, I no longer needed to read. And since he stayed with his wife, I no longer needed to.
I know now: investing in yourself is the best investment you can make.

Incomes are going down for young people for the first time in forever…

Jobs (a TON of jobs) are being lost to robots, to artificial intelligence

Student loan debt is out of control, nearly impossible to pay back…

And housing keeps getting more expensive…

But forget about failure porn. You don’t have to lose.

Do what I did. Read.

 

I picked out 20 books to help you. 20 books that will make you smarter (and maybe richer).

Remember I always go broke when I stop reading. So I choose these books as the cure for fear about money.

And I want you to have them.

All 20. I will pay for them and ship them to you.

Some books in this giveaway are the sort of books I call “IQ books”. I read them and I feel like my IQ is going up. “Sapiens”, “Bold”, “Wonderland” are like that and several others.

Other books are about amazingly intelligent people who are sharing their lives and I am just blown away by not only their experiences and their intelligence but also how their playfulness often inspired them to greatness. “A Man for All Markets” and “Moneyball” fall into those categories.

And there’s a third category on this list which includes books I personally used to get myself to be a better investor.

The investing world is constantly changing. But to get good you have to know the foundation and many of these books are foundational, even the one fiction book (a financial thriller from  the 1970s) that snuck it’s way onto this list.

I can’t give all 20 books to all the people who read this, but I can give them to some people. See the bottom of this post.

 

Here are the books I’m giving away:

  1. Tools of Titans” by Tim Ferris’s
  2. Bold” by Peter H. Diamandis and Steven Kotler
  3. Abundance” by Peter H. Diamandis and Steven Kotler
  4. Unshakeable” by Tony Robbins
  5. Damn Right!” (biography of Charlie Munger) by Janet Lowe
  6. Wonderland” by Steven Johnson
  7. Payoff” by Dan Ariely
  8. The Billion Dollar Sure Thing” by Paul Erdman
  9. Sapiens” by Yuval Noah Harari
  10. Moneyball” by Michael Lewis
  11. The Undoing Project” by Michael Lewis
  12. Stealing Fire” by Steven Kotler and Jamie Wheal
  13. Essays of Warren Buffett” by Warren Buffett and Lawrence  Cunningham
  14. The Black Swan” by Nassim Taleb
  15. Fooled By Randomness” by Nassim Taleb
  16. A Man For All Markets” by Edward O. Thorp and Nassim Nicholas Taleb
  17. Too Big To Fail” by Andrew Ross Sorkin
  18. Elon Musk” by Ashlee Vance
  19. Hedge Fund Market Wizards” by Jack D. Schwager and Ed Seykota
  20. Reinvent Yourself” by James Altucher

 

Here’s the link if you want to sign up for my giveaway. I think it’s about $400-500 in value, but I haven’t added it up. Maybe it’s more.

There are also ways to increase the chances of getting all of the books. I describe them in this link: http://www.jamesaltucher.com/giveaways/book-giveaway-2017/

I charge nothing. I want nothing.

I just want to run into you and we can say, “We both loved these books…and here’s how they changed our lives”

 

Trump Can’t “Prime the Pump”

“The U.S. Economy Is Back on Track,” read a Bloomberg headline over the weekend.

Apparently, inflation and consumer spending picked up last month.

We are so glad to hear it.

And last week, New York Fed President William Dudley said the U.S. central bank might begin lightening its load of bonds this year.

Or maybe not.

Or maybe they will add to it. Who knows. It depends.

Priming the Pump

The Fed stopped buying bonds via its quantitative easing (QE) program in 2014.

But the Bank of Japan and the European Central Bank (ECB) have kept up their QE programs, adding to the world’s money supply.

Last week, ECB assets rose to $4.1 trillion, making it the biggest single holder of unpayable debt in the world.

The Fed, the ECB, and the Bank of Japan are running neck and neck in this madcap race to bankruptcy. Together, these three central banks own about $12.5 trillion in assets.

What does this mean? Why is it important? Who cares when the Fed sells its bonds?

President Trump, interviewed by The Economist, claimed he had invented a key metaphor. Yes, he came up with the idea of “priming the pump… just a couple of days ago.”

He must have been pulling the reporter’s leg. The idea has been around since the 1930s; the president must have heard it before.

“Yeah,” he explained. “What you have to do is you have to put something in before you can get something out.”

The trouble is economies are not machines. There is no pump. And governments have nothing to prime it with anyway; you can’t prime a pump (if you had one) with water you don’t have, either.

But wait. Why not just borrow the money… spend it… and prime the pump that way? Isn’t that the tried-and-true formula?

Yes, that’s the formula. But let’s look at it more closely. When the feds borrow money, they must take it away from other uses. Then what do they do with it?

They spend it on the same things they always spend it on – boondoggles, giveaways, and pointless wars. These are designed to enrich the few at the expense of the many.

Net gain = zero. Or less.

But the feds keep at it. The three largest central banks have added $9 trillion of pump-priming liquidity since 2008.

This gush of money has produced the weakest “recovery” in history… and a U.S. economy that is now barely growing at all.

Pharaoh’s Tomb

Let’s back up a moment…

When we speak of the Fed’s “assets,” we’re talking about (mostly) the Treasury bonds the Fed bought.

From an economic point of view, the transactions were hollow and meaningless.

A bank held a U.S. government bond. It sold the bond to the Fed for cash (in the form of reserves). Now it has cash equal to the value of the bond. No change in its balance sheet.

The Fed, meanwhile, has an additional asset (the bond)… which sits in its vault as lifeless as a grain of wheat in a pharaoh’s tomb.

The central bank had no real money to buy the bond. It created the money out of thin air by increasing reserve account balances at banks – which is where the story gets a little hard to follow.

This “money from nothing” is not the sort of “something” you need in order to get something out of it. The net effect was to raise bond prices and lower their yields so that borrowers won and lenders (savers) lost.

Bad Idea

This is a bad idea.

Economic progress depends on saving, not spending. Saving real money is the “something” that provides the capital for new factories, new buildings, new services, new jobs, and new productivity.

But that’s not what the feds did. Lowering real interest rates, they discouraged real saving. And the real economy slowed down.

Meanwhile, artificially lower borrowing rates – and $9 trillion in new central bank cash – had a dramatic effect on the financial economy. What to do with all this money?

The banks and other large players had few choices.

What could they do with it?

Buy stocks! The stock market boomed.

So what would happen if central banks now withdrew this cash?

Imagine they now turn the liquidity valve in the other direction. Instead of buying bonds, they sell them. Instead of putting money into the system, they take it out. Instead of encouraging investors to buy stocks, they encourage them to buy bonds.

Then what happens?

What happens to world stock markets when the $9 trillion goes away?

What happens when the “something” the feds put in becomes the same “something” they take out… when they un-prime the pump… when they reverse the great stock market liquidity boom of 2009–2017?

Ai yi yi.

Nobody wants to find out… least of all the central bankers who made this mess.

Avalanche Notes: Bill believes these same “easy money” policies and insider deals will have the same fate for the U.S. He is so adamant about the disaster that’s coming, he writes daily posts on Bonner & Partners to help you prepare for the consequences of decades of reckless Fed policies.

Bill Bonner: The problem with phony money…

SALTA, ARGENTINA – Yesterday, we visited the museum in the center of Salta.

It is a museum of the history of the city and the province, set in the repurposed town hall in the main square.

We had begun the day by going to mass in the old cathedral across the square – an ornate and opulent example of Spanish colonial architecture.

The cathedral is magnificent. It is a classic cruciform building with barrel-vaulted ceilings and a large cupula in the center.

Behind its altar, in the apse, is one of the most spectacular, over-the-top sanctuary adornments we have ever seen.

There is so much gold leaf over so many decorative elements, sparkling, shining, reflecting light in every direction; it takes your breath away.

Spain First

Salta had never seemed like an attractive city.

But yesterday, we were surprised. After mass, we stopped for coffee at one of the outdoor cafes on the plaza.

The arcaded square – with the cathedral on one side and the town hall on the other – was splendid. In the center was a park with palm trees, green grass, and a huge granite monument.

Couples necked on the benches and families with young children strolled by. Nearby, a blind accordion player gave us fine renditions of tango favorites. The weather was perfect.

The museum is large with collections focused on three periods.

There is the pre-Hispanic period, with clay pots, arrowheads, and petroglyphs, some thousands of years old. Then there is a display of the colonial period followed by one of the War of Independence.

It was the colonial period we found most interesting. In particular, one room showed us samples of money used in the colonies and explained a bit about how the economy of the era worked.

We learned two things that may be of interest.

First, phony money always causes problems.

Second, “Spain First” didn’t work well back then, either.

Motley Crew

To put these insights in perspective…

Francisco Pizarro and his army had butchered 2,000 Inca in the Battle of Cajamarca in 1532.

But his motley crew of adventurers and desperadoes were soon at each other’s throats, jealous of each other’s booty, fame, or honors.

Six years later, Pizarro defeated his former partner Diego de Almagro in battle… and had him garroted and then beheaded. Later, Almagro’s followers assassinated Pizarro.

The best way to deal with this restless and murderous energy was to channel it into more exploration and conquest. There were more cities of gold to be found, they believed… and so they set out.

In 1582, Salta was founded by Spanish conquistador Hernando de Lerma. The Inca had conquered this area of present-day Argentina about 100 years before the Spanish arrived.

Rather than reconquer it, the Spanish simply took over from the Inca, leaving the locals as vassals. Other conquistadores romped through what is today Peru, Bolivia, and Chile, leaving the Spanish crown with a vast empire in the New World.

The immediate and obvious effects were beneficent. Longer-lasting and less obvious consequences were not. Especially when the Spanish made their Trumpish policy decisions.

Gold Mine

The New World was literally a gold mine for the Spanish crown.

Pizarro demanded the Inca fill a room about 22 feet long, 17 feet wide, and 8 feet high with gold, and twice with silver, over several months as the price for letting the captive Inca emperor, Atahualpa, go free.

The Inca dutifully filled up the room. But Pizarro had Atahualpa strangled anyway.

The first ships, riding low in the water with heavy cargoes of gold and silver, were not long in leaving for the royal treasury in Spain.

Free money, like free love and free booze, is thrilling – at first. The headaches come later.

The gold, arriving from the New World, greatly increased the money supply in the old one. Prices rose, slowly, all across Europe… with the general price level up 500% from 1550 to 1700.

In Spain, though, the damage was much greater. The free money made many of richest and best-connected families richer still – without additional work or effort.

Without producing anything, they were then able to buy goods and services. Economic historians claim that this led to a decline in Spain, leaving it the “poor man of Europe” for the next 300 years.

As Spaniards became accustomed to the influx of new money, they needed more and more of it to keep up with rising prices.

According to the museum in Salta, this led them to squeeze every ounce of gold… and later silver… from their colonies.

So although Spain soon had too much money, Salta had too little. This forced the royal governors to operate an economy without real money. Instead, it declared base metals – copper, iron, etc. – as “money.”

The short explanation alongside the display of colonial coinage describes the results: The phony money did not provide accurate and stable price information; it did not give people a way to preserve and protect their wealth; “it created much confusion and many errors.”

In short, it did what the credit-based U.S. dollar has done since the 1970s. You could buy the average house in 1970 for about $25,000. Now, it’s about $200,000 – seven times more.

Plus, the phony dollar has distorted the rest of the economy, created bubbles, misdirected investments, and wasted valuable time and resources…

Nothing new there, in other words…

Inevitable Consequences

The other thing that greatly retarded economic progress in the Spanish colonies was the “Spain First” policy.

Then, like now, the crown and the cronies thought they could gain an advantage by forcing people to trade on their terms. They wanted win-lose deals, with themselves as the winners.

So they set up a monopoly on trade with the colonies – carefully controlled so that only Spain (and its insiders) could benefit.

This, too, led to the inevitable consequences.

The museum commentary tells us that all trade had to be funneled through specific ports, such as Buenos Aires, where it was approved and taxed by royal administrators.

Shortages, delays, and higher prices on both sides of the trade resulted. It also helped create an entire industry whose purpose was to dodge the regulations.

Foreign ships, foreign entrepreneurs, and foreign bankers were soon gaming this system, establishing their own system of contraband commerce.

“Spain First” slowed economic growth in the Spanish colonies. But it probably sped up the development of Britain’s hustling merchant fleet.

Avalanche Notes: Bill believes these same “easy money” policies and insider deals will have the same fate for the U.S. He is so adamant about the disaster that’s coming, he writes daily posts on Bonner & Partners to help you prepare for the consequences of decades of reckless Fed policies.

An Amazingly Simple Investing Strategy

We don’t do real stock analysis.

We just look for Really Simple Patterns (RSPs).

The simplest we’ve discovered so far: If a market is cheap now, it will probably be less cheap before you get around to investing in it. If it is very expensive, it will probably be less expensive before you get out.

Simple Strategy

This RSP came to mind when Bonner & Partners analyst Chris Mayer, who advises us on our family portfolio, reminded us how much money we made on his latest recommendation.

For our family account, we keep one portfolio made up of country stock market ETFs. We select the countries based on this RSP: We look for the cheapest ones.

As recently as March 30, Chris advised us to put money into five cheap country stock market ETFs. And yesterday, imagining our delight, he sent us the following email update:

Amazing, it’s such a simple a strategy and yet works so well…

So far (since March 30), you are up almost 10% in Turkey, almost 9% in Spain, 8% in Italy, and 5% in South Korea. The only downer is China, down 1%.

Overall, you’re up over 6%… since March.

The only trouble is… we never got ourselves together to make the investment. And on April 15, we suddenly needed the money we had set aside for it to pay the IRS.

Trade of the Decade

But let’s look at another trade, our Trade of the Decade.

This had nothing to do with careful analysis, study, or insight. Just another RSP: Markets that go down for a long time have a good chance of going back up over the next 10 years.

At the debut of the 21st century, we had no trouble identifying a promising setup. Gold had been going down, more or less, for nearly two decades. U.S. stocks had been going up.

So our Trade of the Decade was simple: Sell stocks, buy gold.

It turned out that both sides went our way. Between 2000 and 2010, gold rose about 143%, making it the best-performing major asset class of the decade. And the S&P 500 fell about 25%.

Our next Trade of the Decade was not so simple.

By 2010, gold was no longer a bargain. And U.S. stocks had been beaten down by the 2008 crisis. There was little to be gained by squeezing that orange any further, we reasoned.

What then?

Goofy Program

By the second decade of the 21st century, Japanese stock prices had been falling for 20 years.

Japanese government bond prices, on the other hand, had gone nowhere but up. Why not bet on a reversal?

And so we did in our new Trade of the Decade: Sell Japanese bonds, buy Japanese stocks.

This was based on two other RSPs: (1) Markets that go down a lot tend to go up a lot later, and (2) over time, governments will always destroy the value of their paper currencies.

How has it done so far?

Well, before we get to that, we would like to thank the Japanese government – or, more specifically, the Bank of Japan (BoJ) – for this result.

The Japanese feds have worked tirelessly to boost prices on their stock exchange and send investors fleeing from their bond market.

Why?

It’s just part of their goofy program that is supposed to improve the economy. If they can get the rate of inflation up, they will devalue the yen and make Japanese exports more competitive.

This, in turn, will improve exporters’ sales… leading them to buy more, hire more, and stay in line behind the ruling party.

Claptrap Policies

Accordingly, the familiar claptrap policies were brought on stage.

Shinzō Abe, the country’s prime minister, explained how more “stimulus” – both fiscal and monetary – would surely light a fire under the economy.

It did not. Instead of falling, the yen rose, leaving the Japanese economy soggier than ever.

It must have been then that Mr. Abe and the BoJ decided to go full retard.

They wouldn’t wait for Japanese companies to sell more products and earn more profits. They would simply buy stocks themselves.

Financial blog Zero Hedge:

A year ago, we noted that The Bank of Japan (BoJ) was a Top 10 holder in 90% of Japanese stocks. In December, we showed that BoJ was the biggest buyer of Japanese stocks in 2016. And now, as The FT [the Financial Times] reports, the real “whale” of the Japanese markets is stepping up its buying (up over 70% YoY [year over year]), entering the market on down days more than half the time in the last four years.

Since the end of 2010, The FT notes that the BoJ has been buying exchange traded funds (ETFs) as part of its quantitative and qualitative easing programme. The biggest action began last July, when its annual acquisition target was doubled to ¥6 tn [$8.7 billion].

Since then, the whale designation has seemed pretty obvious: the central bank swallows a minimum of ¥1.2 bn [$10.5 million] of ETFs every single trading day (tailored to support stocks that further “Abenomics” policies), and lumbers in with buying bursts of ¥72 bn [$632.5 million] roughly once every three sessions.

Since the Bank of Japan began this program, investment bank Nomura estimates that it has boosted the Nikkei 225 Index – Japan’s equivalent of the S&P 500 – some 1,400 points.

Thank you very much.

So how are we doing?

Since the start of 2010, the Japanese stock market is up about 33% in U.S. dollar terms… and about three times as much for yen-based investors. As for Japanese government bonds, they have not cooperated.

Try as he may, Shinzō Abe has still not been able to destroy his nation’s currency or degrade its credit.

But we will not despair. The Trade of the Decade still has three years to run. And Mr. Abe is still trying!

Avalanche Notes: Bill believes these same “easy money” policies and insider deals will have the same fate for the U.S. He is so adamant about the disaster that’s coming, he writes daily posts on Bonner & Partners to help you prepare for the consequences of decades of reckless Fed policies.

Being Warren Buffett

Quick … who said, “It’s a huge structural advantage not to have a lot of money”?

If you guessed Warren Buffet, congratulations. Of course, I tipped my hand in the subject line, but I want to let that statement sink in.

When we compare ourselves to someone of Buffett’s stature, it’s easy to focus on the huge advantages he has over the rest of us.

None of us are ever likely to have as much money as Buffett. Buffett is never under any pressure to sell. He has money to buy when the time is right. And he can buy investments that we can never own.

Yet, Buffett himself says small investors have an advantage!

Here’s another quote from the same speech:

“The highest rates of return I’ve ever achieved were in the 1950s… I think I could make you 50% a year on a million. No, I know I could… I guarantee that.”

Now, maybe you don’t have a million. Maybe you’ve only got 5 or 6 figures to play with.

If you knew Buffet started with $5,000, how would that change your ideas of what’s possible?

Instead of looking at how much money Buffett manages, focus on how he manages his money. He still manages his money the same way that we can manage our money. And you have a huge advantage over the young Warren Buffett… You have TradeStops!

Here’s how you can use that advantage to model Buffett’s portfolio management style.

Confidence

TradeStops tools give you the confidence to stay invested in stocks that are trending higher and sell when the uptrend is no longer in effect.

A good example of this is available in the shareholder letter that Buffett just released this past weekend. In that letter, he told of a bet he had with an institutional money manager. He wagered a million dollars that the average individual investor could outperform a group of hedge fund managers.

The wager was for a period of 10 years beginning January 1, 2008 and finishing on December 31, 2017. Buffett has already declared victory as the returns for the first 9 years of the Vanguard S&P 500 fund (VFIAX) have greatly outperformed the returns of the hedge funds.

TradeStops members could have done better!

This chart shows you the returns of the Vanguard S&P 500 fund that Buffett recommended. The black line is the original performance. The blue line shows how TradeStops’ tools would have performed by trading the exact fund using the Stock State Indicator (SSI) signals.

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Using the TradeStops SSI signals would have resulted in a gain of 25% more than the gain of the S&P 500 fund itself.

Manage Risk

Warren Buffett is able to manage his risk through a multi-year process of examining companies and deciding what the right price is to buy them.

TradeStops members can manage the risk in their portfolios on two levels. First they can see the risk of the individual stocks they own through the Volatility Quotient (VQ).

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They can then see the amount of risk that these stocks have as an overall portfolio through the Portfolio Volatility Quotient (PVQ).

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Get the Signals

As an individual investor, you can enjoy the same agility that Warren Buffett displayed in his early 20s, when he was banking 60% per year. That’s because you don’t have to take weeks or months to enter or exit a position. The SSI Signals tell you the optimal time to get into a stock and exactly the best time to exit that stock.

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And these are the exact trades that would have occurred. There were two SSI Entry signals and, so far, only one SSI Stop signal.

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Managing investments is not easy. Even Warren Buffett admitted that he doesn’t know when his stocks will go up. He just knows that if he’s patient, they will move higher.

TradeStops members can be patient as well. There is no need for excessive trading that can increase costs and decrease the overall returns.

Being like Buffett means risking less, and making more.

About the Author: Richard Smith

Dr. Richard Smith, the founder and CEO of TradeStops, earned a PhD in Math and Systems Science, and even he had to learn the hard way that it takes more than intelligence to win in the game of investing. He has spent the last 10 years researching and developing algorithms and services that give individual investors the tools they need to succeed. With his background in mathematical theories of uncertainty combined with his own investing and trading experience, Dr. Smith understands risk management and how to use it as a self-directed investor to master the market.

Is Microsoft Overvalued?

Summary

  • Microsoft stock has been on a nearly unimpeded rally over the past two years and has beaten the S&P by a wide margin.
  • But in this time, Microsoft’s earnings haven’t grown much at all. Earnings growth is weighed down by declining margins, the strong U.S. dollar, and slowing emerging market growth.
  • At 19 times forward earnings, Microsoft stock is valued at levels not seen in years. As hard as this is to say, I think Microsoft is overvalued right now.

Tech giant Microsoft (NASDAQ:MSFT) has traditionally been one of the cheapest blue chip tech stocks. For many years, Microsoft was dogged for its over-reliance on the personal computer, and this pervasive bearishness kept its valuation multiples at low levels, frequently in the low double-digits.

That is, until recently. Thanks to the advancements Microsoft has made in growth areas like the cloud, investors have rewarded the stock with a lofty valuation multiple.

After a prolonged period of trading in a relatively tight range, Microsoft stock is up 26% in the past year, while the S&P is down 5% in the same time. Investors have recently become very enthusiastic about the future growth possibilities, but the reality is that Microsoft’s earnings growth hasn’t kept up with rising expectations. The result is that at this point, Microsoft trades for a higher valuation than it has at any point in the past five years.

I wrote about Microsoft several times in the past year, including this article in April and this article in July, in which I advised investors to buy the stock because of how cheap it was. Microsoft has performed strongly since those recommendations. Now that the stock is at $52, it’s no longer cheap. I believe buying at this level will set up investors for only mediocre annualized returns going forward. I can’t believe I’m saying this – but Microsoft appears overvalued.

Earnings Aren’t Keeping Pace With The Stock Price

To be sure, Microsoft is no longer the same company that traded for a 10-12 forward P/E. It has made demonstrable progress in breaking away from the PC, and has made huge inroads into higher-growth areas. Due to the success of cloud-based platforms like Office 365 and Azure, Microsoft’s commercial cloud revenue soared 96% in the fourth quarter of fiscal 2015, and has now exceeded an $8 billion annual run rate. Microsoft’s revenue growth in recent years has been impressive: the company grew revenue by 7.8% in fiscal 2015, and by 11% in fiscal 2014.

The problem is that Microsoft has had to spend increasing amounts of money to obtain this revenue growth. This has weighed on Microsoft’s margins and the result has been weak, almost non-existent earnings growth. Even when excluding the billions in impairment charges taken against GAAP earnings in the past few years, Microsoft’s adjusted non-GAAP earnings have flat-lined. For example, Microsoft earned $2.62 per share in 2013, $2.64 per share in 2014, and $2.63 per share in 2015.

Microsoft hasn’t gotten off to the best start in fiscal 2016 either. Revenue declined 6%, while earnings grew just 3% in the first quarter, year over year. Microsoft is getting hit by many of the same headwinds that are causing other tech stocks to plummet – namely, the strengthening U.S. dollar – and slowing economic growth in emerging markets like China. But while most other tech stocks are declining to reflect these challenges, Microsoft shares keep rallying. That should be a concern to investors buying at these levels.

Microsoft has beaten the S&P 500 by 37 percentage points in the past two years, despite virtually no earnings growth in that time. That has elevated Microsoft’s valuation to levels not seen in years. At 19 times forward earnings, expectations are simply too high. The other adverse effect of Microsoft’s bloated valuation is that it has lowered the dividend yield, to 2.5%. In other words, investors aren’t getting a very good buying opportunity at this price, either from a value or income perspective.

Microsoft: Good Company, Not-So-Good Stock

What made Microsoft such a compelling buy in my previous articles – its dirt-cheap valuation and 3%-3.5% dividend yield are no longer there. Microsoft remains a highly profitable company. But there are many cases in which a strong company can amount to a poor investment if too high a price is paid for its future earnings growth.

The great thing about buying great companies when they’re cheap is that the future expectations are so low that the company doesn’t have to get everything right in order for investors to earn decent returns. That’s why Microsoft stock was a much better buy when I wrote about it in previous articles. Expectations were very low, and the dividend yield was much higher, which meant the future return potential was greater. However, the flip side of this dynamic is also true: Microsoft now has higher expectations than at any point in the past five years.

At 19 times forward earnings, I believe the stock doesn’t offer much of a margin of safety. As a result, I’d wait for a decent pullback of 10%-20% – at least to a forward P/E multiple in the mid-teens – before jumping in.

Disclaimer: This article represents the opinion of the author, who is not a licensed financial advisor. This article is intended for informational and educational purposes only, and should not be construed as investment advice to any particular individual. Readers should perform their own due diligence before making any investment decisions.

The above article originally appeared on Seeking Alpha, written by Bob Ciura.