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MHFTR

The Passing of a Great Man

Diary, Newsletter

It was with a heavy heart that I boarded a plane for Los Angeles a few years ago to attend a funeral for Bob, the former scoutmaster of Boy Scout Troop 108.

The event brought a convocation of ex-scouts from up and down the West Coast and said much about our age.

Bob, 85, called me two weeks prior to tell me his CAT scan had just revealed advanced metastatic lung cancer. I said "Congratulations Bob, you just made your life span."

It was our last conversation.

He spent only a week in bed, and then was gone. As a samurai warrior might have said, it was a good death. Some thought it was the smoking that he quit 20 years before.

Others speculated that it was his close work with uranium during WWII. I chalked it up to a half century of breathing the air in Los Angeles.

Bob originally hailed from Bloomfield, New Jersey. After WWII, every East Coast college was jammed with returning vets on the GI Bill. So, he enrolled in a small, well-regarded engineering school in New Mexico in a remote place called Alamogordo.

His first job after graduation was testing V2 rockets newly captured from the Germans at the White Sands Missile Range. He graduated to design ignition systems for atomic bombs. A boom in defense spending during the 50s swept him up to the Greater Los Angeles area.

Scouts I last saw at age 13 or 14 were 60 at the time of the gathering, while the surviving dads were well into their 80s. Everyone was in great shape, those endless miles lugging heavy packs over High Sierra passes obviously yielding lifetime benefits.

Hybrid cars lined both sides of the street. A tagalong guest called out for a cigarette and a hush came over a crowd numbering more than 100.

Apparently, some things stuck. It was a real cycle of life weekend. While the elders spoke about blood pressure and golf handicaps, the next generation of scouts played in the backyard or picked lemons off a ripening tree.

Bob was the guy who taught me how to ski, cast for rainbow trout in mountain lakes, transmit Morse code, and survive in the wilderness. He used to scrawl schematic diagrams for simple radios and binary computers on a piece of paper, usually built around a single tube or transistor.

I would run off to Radio Shack to buy WWII surplus parts for pennies on the pound, and spend long nights attempting to decode impossibly fast Navy ship-to-ship transmissions. He was also the man who pinned an Eagle Scout badge on my uniform in front of beaming parents when I turned 15.

While in the neighborhood, I thought I would drive by the house in which I grew up, once a modest 1,800-square-foot ranch style home to a happy family of nine. I was horrified to find that it had been torn down, and the majestic maple tree that I planted 40 years ago had been removed.

In its place was a giant, 6,000-square-foot marble and granite monstrosity under construction for a wealthy family from China.

Profits from the enormous China-America trade have been pouring into my hometown from the Middle Kingdom for the past decade, and mine was one of the last houses to go.

When I was class president of the high school here, there were 3,000 white kids, and one Chinese. Today those numbers are reversed. Such is the price of globalization.

I guess you really can't go home again.

At the request of the family, I assisted in the liquidation of his investment portfolio. Bob had been an avid reader of the Diary of a Mad Hedge Fund Trader since its inception, and he had attended my Los Angeles lunches.

It seems he listened well. There was Apple (AAPL) in all its glory at a cost of $21. I laughed to myself. The master had become the student and the student had become the master.

Like I said, it was a real circle of life weekend.

 

Scoutmaster Bob

 

 

The Mad Hedge Fund Trader at Age 11 in 1963

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MHFTR

July 11, 2018 - Quote of the Day

Diary, Newsletter, Quote of the Day

"Outsourcing is quickly becoming mostly outdated as a business model," said former GE CEO, Jeffrey Immelt.

John Travolta

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MHFTR

July 10, 2018

Diary, Newsletter

Global Market Comments
July 10, 2018
Fiat Lux

Featured Trade:
(TRADING THE KENNEDY ASSASSINATION)

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MHFTR

July 10, 2018 - Quote of the Day

Diary, Newsletter, Quote of the Day

"Ask not what your country can do for you, but what you can do for your country," said John F. Kennedy, America's 35th president.

 

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MHFTR

July 9, 2018

Diary, Newsletter

Global Market Comments
July 9, 2018
Fiat Lux

Featured Trade:
(DIAMONDS ARE STILL AN INVESTOR'S BEST FRIEND),
(SO, YOU THINK THEY'RE NOT WATCHING YOUR PC?)

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MHFTR

Diamonds Are Still an Investor's Best Friend

Diary, Newsletter

If you forgot to buy your loved one a birthday present and spent a week sleeping on the sofa eating canned food, and cleaning out the cat box, you now have a chance to redeem yourself.

A revolutionary new website exists called Mazal Diamond, which promises to turn the online jewelry business upside down. I went to the privately held company's website and found an entertaining assortment of free tools.

You can design your own jewelry, and even order a custom cut, which Mazal will supply out of its massive 100,000 stone inventory. You can also figure out if the jeweler down the street is trying to rip you off.

Just for fun, I appraised the diamond I bought for my late wife, which I bought from a Hasidic Jew in an alley off of Manhattan's West 47th street. He kept his inventory hidden in an envelope in his sock.

How times have changed!

The two carat, VVS1, round cut, yellow diamond that I paid $3,000 for in 1977, would fetch $39,800 today. Great trade!

Mazal Diamond's game-changing advantage is that they cut, design, and manufacture their own jewelry, enabling them to undercut prices offered by established industry leaders.

In fact, the $30-billion-a-year diamond industry is undergoing radical change by moving online, much the same way as the book, music, and travel industries have gone. Your local neighborhood jewelry store is about to get wiped out or become a quaint relic.

Blue Nile (NILE) pioneered the way, and instantly became the 800-pound gorilla. The company cut costs by keeping inventories low, relying instead on a secretive web of anonymous suppliers.

Now, second-generation entrants are snapping at its heels and eating its lunch with polished websites, better service, and lower prices, seducing potential customers with free diamond blogs. Mazal Diamond even offers a year of free insurance.

It is getting a boost from a 50% price gain, a woman's best friend has seen since the March 2009 stock market bottom, taking it back to pre-crash levels.

The U.S. accounts for about half the world market, so the new frugality will be a challenge. That will be offset by flight to safety purchases by inflation wary Americans, and new demand from the emerging market middle class.

Investment grade diamonds have been steady earners, gaining an average 5% a year over the past three decades. To avoid another week on the sofa, you might even think about buying next year's Valentine's surprise early. Now.

 

 

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MHFTR

So, You Think They're Not Watching Your PC?

Diary, Newsletter

Hey! You there, staring at this monitor. This is your PC talking to you. No, not you over there standing in the background. I'm talking to the guy sitting in front of me poking at my keys. Ouch! That one hurt!

So, you thought no one was watching, did you? Let me set you straight. About a month ago you clicked on a certain website, and I installed myself as a cookie on your computer, which is an innocuous little text file that you can't see.

Since then, I have been tracking your every move, recording websites you clicked on, the pages you visited, and the stuff you ordered. I then used this handy little algorithm to build a profile of exactly who you are. I now know you better than your own mother. In fact, I know you better than you know yourself.

For example, I am aware that you make more than $250,000 a year, live in a posh zip code in San Francisco, belong to a fancy country club, and drive a Mercedes. You donate to Republican political causes, send your kids to a prestigious private school, and bill it all to an American Express Platinum Card. Did I leave anything out?

Because I know every detail of your life, down to your inside leg measurement, I am able to harness the power of this machine to more precisely service your every need. That includes directing advertising to you, on which you have a high probability of clicking.

The more you click on my ads, the higher prices I can realize for those ads. The ad campaigns you now see are unique to your own personal computer because they are tied to your IP address. My program, called "behavioral targeting" is the next "big thing" in online advertising. It's all part of the brave new world.

I see you have been shopping for a new car. Check out the new Hyundai, which offers the same quality as your existing ride, at half the price.

Your clicks this morning suggest you're taking your "significant other" out to dinner tonight. Might I suggest Gary Danko's on Bay Street? The rack of lamb is to die for there.

Your visits to Travelocity and Expedia tell me you're planning a vacation. I bet you didn't know you can find incredible deals in Las Vegas. Thinking about buying a condo there? They'll even pay for the trip if you promise to check one out while you're there.

Since we're chatting here mano a mano, I noticed that that last pair of jeans you ordered from Levi's had a 42-inch waist, up from the 40 in your last order. Better lay off those cheeseburgers. Pretty soon, they'll be calling you "tubby" or "fatso." Better visit Weight Watchers soon, or the legs on that chair might buckle out from under you.

Worried about privacy? Privacy, shmivacy. There hasn't been privacy in this country since the first Social Security number was handed out in 1936. And don't expect any relief from Congress. I doubt half those dummies even know how to turn on their own PCs.

Don't even think about trying to delete me. I'm a "flash cookie," an insidious little piece of code that reinstalls every time you try that. Think of me as a toenail fungus. Once you catch me, I'm almost impossible to get rid of.

I hope you don't mind, but I've been passing your personal details around to some of my buddies at other websites. That's why when you clicked on NFL you got deluged with product offers from your local team, the San Francisco 49ers.

I've got friends at Google and Facebook, and pretty much everywhere. Can I help it if I'm a popular guy? I bet the view from those 50-yard seats is great, isn't it?

I noticed that your spending habits don't exactly match with the income you reported on your last tax return. Do you think the IRS would like to know about that? I bet you didn't know the agency offers a 10% reward for turning in tax cheats.

How about those triple XXX DVD's you bought last week? Whoa! Hot, hot, hot! I hope your employer never finds out about those. It might not go down too well at your next performance review.

I thought it was lovely that you bought your spouse a two-carat, yellow, VVS1, round-cut diamond ring for $26,000 from Blue Nile for your 30th wedding anniversary.

But who is Lolita, the Argentine firecracker, in Miami Beach? Does the old wifey know you sent her a $2,000 pair of diamond stud earrings? What's it worth to you for me to keep mum on this? Maybe you should take a quick peak at 3StepDivorce.com and see what you're in for?

Nah, I'm just pulling your leg. This is all just between friends, right? Think of it as a doctor/patient relationship. I'll tell you what. See that leaderboard ad at the top of the page? Just click on that and we'll call it even. Ooh, that felt good! Click it again. Oh, baby! Not too many times. You'll trigger my anti-click fraud program.

Now you see that wide skyscraper add over on the right? Click on that, too. Oh baby! Click it again! And there's a little button ad at the bottom of the page. No, not that one. A little lower. What was that little cutie's name in Miami again? Ah.

 

 

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MHFTR

July 9, 2018 - Quote of the Day

Diary, Newsletter, Quote of the Day

"We are still in the gravitational pull of the Great Recession. I would have to put the likelihood of a double-dip recession now up to 50%," said my old UC Berkeley economics professor, Robert Reich.

 

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MHFTR

July 6, 2018

Diary, Newsletter

Global Market Comments
July 6, 2018
Fiat Lux

Featured Trade:
(BE CAREFUL WHO YOU SNITCH ON),
(COULD YOU QUALIFY TO BECOME A U.S. CITIZEN?)

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MHFTR

Be Careful Who You Snitch On

Diary, Newsletter

Buried in the Dodd-Frank financial reform bill are massive financial rewards for turning in your boss. The SEC is hoping that multimillion-dollar rewards amounting to 10% to 30% of sanction amounts will drive a stampede of whistle-blowers to their doors with evidence of malfeasance and fraud by their employers.

If such rules were in place at the time of the settlement with Goldman Sachs (GS), the bonus, in theory, could have been worth up to $500 million. Wall Street firms are bracing themselves for an onslaught of claims, legitimate and otherwise, by droves of hungry gold diggers looking for an early retirement.

Don't count on this as a get-rich-quick scheme. Government hurdles to meet the requirement of a true stoolie can be daunting. The standard of evidence demanded is high and must be matched with the violation of specific federal laws. Idle chitchat at the water cooler won't do. Litigation can stretch out over five years, involve substantial legal costs, and often lead to a non-financial settlement with no reward.

Having "rat" on your resume doesn't exactly look good either. Just ask Sherron Watkins, the in-house CPA who turned in energy giant Enron's Ken Lay, Andy Fastow, and Jeffrey Skilling just before the company crashed in flames. Nearly a decade later, Watkins earns a modest living on the lecture circuit warning of the risks of false accounting, and whistle-blowing.

 

 

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There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

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