Month: May 2013

Recognize Trading Trends, Psychology, Price Objectives, Technical Indicators & More in this free Exclusive Trading Course

Hi, my name is Adam Hewison. You might want to Google Me to confirm what I am about to share with you. There are plenty of people out there that create “exclusive email courses” with little or no credentials to actually backup their teachings. So, I think it’s right that I share a little bit about myself with you before we even start.

I was a former floor trader on the IMM, IOM, NYFE and LIFFE as well as a risk manager of a large, multinational corporation in Geneva, Switzerland. I also have written books on forex trading and trend following. In 1995, I founded INO.com and later co-founded MarketClub.

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(1) The importance of psychology in price movement

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(4) How to picture price objectives

(5) How to trade with moving averages

(6) How to use point and figure trading techniques

(7) How to use the RSI indicator

(8) How to correctly use stochastics in your trading

(9) How to use the ADX indicator to capture trends

(10) How to capitalize on natural market cycles.

Plus, you will you will learn all about fibonacci retracements, MACD, Bollinger Bands and much more.

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Every success,
Adam Hewison
President, INO.com & Co-Creator, MarketClub

By www.CentralBankNews.info Here’s today’s Central Bank News link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don’t miss any important news.

By The Sizemore Letter

Warren Buffett is a hero to many investors, myself included.  His record speaks for itself: 18.3% annualized returns in Berkshire Hathaway’s ($BRK-A) book value over the past 30 years compared to just 10.8% for the S&P 500.  And his returns in the 1950s and 1960s, when he was running a much smaller hedge fund, were even better.

Mr. Buffett is also quite generous with his investment wisdom, sharing it freely with anyone who cares to listen.  But as with most things in life, failure is a better teacher than success.  And Mr. Buffett has had his share of multi-billion-dollar failures.

You want to know the biggest mistake of Buffett’s career?

By his own admission, it was buying Berkshire Hathaway!

Everyone assumes that Buffett’s decision to buy Berkshire Hathaway was a typical Buffett stroke of genius.  Nothing could be further from the truth.

We like to think of Warren Buffett as the wise, elder statesman of the investment profession, but Buffett too was young once and prone to the rash behavior of youth.  And Berkshire Hathaway was not always a financial powerhouse; it was once a struggling textile mill.

Buffett had noticed a trading pattern in Berkshire’s stock; when the company would sell off an underperforming mill, it would use the proceeds to buy back stock, which would temporarily boost the stock price. Buffett’s strategy was to buy Berkshire stock each time it sold a mill and then sell the company its stock back in the share repurchase for a small, tidy profit.

But then ego got in the way.  Buffett and Berkshire’s CEO had a gentleman’s agreement on a tender offer price.  But when the office offer arrived in the mail, Buffett noticed that the CEO’s offer price was 1/8 of a point lower than they had agreed previously.

Taking the offer as a personal insult, Buffett bought a controlling interest in the company so that he could have the pleasure of firing its CEO.  And though it might have given him satisfaction at the time, Buffett later called the move a “200-billion-dollar mistake.”

Why?  Because Buffett wasted precious time and capital on a textile mill in terminal decline rather than allocate his funds in something more profitable—in his case, insurance.

By Buffett’s estimates, had he never invested a penny in Berkshire Hathaway and had instead used his funds to buy, say, Geico, his returns over the course of his career would have been doubled.  Berkshire will still go down in history as one of the greatest investment success stories in history, of course.  But it was a terrible investment and a major distraction that cost Buffett dearly in terms of opportunity cost.

What lessons can we learn from this?  I’ll leave you with two quotes from Buffett himself:

“If you get into a lousy business, get out of it.”

“If you want to be known as a good manager, buy a good business.”

In trader lingo, cut your losers and let your winners ride.  Holding on to a bad investment wastes good capital and mental energies that would be better put to use elsewhere.

Thank you, Mr. Buffett, for sharing your failures with us.  Your willingness to do so is one of the reasons we love you.

SUBSCRIBE to Sizemore Insights via e-mail today.

London Gold Market Report
from Ben Traynor
BullionVault
Wednesday 1 May 2013, 07:30 EDT

WHOLESALE prices for gold bullion drifted lower Wednesday morning in London, dipping below $1470 an ounce, though it remained slightly up on where it started the week after two-and-a-half days trading in a tight range, with China’s markets closed since last Friday until tomorrow for the Labor Day holiday.

Silver meantime fell towards $24 an ounce to almost exactly where it started the week, while other commodities also fell and US Treasuries were flat ahead of today’s Federal Reserve policy announcement.

“Silver has been trading sideways for the past few sessions, with support at Friday’s low at $23.64 and resistance at Friday’s high at $24.87,” say technical analysts at bullion bank Scotia Mocatta.

“We are looking for a retest of the $22.07 low [of April 16].”

In London, the FTSE 100 ended the morning up on the day, while other European markets were closed for the May 1 holiday.

In the US meantime the Federal Open Market Committee is due to announce its latest decisions on US monetary policy later today.

“We expect the Fed to leave policy unchanged today,” says a note from Standard Bank’s currency team.

“Policymakers are likely to pledge that the Fed will continue to buy $85bn of bonds per month until ‘the outlook for the labor market has improved substantially in a context of price stability’…there is some speculation that the Fed could soften its language, perhaps in an effort to steer the market away from the idea that it could taper, or even end, bond purchases by the close of 2013.”

“There is concern [among Fed policymakers that] the first taper would be misinterpreted as the onset of a tightening cycle”, says Michael Feroli, chief US economist at JPMorgan Chase in New York.

“You want to see how the market is going to digest a cut in purchases” adds Feroli’s colleague Joseph LaVorgna, “so you want to do it in a way that minimizes the disruption.”

“Accommodative policies are generally seen as supportive for gold,” says INTL FCStone metals analyst Ed Meir, “but as the events of the last few weeks have demonstrated, the precious metal does not always move in lockstep with simple expansion in money supply. Instead, it seems to pick up steam either as a result of turmoil in the financial markets or on the back of higher inflation readings, neither of which seem to be prevalent at this particular time.”

“[Gold’s] longer-term trend has been broken to the downside,” says a note from Credit Suisse.

“This fact is significant because in a downtrend the default move of a price is lower in the absence of convincing fundamentals. With fundamentals only neutral, we think some risk still persists.”

Over in Europe, the European Central Bank is due to announce its latest monetary policy decision Thursday.

“Given the latest data, we think that the case for a front-loaded rate cut is strong enough already,” says UBS economist Reinhard Cluse “so that the ECB is likely to cut rates on May 2.”

However, “the chances of fully-fledged quantitative easing from the ECB are low,” adds Nomura economist Nick Matthews.

“The European Central Bank is obviously in a difficult position,” German chancellor Angela Merkel said last week.

“For Germany it would actually have to raise rates slightly at the moment, but for other countries it would have to do even more for more liquidity to be made available and especially for liquidity to reach corporate financing.”

On the currency markets, the Euro rose to a two-month high against the Dollar Wednesday above $1.32.

The Euro gold price meantime fell to €1112 an ounce, close to yesterday’s low and 0.9% down for the week so far.

Growth in China’s manufacturing sector meantime slowed last month, according to official purchasing managers’ index data published Wednesday. China’s official manufacturing PMI fell from 50.9 in March to 50.6 in April, with 50.0 being the threshold between indicating sector contraction and expansion.

Britain’s manufacturing PMI rose to 49.8 last month, up from 48.6 a month earlier. Similar data for the US are due to be released later today.

Ben Traynor

BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben can be found on Google+

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By WallStreetDaily.com

If repetition breeds retention, it’s time for an annual warning. Especially since it’s the first day of May.

At this time of year, countless media outlets can’t help but regurgitate the investing adage “sell in May and go away.”

Recent history promises to make this year’s warnings all the more urgent, too.

You’ll recall, the stock market sold off anywhere from 9% to 19% in the middle of 2010, 2011 and 2012.

But please don’t fall into the recency bias trap. That is, using the most recent market experiences to make sweeping conclusions about the future.

While the last three years make it seem like a “sell in May” strategy would be a no-brainer, the long-term data paints an entirely different picture.

Don’t Get Duped Out of Stocks

When you see a chart like this one from U.S. Global Investors, which I showed you last year, even I’ll admit that it’s hard to resist the temptation to bail on stocks right now.

Clearly, stocks enjoy higher (and more frequent) positive returns during fall and winter months than during spring and summer months.

But don’t be misled.

No matter what the headlines would have you believe, a higher likelihood of negative returns for one or two months doesn’t mean the entire six-month period – from May to October – is doomed.

In fact, the average returns for the S&P 500 Index from May to October have never been negative at all, according to Bespoke Investment Group.

Slow Growth is Way Better Than No Growth

Granted, the average returns from May to October are notably less than the November to April period. But who cares?

Making some money is better than making none at all – or worse, losing money – right?

It is to me. If you’re still not convinced, though, this chart from CXO Advisory should do the trick.

It compares the performance of three strategies: 1) investing in stocks all year, 2) investing in stocks from May to October and cash during the other six months, and 3) investing in stocks from November to April and cash during the remainder of the year.

As you can see, small average returns from May to October add up in a big way.

Or as CXO says, “In support of conventional wisdom, being in stocks during November-April mostly beats being in stocks during May-October (terminal values $965 vs. $55). However, buying and holding the index substantially outperforms both seasonal strategies.”

I’d say so.

Not to mention, if we incorporate taxes into the equation (since selling every May would trigger short-term capital gains liabilities), a simple buy-and-hold strategy can’t be beat.

Last, But Not Least…

If you’re still not convinced to stay invested throughout the year, there’s no hope for you!

In all seriousness, this last data point should help any fence sitters…

According to Jim Stack of Investech Research, “While there were 13 double-digit losses during the May-October period in the past 83 years, all of them occurred during bear markets.”

Last time I checked, we’re not in a bear market. So the risk of a nasty May to October selloff this year is virtually non-existent.

Bottom line: Don’t be duped. Selling in May and going away is not all it’s cracked up to be.

So instead of panicking and selling out of stocks based on a mere flip of the calendar, I’d recommend a more sensible course of action. Like trimming up your protective stops and perhaps holding off for a 3% to 5% pullback before putting any new money to work.

Doing so promises to keep you invested. It limits your downside. And you can use any short-term volatility to your ultimate advantage. And who wouldn’t want all of that?

Ahead of the tape,

Louis Basenese

Article By WallStreetDaily.com

Original Article: Sell in May? Not According to These Three Charts