Archive for May, 2015
Are things getting a little too rich in the venture capital world? After all, companies like Uber are reaching $50 billion valuations. Shah says that can only mean one thing – a tech bubble… of sorts. On his latest appearance on Fox Business, Shah predicts just how big this bubble will get before it pops – and explains how it’s different from the dot-com bubble of the late 1990s.
Before he signed off, Shah tackled a few more big questions about some “luxury” stocks. Tiffany & Co. (NYSE: TIF), Michael Kors Holdings Ltd. (NYSE: KORS) and Tesla Motors Inc. (Nasdaq: TSLA) – which is a buy and which is overpriced?
Find out his answers in this video.
Water doesn’t flow uphill.
It’s a lesson in physics so basic that even schoolkids know it.
In fact, everyone knows it…
Everyone except – apparently – the world’s central bankers.
In their rush to provide liquidity to banks through experimental stimulus programs like “quantitative easing,” central banks have failed to create the usual cascade of liquidity normally associated with massive money-printing shenanigans.
Indeed, by attempting to force-flow money uphill, liquidity in the all-important bond markets essentially has been drying up. Central banks have been taking bonds out of circulation, warehousing them on their own balance sheets.
As a result of this attempt to defy the laws of financial physics, we’re now frighteningly vulnerable to a bond-market crash. And the best potential remedy – opening the sluice gates – can’t be employed because liquidity isn’t in the reservoirs where it’s needed.
Today I’m going to show you how this financial-market Disruptor came into being. I’m also going to explain how ruinous it could be to the economy, to the bond market, to the stock market and to you.
I’m also going to show you how to turn this expected “Disruption” to your advantage – to make money from it…
Just about every investor knows about the stock-market “Flash Crash.”
Even though it happened all the way back on May 6, 2010, this historic sell-off has been all over the news lately as U.S. regulators try to extradite a small-time London-based trader they’ve identified as the cause.
That’s rubbish. Stocks don’t crash because one trader put down bunches of “sell” orders.
But today I want to tell you a story… about another Flash Crash.
It was bigger and more frightening than the 2010 Flash Crash.
It happened a lot more recently – in October 2014.
But most investors know nothing about it.
And they need to.
This “other” Flash Crash is another example of the lack of market liquidity we’ve been telling you about lately.
It’s a market Disruptor – one that can sting you badly if you don’t know about it… or make you rich if you do….
[Editor’s Note: In today’s Wall Street Insights & Indictments, Shah warns that liquidity has reached dangerously low levels. Read his analysis with care. On April 15, 2010, Shah publicly issued a similar warning. Three weeks later, the markets experienced the “Flash Crash” – the biggest intraday market decline in U.S. history.]
Liquidity, the grease that allows the world’s capital markets to function, has been murdered.
It bled to death in the stock market from a thousand nicks and cuts and was suffocated violently in the bond market by the gloved hands of its erstwhile babysitter.
We should be afraid. The murdering henchmen are the regulators and guardians of the stock and bond markets. That they don’t understand what they’ve done is scary enough.
What’s more frightening is how the wheels of both the stock and bond markets could seize and come to a shredding halt at any time.
Investors who don’t want to be murder victims need to examine the evidence.
Here it is, in black and white with red all over.
And in our talks here about market “Disruptors” – the catalysts that change the fortunes of companies, markets and our own financial futures – the lack of liquidity is one of the biggest, and most troublesome, change agents we’re watching for you…
Shah says General Electric Co. (NYSE: GE) just made a “wrong move” – but it’s not the move you’re thinking of. On his latest appearance on Fox Business, Shah said that things are looking glum for the industrial giant.
After spinning off a $5 billion Japanese credit operation, GE stock is destined to tumble, Shah says.
How low does GE need to fall before you should pick up shares? Shah shares his opinion on that, too.
Click here to watch the video.
Over the last several weeks, I’ve been telling you about “Disruptors,” the economic catalysts that are serving as agents of change in every geographic market, business sector and asset class you can think of.
These Disruptors create winners in some situations, and dislocations in others. And every change brings with it identifiable profit plays.
And if there’s one Disruptor story that has dominated the headlines – and the global financial markets – over the past two decades… it’s China.
With its low wages and economic emergence, China disrupted the manufacturing markets for technology products, the pricing for rare earths, and shifts in demand for energy, food and capital.
The upshot: China, the Disruptor, became China, the wealth creator.
If this talk of wealth seems out of place after I’ve spent the last several weeks talking about making money when markets go down, think again…
Nothing, you see, goes up forever.
Not even China.
Sure, China’s economic growth has been astronomical, and the Shanghai Stock Exchange Composite Index has skyrocketed.
But the laws of gravity haven’t been repealed.
China’s gross-domestic-product (GDP) growth has already cooled off, and stocks took an 8% hit early last week.
While this may not be the beginning of the end for the Chinese economic miracle – and its pumped-up stock market – it could be.
Then again, a lot of analysts and famous short-selling hedge-fund honchos have been calling for a hard landing in China, which hasn’t happened. Still, that doesn’t mean they’re wrong. It just might mean their timing is off.
Here’s what’s scary about what’s going on in China…
I’ve been telling you about market “Disruptors” for several weeks now, and showing how these “agent-of-change” catalysts are the trigger points for some of the greatest profit opportunities you’ll find.
But that’s only part of the message I’ve been emphasizing to you in our get-togethers here.
I’ve also urged you to keep your eyes open for all profit opportunities – on both the “long” side of the market… as well as on the “short” side.
Using all the opportunities that come your way is a belief I’ve held my entire career, and it’s why my personal mantra is “There’s always a place to make money – always.”
One of those places is on the short side.
And one of the tools to use is the “put” option.
Used correctly, put options can make you a bundle.
And today we’re going to add that tool to your arsenal…
It’s all about the cloud.
Salesforce.com Inc. (NYSE: CRM) is one of the best in that game. So it’s no surprise that, during his latest appearance on Fox Business, Shah predicted an even brighter future for Microsoft Corp. (Nasdaq: MSFT) if it does indeed acquire Salesforce.
However, a big question remains. Would a Microsoft-Salesforce merger finally push Mr. Softy over $65?
Click here to watch the video.
It’s easy to make money when stock prices are rising.
Just invest in one of the 5,000 stocks listed on major exchanges or one of the hundreds of exchange-traded funds (ETFs) that are already available – with more being added almost every day.
But if you want to make money when the stock market goes down, it’s just as easy.
Maybe even easier.
Just buy shares in one or all of the four “investments” I’m going to tell you about today…