Rare Red Day

2017 12 19 Red Day pic.twitter.com/BhkIK1e603

— Vic Niederhoffer (@VicNiederhoffer) December 19, 2017

Yellow Day

2017 12 12 Yellow day (stocks up, bonds down). pic.twitter.com/ZsHPMBR611

— Vic Niederhoffer (@VicNiederhoffer) December 12, 2017

Ten Reasons not to Buy Gold

"When you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!"
-- J.L.

1. Interest rates and the price of gold have an inverse relationship and the expected path of future rate hikes are to the upside.

2. Fed funds futures indicate that a rate hike of 25bps is the most likely scenario.

3. The rate of interest rate increases is the highest in ten years.

4. The Fed's main concern is containing potential runaway inflation.

5. Economists suggest that GOP tax bill is inflationary.

6. The infrastructure bill will probably be even more inflationary.

7. A wise man once said that buying gold is a way of going long on fear, and business and consumer confidence have hit all-time highs.The infrastructure bill will probably be even more inflationary.
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8. Bitcoin.

9. Palindrome's protege dumped his gold holdings on the day of the election and we're still trading below the opening price of that week.

10. GLD: After a short run-up during the week beginning Nov 27, bears have resumed full control, taking out key support at 120 and closing below August's lows at 118.48.

Yellow Day

2017/12/08 When prophecy fails. Stocks returned more than either tbonds or gold. pic.twitter.com/mjuYg6MZlN

— Vic Niederhoffer (@VicNiederhoffer) December 9, 2017

Yellow Day

Yellow day, patient stock bulls rewarded, tbonds (and gold) down substantially. Winner of tomorrow more likely among the latter than the former. pic.twitter.com/tMtZaXXk5k

— Vic Niederhoffer (@VicNiederhoffer) December 7, 2017

Quote of the Day

On the importance of determining the type of market one is trading in: 

"I recalled old Partridge’s favourite remark—'Well, this is a bull market, you know'—as though that were tip enough for anybody who was wise enough; as in truth it was."

-- J.L.

Real Cost of a Bitcoin

Bitcoin crossed the $13,000 mark today, up from $11,500 yesterday, as bulls resume control of a temporarily un-shortable market.

That makes the current opportunity cost of owning one bitcoin: 5 S&P 500s, 77 shares of Apple, 60 shares of Exxon Mobile, 240 barrels of oil or 10 ounces of gold.

Quote of the Day

"Observation, experience, memory and mathematics—these are what the successful trader must depend on. He must not only observe accurately but remember at all times what he has observed. He cannot bet on the unreasonable or on the unexpected, however strong his personal convictions may be about man’s unreasonableness or however certain he may feel that the unexpected happens very frequently. He must bet always on probabilities—that is, try to anticipate them."

-- J.L.

Quote of the Day

On the importance of compound interest.

"Life is like a snowball. The important thing is finding wet snow and a really long hill."

-- Warren Buffett

Trump Trade is Fed's Latest Challenge

Less than two years ago, US inflation dipped below 0%, and the Fed's primary concern was avoiding Deflation. Today, its main issue is preventing Hyperinflation.

Average inflation rate YTD: 2.08%

Average inflation rate 2015-16: 0.5%.

A four-fold increase in 11 months.

Overshadowed Bullish Items Over the Weekend

Three bullish news items over the weekend that were overshadowed by Flynn-related fake news:

1. The tax cuts are basically a done deal. The discrepancies between the House and the Senate bill are negligible. The "22%" rumour is false. Both Senate and House versions have the corp rate at 20%.

2. The tax bill effectively scraps the Obamacare individual mandate - which means an uptick in M&A activity. Weak, under-capitalized insurance companies lose the subsidy and are zombies for the most part. Think of those companies as the dead trees and debris that are swept away during a healthy forest fire - the nutrients return to the soil, replenishing the forest.

3. Goldman Sachs raises its 2018 GDP forecast to 4% (Jan Hatzius has a strong forecasting track record).

Anti-Trump, Anti-Bear Market

Note that MSM is now equating bitcoin prices with stock prices, but they neglect to report on bitcoin when stocks close in the red. More agrarian innovation in subtle sweeps at Prez.

the greater the frequency of anti-Prez "stories" on MSM, the higher the spoos. never fails. just pray they keep up the negative coverage.

— Walton McGuinty (@rwalton22) October 5, 2017

Quote of the Day

On judicious manipulation as a form of stock advertisement (see: Square (SQ)):

"It is well to remember a rule of manipulation, a rule that Keene and his able predecessors well knew. It is this: Stocks are manipulated to the highest point possible and then sold to the public on the way down." -- J.L.

Blue Day

Month of Dec begins with blue day. Stocks partially recover from sharp drop, down only 4 at close. pic.twitter.com/CuE1BJm8iQ

— Vic Niederhoffer (@VicNiederhoffer) December 1, 2017