Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Hottest Sports Stock Of 2020 - 23rd Sep 19
Stocks Wedge At The Edge – Front And Center - 23rd Sep 19
Stock Market Top Almost Confirmed - 23rd Sep 19
Thomas Cook COLLAPSE! 300,000 Passengers Stranded, Flights Cancelled, Planes Grounded - 23rd Sep 19
Massive Stock Market Price Reversion May Be Days or Weeks Away - 22nd Sep 19
How Russia Seized Control of the Uranium Market - 22nd Sep 19
Dow Stock Market Trend Forecast Update - 21st Sep 19
Is Stock Market Price Revaluation Event About To Happen? - 21st Sep 19
Gold Leads, Will the Rest Follow? - 21st Sep 19
Are Cowboys Really Dreaming of... Electric Trucks? - 21st Sep 19
Gold among Negative-Yielding Bonds - 20th Sep 19
Panicky Fed Flooding Overnight Markets with Cash - 20th Sep 19
Uber Stock Price Will Crash on November 6 - 20th Sep 19
Semiconductor Stocks Sector Market & Economic Leader - 20th Sep 19
Learning Artificial Intelligence - What is a Neural Network? - 20th Sep 19
Precious Metals Setting Up Another Momentum Base/Bottom - 20th Sep 19
Small Marketing Budget? No Problem! - 20th Sep 19
The Many Forex Trading Opportunities the Fed Day Has Dealt Us - 19th Sep 19
Fed Cuts Interest Rates and Gold Drops. Again - 19th Sep 19
Silver Still Cheap Relative to Gold, Trend Forecast Update Video - 19th Sep 19
Baby Boomers Are the Worst Investors in the World - 19th Sep 19
Your $1,229 FREE Tticket to Elliott Market Analysis & Trading Set-ups - 19th Sep 19
Is The Stock Market Other Shoe About To Drop With Fed News? - 19th Sep 19
Bitcoin Price 2019 Trend Current State - 18th Sep 19
No More Realtors… These Start-ups Will Buy Your House in Less than 20 Days - 18th Sep 19
Gold Bugs And Manipulation Theorists Unite – Another “Manipulation” Indictment - 18th Sep 19
Central Bankers' Desperate Grab for Power - 18th Sep 19
Oil Shock! Will War Drums, Inflation Fears Ignite Gold and Silver Markets? - 18th Sep 19
Importance Of Internal Rate Of Return For A Business - 18th Sep 19
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19

Market Oracle FREE Newsletter

How to Invest in the Esports Revolution

Stock Market Profiting from the Unexpected News

Stock-Markets / Stock Market 2017 May 19, 2017 - 04:53 PM GMT

By: Rodney_Johnson

Stock-Markets Every weekday morning I roll out of bed just before 5 a.m.

I sleepwalk to the kitchen, where my coffee-maker on a timer has just finished brewing, and reach for a much-needed cup. Then I flip on the television, and switch between local news and either CNBC or Bloomberg.

As I hate myself every single day for rising so early to exercise, I take note of the weather, any craziness that happened overnight in the Houston area, and the current trends in futures and interest rates.


There’s one thing I typically disregard: whatever the market pundits are discussing.

I don’t believe such people to be dumb, uninformed, or misguided. I’ve worked with many, and they’re among the smartest people I know.

I just can’t reconcile what they say on television with the real world. It’s as if they take what’s going on in the equity markets and then find a way to make it fit with the economic news of the day.

This earnings season is a perfect example.

First-quarter earnings for the companies in the S&P 500 look to be up about 13% over last year. That’s awesome! Based on these numbers, many commentators on my screen claim that equities are not just fairly valued, but are poised to move higher.

With earnings jumping by double-digits, they say, why wouldn’t we be at all-time highs and shooting for the moon?

If this were true, then wouldn’t the opposite be too?

When earnings fell for three consecutive quarters at the end of 2015 and the beginning of last year, shouldn’t the markets have gotten pummeled? Equities took a hit in the first quarter of 2016, no doubt, but bounced back strongly in the following months, even as earnings trailed.

It can’t be GDP growth driving investors to buy more stocks. We’ve just capped another year of plodding 2% growth, and kicked off this year with a whopper of a first quarter, when GDP expanded by 0.7% (and that number is annualized).

The truth is something that we don’t hear in the mainstream media.

Investors have come to expect higher equity prices simply because stocks have risen in the face of bad news for almost a decade. And what choice do they have?

Laughable interest rates, where they earn about the rate of inflation? Or maybe real estate, where, if the market turns, they’ll be stuck in a losing position for years?

By sticking with equities, no matter what data points cross their screens, investors have been rewarded with gains.

So far.

As the equity bubble builds, we’re setting up for a huge surprise, and it won’t be any fun.

Maybe investors will finally sour on tepid growth and bloated debt. Or perhaps they get spooked by the Chinese shell game of state-funded enterprises propping up inefficient businesses as off-the-books debt explodes to trillions of dollars. Maybe the pin that pricks the bubble is the European banking system, where non-performing loans in Italy and Greece make up 19% and 50% of all loans, respectively.

But even negative surprises can offer opportunity.

Just as we have long positions in the Boom & Bust portfolio that benefit as long as the current trend continues, we also have investments that’ll do exceptionally well when the markets roll over.

In short, we’re preparing for the unexpected, which is what every investor should do.

The goal is to earn profits wherever they present themselves, be it on the long side, the short side, or even interest rates. While we expect interest rates to remain low for some time, the normal swings offer opportunities… if you know where to look.

Lance Gaitan has banked profits in the bond market for the last couple of years, but not by clipping coupons. Instead, he waits until the markets are extended, with rates moving up or down too quickly, and then invests for a snapback.

The hold time is short, and the gains are impressive.

In one day last March for example, he made close to 70% by trading against overreactions to an upside jobs report and a comment by the New York Fed chair.

Using a program like his can give your portfolio a turbo charge in an otherwise dull market.

As we’ve mentioned in Economy & Markets the last few days, Lance is holding a special free Q&A at 4 p.m. EST tomorrow if you want to know more about what he does.

It’s called “Raiding the Reserve: How to Turn Boring Fed Reports into $1,300 in Four Days,” and he’ll detail how he profits from unexpected reactions to Fed-related news and reports.

Mark it on your calendar here.

No matter what your approach, as we wind up this earnings season and plod our way through what looks to be another quarter of sub-par GDP growth, make sure that you’re not surprised by what’s just around the corner.
Or, better yet, make a plan to profit from the unexpected. Your portfolio will be happy you did. Rodney

Follow me on Twitter ;@RJHSDent

By Rodney Johnson, Senior Editor of Economy & Markets

http://economyandmarkets.com

Copyright © 2017 Rodney Johnson - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rodney Johnson Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules