Articles About Trading & Investing

Now That You Know Volatility, Here’s How to Play It

0 | By Shah Gilani

Volatility comes in all shapes and sizes. It affects every stock, every market, and every asset class, everywhere around the world.

It can be your best friend or your worst enemy.

Either way, as Sun Tzu said, “Keep your friends close and your enemies closer.”

But whether or not volatility is your enemy today, tomorrow, or next week, you have to know how to manage volatility in your trading.

Here’s why you have to embrace volatility, how to see it coming, and how to trade it.

What You Don’t Know About Volatility Can Hurt You

0 | By Shah Gilani

The wild swings we see in the stock market aren’t the result of volatility.

Volatility results from the wild swings, not the other way around.

One thing investors don’t understand is, the VIX (the CBOE Volatility Index, sometimes called the market’s “fear gauge”) isn’t predictive. It isn’t a leading indicator; it isn’t telling us what the future holds. It’s misleading.

If you didn’t know that, chances are you may not understand what’s really causing wild market swings.

Here’s your quick fix on the VIX, and how to avoid falling into the fear gauge’s trap

What Wall Street Is Desperately Trying to Hide About These Wild Markets

1 | By Shah Gilani

If you think the Dow crashing 1,600 points intraday is unprecedented, you’re wrong.

If you think the Dow trading 5,000 points up and down in a single day was an aberration, you’re wrong.

If you think the wild swings equity markets are experiencing will eventually pass, you’re wrong.

Everything you’ve heard on TV and everything you’ve read about the stock market’s violent moves this past week is wrong.

What’s really wrong is how hardly anyone knows what’s wrong, and the handful of people who do know aren’t being honest.

I’m going to tell you something you aren’t going to hear or read anywhere else: the truth about what’s wrong with stock markets, how they got to be so dangerous, and how to trade this new reality.

The Markets Have Further to Fall – Here’s How to Play Them

0 | By Shah Gilani

Last week, it looked like the raging bull market in equities came to a screeching halt.

Don’t believe it. The equity bull market only hit the brakes because it drove full speed into a real wreck: the bond market.

There’s no mystery to it.

It’s not time to worry and definitely don’t panic; there are two sides to this story.

There’s some good news, and there’s some bad news. I’ll give you the heavy stuff first.

The bad news is that there’s more to come; markets aren’t done falling.

But the good news is that stocks will self-correct, and there’s lots of money to be made as markets adjust.

Here’s what happened, what’s next, and how to play this opportunity for profit…

The Future Conglomerate That Will Shake Healthcare to Its Core

0 | By Shah Gilani

There was big news this week. News about big names and the big stocks that tanked once the headlines started to hit.

Apparently, Jeff Bezos, Warren Buffett, and Jamie Dimon are throwing in on some kind of healthcare company. A non-profit, of all things.

While the announcement was heavy enough to sink healthcare stocks (including Express Scripts, CVS, Cigna, Anthem, and some biotechnology companies), details were light. A lot of blind speculation and head-scratching followed.

Don’t bother digging around to see if anything anyone said or wrote about the new venture is particularly enlightening. I already did plenty of digging, and no one’s even close to figuring out what they’re planning.

But I know.

Here’s why Amazon, Berkshire Hathaway, and JPMorgan Chase are partnering up, why their so-called “non-profit” will become a thriving for-profit business, and what their endgame really is…

Tesla’s Running on Fumes – Here’s How You Trade It

1 | By Shah Gilani

No, the market’s not going to fall out of bed.

There are just too many good stocks with strong earnings growth, ringing up huge profits with lots of momentum behind them, driving all the major benchmarks higher.

Then there’s Tesla Inc. (NASDAQ:TSLA).

Sure, it’s considered a tech darling. But it’s not. In reality, it’s a car company jumbled in with a solar panel company and a battery company, masquerading as one unified tech company.

Sure, it’s considered a market darling. But it’s not. Tesla’s stock is stuck in the mud and going sideways.

Sure, it’s got earnings growth. But these aren’t “real” earnings – they’re engineered earnings.

The market has strong underpinnings, enough to weather any serious rounds of profit-taking. Tesla, on the other hand, has no profits to hold it up. If the market dips (especially if tech stocks dip on profit-taking), Tesla’s profitless and sideways stock is headed lower.

Even if the market continues higher, Tesla’s going to have to face reality over its Q4 earnings.

If they come out at the end of February and aren’t a huge upside surprise (and they won’t be), if earnings are below consensus estimates (which they will be), and if they’re burning through more cash than they’re already spending (which has already happened), the stock is going to keel over and shake Elon Musk groupies to their core.

Here’s how smoke and mirrors have transformed a lackluster company into a tech darling, and exactly how to trade Tesla’s fall when their luck runs out…

The Underworld of Wall Street Accounting is Finally Coming to Light

0 | By Shah Gilani

Just recently, an indictment of five accountants became unsealed.

This isn’t just any old document. It is proof of just how cozy relationships and revolving doors add to the epidemic of funky accounting practices.

The accountants named include three big-shots from KPMG, one 2015 hire at KPMG who came over from the Public Company Accounting Oversight Board (the regulatory body controlled by the SEC that oversees accounting firms), and a KPMG wannabe who was working at the PCAOB.

Add that to the fact that General Electric’s (NYSE:GE) outside auditor has always been KPMG, and maybe investors will start to understand that audits aren’t foolproof. Sometimes, even the audits that are supposed to be irreproachable are factually lacking and fraudulent.

There’s a lot going on behind the scenes when it comes to GE, the PCAOB, and the Big Four of Accounting (Deloitte & Touche LLP, Ernst & Young LLP, Pricewaterhouse Coopers, and KPMG).

As always, I’ll be your guide…

Pop Quiz! How Will Cryptocurrency Funds Make it Past the SEC?

0 | By Shah Gilani

The Securities and Exchange Commission is always one to mince words.

While millions of investors are pumped to start playing cryptocurrency, the SEC just threw two Wall Street trade groups for a loop. They were angling to be able to sell cryptocurrency ETFs and mutual funds to the public before they received a Staff Letter from the Director of the SEC’s Division of Investment Management asking how sponsors of crypto ETFs or mutual funds could safeguard public investors.

Become a Multi-Millionaire with Just One Type of Gold Investment

0 | By Shah Gilani

Yesterday, I was on a panel at the Black Diamond conference in Delray Beach, FL with Rick Rule, a friend and colleague of mine. When I asked Rick about what he and Matt Warder were cooking up that was becoming the buzz of the conference, he said, “You’ll have to wait, Shah.”

I can’t wait and you can’t, so, let me introduce you to Matt Warder and he’s the natural resource specialist here at Money Morning. I’ve gotten to know Matt very well over the years, and I got to tell you, this guy knows his stuff.

The Death of an American Icon (and How to Profit)

2 | By Shah Gilani

What happened to General Electric Co. (NYSE:GE) – the company, its businesses, its employees, its shareholders – is sickening.

It never should have come to this. It’s likely the end of the road for the once-iconic conglomerate.

There is a clear path of failure that GE was led down, and it’s easy to see exactly where the mistakes were made.

Here’s who killed GE, and what to do if you own the stock (or want to profit from this icon’s fall)…