Articles About Trading & Investing

SoftBank Is Now Paying WeWork for Playing Hard to Get

0 | By Shah Gilani

The whole WeWork saga just keeps getting stranger and uglier, especially for SoftBank, Vision Fund, SoftBank’s $100 billion subsidiary investment vehicle, and Masayoshi “Masa” Son, founder, chairman and CEO of SoftBank and CEO of the Vision Fund.

SoftBank just took control of the floundering WeWork this morning with an almost $5 billion rescue package after the company’s board sought out 75 financing sources in a week, but in the end chose SoftBank’s deal over JPMorgan’s junk bond-based rescue plan.

Too bad for SoftBank, the Vision Fund, Masa Son, WeWork, its investors, and its employees, the rescue package is only a temporary lifeline.

WeWork will need a lot more cash in early 2020.

Here’s what happened to WeWork, who put in how much, how bad the losses are, and what it all says about the slippery valuation game theory practiced by venture capital firms and Wall Street…

Welcome to the New Trade Rally! Kind of…

0 | By Shah Gilani

The Dow and S&P 500 both broke three-week losing streaks last week, and the Nasdaq Composite was up for the second week in a row.

We’re heading back up closer to all-time highs.

The Dow’s only 582 points or 2.12% from Olympus and the S&P’s only 1.9% from its all-time highs. On the other hand, the Nasdaq Comp, the index that’s been higher for two weeks, is 3.5% from Magicland.

So why do I say this is just a “kind of rally” with all this seemingly good news?

Clearly last week was an otherwise down week if not for the one positive lifting market on Friday: trade talks.

This was good news, until it was stripped down and re-rated by market judges.

The reason that the Dow was up more than 500 points but ended up on Friday only 242 points higher was the whole judgement thing.

The U.S. looked like it scored a victory because China agreed to purchase $40 billion to $50 billion in U.S. agricultural products, at least according to President Trump, but the time frame of any purchases wasn’t immediately clear.

Also, China agreed to open its market to international financial services, again according to Mr. Trump, potentially allowing U.S. banks and insurance companies to expand in China: no timetable there either.

China looks like it scored on account of the U.S. not moving forward on Oct. 15 with a planned increase in tariff rates to 30% from 25% on about $250 billion of Chinese goods.

But that’s not all…

Free College, Free Healthcare, and Guaranteed Income Still Come with a High Cost

0 | By Shah Gilani

The old saying is, “there’s no such thing as a free lunch.”

But that’s old school.

The new economic orthodoxy, better known as Modern Monetary Theory (MMT), says that it’s possible.

And not just possible, but a perfectly viable option for the economic prosperity of any nation who does it properly, which sounds a bit pretentious to me.

In fact, according to political advocates of MMT, which Leftist Democrats and honest Republicans will tell you is currently being practiced successfully by the Federal Reserve, MMT makes free college, free healthcare, and even guaranteed income possible, in theory.

Here’s how the theory works in reality, and how reality is MMT’s worst enemy

How You Can Beat the Unicorn Multi-Billion Dollar Valuation Game

0 | By Shah Gilani

If you’ve ever wondered what’s really driving private companies when they don’t report their financials publicly but instead get the word out when their “valuation” reaches a billion dollars, or many times that, well then I’m going to tell you.

Usually, what’s driving the company is “The Valuation Game”.

Sometimes the Game’s real meaning that the company’s valuation is justified.

But, not quite half the time, the Game is so unrealistic that companies’ valuation numbers should be classified as fantasy, not fact.

Here’s how The Valuation Game is played, how investors are getting burned, and how to play to win

Make Money from the Federal Reserve’s Imbecility

0 | By Shah Gilani

It’s impossible to dig yourself out of a hole by digging the hole you’re in deeper, while you’re in it.

Tragically, that’s what the Federal Reserve System’s doing to our economic and capitalist future.

By manipulating interest rates so low for so long, and by extension forcing other central banks to cut interest rates increasingly into negative territory, the Fed’s perverted all monetary and fiscal realities.

The end, when it comes, and we’ll know it’s here when a president and party in power actively pursue Modern Monetary Theory (MMT), will be economic ruin and the final conversion of the most successful and powerful capitalist democracy the world’s ever seen, into a sycophantic socialist oligarchy.

Since the bell signaling the beginning of the end just sounded, here’s how to make money as the world implodes into the black hole dug for us by the Federal Reserve and central banks everywhere…

The Trading Strategy I Almost Never Tell My Readers to Use…

0 | By Shah Gilani

What a week last week was. And what a week we’re looking forward to.

If nothing else, last week’s rally was unexpected on the heels of the previous week’s nasty selloff – culminating in a more than 600 point drop two Fridays ago.

But futures last Monday reversed their pre-open tanking and led the way from the open through the week.

Trade talk, as mixed as it was, moved stocks higher last week.

What seemed unexpected about that is the fact that President Trump said the Chinese called and wanted to get back to the table. Too bad for the President the Chinese news agencies reported there was no call.

So, what happened that lifted stocks, and will it continue?

How a Manufactured or Virtual Recession Could Cause a Market Crash

1 | By Shah Gilani

Not everyone likes to hear good news about the economy.

Typically, political parties out of power want to see seated opponents get clobbered by economic failure.

In this age a real, or virtual recession, could be manufactured given today’s media reach and technological tools when leading to an election if even just in the minds of voters.

So, you need to ask yourself: Is a recession being manufactured right now? Who benefits from a failing economy or just pushing the recession narrative? Could a manufactured recession or incessant recession fearmongering crash the stock market? And, what would happen to you?

Since you just asked by reading those questions, I’m going to answer them for you.

Only, you’re not going to like what’s really happening and how bad it’s going to get.

But you are going to like knowing what you must do to make a ton of money off the very dirty game that’s going to go terribly wrong

Capital Wave Forecast: A Could Be Make or Break Week

0 | By Shah Gilani

This week could be a make or break week for the markets. It could also be a lot of nothing.

There’s a big difference.

A lot of nothing ultimately means very little net movement by the close this Friday from where we closed last Friday.

And less than noting means a flat week on noticeably diminished volume.

That’s a possibility because we’re coming to the end of summer, the end of traders and big decision-makers being on vacation. So, it wouldn’t be surprising to see a lot of nothing going on over the next two weeks leading up to Labor Day weekend.

On the other hand, there’s already been a lot of big-wig vacationers calling into their offices barking trading instruction to their minions from their Hamptons homes and the resorts of Southern Europe, on account of not being able to relax as news flow moves markets more than usual in the usually quiet half summer.

That news flow isn’t likely to diminish.At least, not just yet….

It’s Not the Economy, Stupid… It’s the Fed

3 | By Shah Gilani

Back in the 1992 presidential race, James Carville, Bill Clinton’s campaign strategist wanted his candidate to blame incumbent George H.W. Bush for the recession the country was facing and pressed the Clinton team into focusing on that key talking point by telling them, “It’s the economy, stupid.”

That phrase is still used today.

But it shouldn’t be when it comes to the stock market.

In fact, anyone who thinks the market’s wobbling because the economy is wobbling might be stupid.

The market is having an ugly bout of hiccups, not because there are any problems with the economy, it’s hiccupping because the Federal Reserve is stupid.

Here’s what the Fed’s doing that’s stupid, why we’re stupid to believe they’re not the problem, and how to fill in the hole they’ve dug for the country and the world

Capital Wave Forecast: Don’t Cry for the Stock Market, Just Yet

0 | By Shah Gilani

It looks like another manic Monday with futures indicating a down opening, maybe to the tune of a couple hundred Dow points.

But this Monday doesn’t have to be a replay of last Monday’s more than 700-point plunge, though it could be.

But I doubt it…

As volatile and ugly as last week was, especially Monday’s plunge on the heels of the previous week’s hard sell-down, the Dow ended last week down only 197 points.

The Dow’s only down 4% from its all-time high of 27,398 registered less than a month ago.

Year to date the Industrials are up a very handsome 12.69%.

And, though the Nasdaq Composite ended last Friday down the worst of major benchmarks, it was only off 44.93 points on the week.

The Nasdaq, only off 4.5% from its July all-time highs, is up a whopping 19.95% year to date.

That’s why I say, “Don’t Cry for the Stock Market.”

At least, not just yet….