The Trade Alert service of the Mad Hedge Fund Trader ranked as the sixth top-performing hedge fund in the world, according to statistics compiled by Barron's. The Dow Jones subsidiary tallied results of the top 100 funds from a potential global universe of over 10,000. It then ranked results according to their three-year compound annual returns.
The Red Bank, New Jersey based Zais Opportunity Fund Class B came in at number one, with an eye popping 52.39% return? (https://www.zaisgroup.com/about.aspx ). They were followed by Quantedge Global in New York (http://www.quantedge.com/about/overview.php).
I peruse the list when it comes out every quarter to see how my friends in the industry are doing, and to study which strategies are delivering the winning numbers. No surprise that bond managers dominated the ranks, as we are just winding up a 60-year bull market in that once sought after asset class. However, investors in the four funds that employed bond strategies are about to get a rude wake up call, as May was the worst month in that market in many years.
Funds that employed a global macro approach, as I do, were catapulted to the top by correctly betting on Japan. This has been one of the toughest strategies to execute in recent years, as the massive liquidity provided by the Federal Reserve so grievously separates international assets from their fundamentals. Many such funds have been getting killed by their short positions in equities this year. Two funds in the Barron's table executed specialized niche strategies in asset-backed strategies, while one focused on distressed securities.
As of last week, the Trade Alert Service of the Mad Hedge Fund Trader boasted an enviable averaged annualized return of 35.50%. My own biggest earnings of the year have been in short yen, short gold, and long US equities. Followers have been laughing all the way to the bank (click here for the link to the testimonials).
Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011 and 14.87% in 2012. The service includes my Trade Alert Service, daily newsletter, real-time trading portfolio, an enormous trading idea database, and live biweekly strategy webinars. To subscribe, please go to my website at http://madhedgefundradio.com, find the "Global Trading Dispatch" box on the right, and click on the lime green "SUBSCRIBE NOW" button.
Trade Alert Service Since Inception
I have just finished leisurely reading Tom Standage's book The Victorian Internet: The Remarkable Story of the Telegraph and the Nineteenth Century On-Line Pioneers.
Standage discusses the creation and development of the telegraph system and how it revolutionized communication in the nineteenth century. The book claims that Modern Internet users are in many ways the heirs of the telegraphic tradition, meaning that how people used the telegraph during the nineteenth century parallels how people use the Internet today.
Standage goes on to suggest that by studying how the telegraph developed and created certain trends in society, we can learn a lot about the challenges, opportunities, and pitfalls of the Internet today. From discussing the social impact of both systems with the development of online social interactions to the way that business and work was revolutionized, the book has it all!
You can laugh about how Victorians flirted and developed romantic connections over Morse code and you can marvel at the way getting more rapid information, particularly with the invention of the stock ticker, allowed financial markets to emerge and grow. If you Bloomberg slaves are looking for an educational and entertaining read, click here to purchase from Amazon.
As part of my never ending campaign to get you to move more money into emerging markets, please take a look at the chart below from Goldman Sachs. It shows that the global middle class will rise from 1.8 billion today to 4 billion by 2040, with the overwhelming portion of the increase occurring in emerging markets.
The chart defines middle class as those earning between $6,000 and $30,000 a year. Adding 2.2 billion new consumers in these countries is creating immense new demand for all things and the commodities needed to produce them. This explains why these countries will account for 90% of GDP growth for at least the next ten years. It's all a great argument for using this dip to boost your presence in ETF's for emerging markets (EEM), China (FXI), Brazil (EWZ), and India (PIN).
Of course, you don't want to rush out and buy these things today. Emerging markets have been one of the worst performing asset classes of the year. But the selloff off is creating a once in a generation opportunity to get into the highest growing sector of the global economy on the cheap. I'll let you know when it is time to pull the trigger.
In the meantime, store this chart in your data base so when people ask why your portfolio is packed with Mandarin, Portuguese, and Hindi names, you can just whip it out.
Global Market Comments
June 18, 2013
Fiat Lux
Featured Trade:
(JULY 2 NEW YORK STRATEGY LUNCHEON),
(THE HIGH OIL MYSTERY), (USO), (UNG),
(SCAM OF THE WEEK),
(DECODING WHAT?S IN YOUR POCKET)
United States Oil (USO)
United States Natural Gas (UNG)
Come join me for lunch for the Mad Hedge Fund Trader?s Global Strategy Seminar, which I will be conducting in New York, NY on Tuesday, July 2, 2013. An excellent three course lunch will be provided. A PowerPoint presentation will be followed by an extended question and answer period.
I?ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. And to keep you in suspense, I?ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $209.
The formal luncheon will run from 12:00 to 2:00 PM. I?ll be arriving an hour early and leaving late in case anyone wants to have a one on one discussion, or just sit around and chew the fat about the financial markets.
The event will be held at a prestigious private club on Central Park South, the details of which will be emailed to you with your purchase confirmation.
I look forward to meeting you, and thank you for supporting my research. To purchase tickets for the luncheons, please go to my online store.
If you want to impress your friends with your vast knowledge of financial matters, then here are the Latin translations of the script on the backside of a US dollar bill.
?ANNUIT COEPTIS? means ?God has favored our undertaking.? ?NOVUS ORDO SECLORUM? translates into ?A new order has begun.? The Roman numerals at the base of the pyramid are ?1776.? The better known ?E PLURIBUS UNUM? is ?One nation from many people.?
The basic design for the cotton and linen currency with red and blue silk fibers, which has been in circulation since 1957, carries enough symbolism to drive conspiracy theorists to distraction. An all seeing eye? The darkened Western face of the pyramid? And of course, the number ?13? abounds.
Thank Freemason Benjamin Franklin for these cryptic symbols, and watch Nicholas Cage?s historical adventure movie ?National Treasure.? The balanced scales in the seal are certainly wishful thinking and a bit quaint if they refer to the Federal budget. Study the buck closely, because there are soon going to be a lot more of them around.
What Did You Really Mean, Ben?
Having trouble raising capital for your new hedge fund? Just list Warren Buffet as your ?Honorary Chairman.? That?s what California prison guard, Ottoniel Medrano, did. To help his marketing efforts, he also claimed that he had $4.8 billion in assets under management as well as massive real estate holdings in Asia.
With this scam, Medrano?s International Realty Holdings managed to raise $700,000 from individuals, which he promptly shipped to offshore bank accounts, before the Feds shut him down.
When you think you?ve heard everything, something like this pops up. Unbelievable. You would think that people have heard of ?due diligence? by now. It all brings back unpleasant memories of Bernie Madoff, now a permanent resident at the federal prison in Butner, North Carolina.
Global Market Comments
June 17, 2013
Fiat Lux
Featured Trade:
(JULY 12 AMSTERDAM STRATEGY LUNCHEON)
(AN ENVIRONMENTAL ACTIVISTS TAKE ON THE MARKETS),
(DBA), (MOO), (PHO), (FIW).
(BUSINESS IS BOOMING AT THE MONEY PRINTERS),
(ON EXECUTING TRADE ALERTS)
PowerShares DB Agriculture (DBA)
Market Vectors Agribusiness ETF (MOO)
PowerShares Water Resources (PHO)
First Trust ISE Water Idx (FIW)
Come join John Thomas for lunch at the Mad Hedge Fund Trader?s Global Strategy Update, which I will be conducting in Amsterdam, The Netherlands, on Friday, July 12, 2013. A three-course lunch will be followed by a PowerPoint presentation and an extended question and answer period.
I?ll be giving you my up to date view on stocks, bonds, foreign currencies, commodities, precious metals, and real estate. And to keep you in suspense, I?ll be throwing a few surprises out there too. Enough charts, tables, graphs, and statistics will be thrown at you to keep your ears ringing for a week. Tickets are available for $229.
The lunch will be held at a downtown Amsterdam hotel near Nieumarkt that will be emailed with your purchase confirmation.
I look forward to meeting you, and thank you for supporting my research. To purchase tickets for the luncheons, please go to my online store.
I spent an evening with Lester Brown, president of the Earth Policy Institute and a winner of the coveted MacArthur Prize, for some long-term thinking about the environment and its investment implications.
Global warming is causing the melting of ice sheets in Greenland and Antarctica, glaciers in the Himalayas, and the Sierra snowpack. Water tables are falling and fossil aquifers are depleting. In the coming decades this will cause severe shortages of fresh water that could lead to crop failures in India and China, where one billion people depend on mountain runoff to irrigate crops, and even California, which delivers 80% of America?s vegetables.
The fresh water inputs in one person?s food and materials consumption works out to some 2,000 liters a day. That is no typo. As a result, all food prices will rise. To head off the greatest threat to the global food supply in human history, we need to cut carbon emissions by 80% before 2020, not 2050, as is being discussed in Copenhagen.
This can only be accomplished by redefining food and the environment as national security issue and launching a wartime mobilization. These difficult goals are achievable. Enough sunlight hits the earth in a day to power the global economy for a year. Texas alone has more than 20 gigawatts of wind power operating, under construction, or planned, enough to take 5% of our 250 coal fired power plants offline. Electricity demand could be cut by 90% purely through greater efficiencies, like switching from incandescent bulbs to LED?s.
Europe could get its entire 300 gigawatt power supply from solar plants in North Africa at current market prices. Cars powered by wind generated electricity would bring fuel costs down to an equivalent 75 cents a gallon, as electric motors are three times more efficient than internal combustion engines.
While Brown?s predictions are a little extreme for many, they mesh perfectly with my long term bullish cases for food and water plays. Take another look at the food sector ETF?s, (DBA) and (MOO), and the water space ETF?s (PHO) and (FIW).
