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John Thomas graduated with a bachelor’s degree in biochemistry with honors and a minor in mathematics from the University of California at Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was employed by a medium-sized Japanese securities house. Thomas became fluent in Japanese... More
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  • The Blockbuster Read In The Hedge Fund Community

    The Blockbuster Read in the Hedge Fund Community

    About a year ago, I received a call from a friend of Tony Robbins, the renown, six foot seven inch motivational speaker. He said he was looking for billionaires to participate in a future project.

    I answered that I wasn't a billionaire yet, but that he should call me in a couple of years when I might be there.

    Last week, the end result of that project landed on my desk, the just released book, MONEY, Master the Game: 7 Simple Steps to Financial Freedom, by Tony Robbins.

    Since it was a near miss project of my own, I thought I would give it a quick read. I wasn't expecting much. After all, the guy walks on burning coals for a living.

    I couldn't have been more wrong. Tony has put together a very coherent, readable, and extremely well researched tome. He has even put to use a formidable research team of his own to produce some fascinating findings about the very long-term returns of different investment strategies.

    I was so impressed that I called a hedge fund friend to see if he had heard of the book. Not only had he heard of it, but his CEO had read it and ordered everyone in the company to read it, down to the kid in the mail room. A call to another hedge fund garnered the same response.

    Five minutes later I was on the Amazon website ordering copies for all of my adult kids.

    Read the book and you can't help but notice that Tony Robbins seems to know everyone on the planet. Warren Buffet and Bill Gates? Sure thing. The Dalai Lama? No problem. That is not faint praise, as I am not a slouch at name dropping myself.

    What is useful to you and I is that Tony has interviewed at length the leading investment lights of our age and extracted their innermost investment secrets.

    Name the top dozen investment gurus of the last 30 years and they are all there; hedge fund legends Ray Dalio, Paul Tudor Jones, and Kyle Bass.

    Index fund creator John C. Bogle. Legendary long only managers David Swensen, Mary Callahan Erdoes and Sir John Templeton. The iconoclasts T. Boone Pickens and Carl Icahn are also there.

    I know most of these people myself, and you have read their interviews in the hallowed pages of this newsletter. He certainly skimmed the cream.

    The introduction is a bit retail. I suppose that Tony is trying to ease the amateur investor in there slowly and prepare them for the rude shocks that follow.

    Then he shatters reader preconceptions outlining his nine investment myths. I have been hammering away at my own followers for years on many of these.

    The sad truth is that much of Wall Street is trying to skin you alive, leaving your investment well being at the bottom of their list of priorities. Almost no one reliably beats the market year after year, except me and a handful of others, and it took me 40 years trying to get there.

    Fees are always larger than you think. Published mutual funds results overstate profits, as they have a strong survivor bias. Target-date mutual funds can be disastrous.

    Annuities don't fit into the modern world. Trading means losing for most people. Almost no one can time the market (except me, again). Chasing manias can be the perfect buy high, sell low strategy.

    At the end of the day, a balanced portfolio of index mutual funds and Treasury bonds rebalanced annually is probably the best solution for most.

    Let me make it clear. This is not a "how to trade" book. Nor is it a "get rich quick scheme." It is a sober and thoughtful analysis how the average working person should invest their savings over the course of their lifetime.

    At 565 pages, the book is a bit of a wrist breaker. But it is one of the best investment books that I have ever read. And I have read most of them published over the last 100 years.

    In fact, I didn't even read it, I listened to it on an audio book from Audible.com which is also owned by Amazon, while backpacking in the High Sierras.

    As I spend so much time researching and writing these letters, I have little other choice.

    To buy MONEY, Master the Game: 7 Simple Steps to Financial Freedom
    at discount Amazon pricing, please click here.

    Enjoy.

    Mar 25 11:30 AM | Link | Comment!
  • The Great Social Security Marriage Benefit You've Never Heard Of

    The telltale signs were suddenly everywhere.

    The AARP membership cards appeared, unsolicited, in the mail (American Association of Retired Persons). People have started giving up their seat to me whenever I ride the BART, especially when I need a haircut.

    And recently, I have found those never ending TV ads about drugs dealing with arthritis, Alzheimer's disease and erectile dysfunction utterly fascinating.

    There is no denying the calendar. Soon, I will be reaching the US retirement age of 65.

    For much of my life, retirement was the furthest thing from my mind, given the way I lived it. In fact, many of my friends and family doubted that I would ever make it past 30, when I published my first book.

    My life passed before my eyes during multiple mountain climbing accidents in the High Sierras, the Alps, and the Himalayas. Damn those used ropes!

    The Vietnamese had their shot when I caught a landmine in Cambodia. Thanks to them, I still set off metal detectors (especially the one at the United Nations in Geneva, Switzerland).

    The assorted tropical diseases I did catch there probably took decades off my life. Doctors still find my X-rays puzzling.

    I certainly thought I had bought the farm while crashing a variety of planes in Paris, Austria and Sicily.

    Saddam Hussein had his go when his troops riddled my plane with bullet holes over Kuwait in 1991. It's a good thing that I crash aircraft better than anyone I know. That's important, because they don't let you practice crashing during flight school.

    But somehow the Purple Heart I earned doesn't seem worth it when my heavy backpack reminds me that I'm missing a lower disc. Thank goodness for hot baths and Advil!

    Then there was that time last winter at 12,000 feet in the High Sierras when I got caught in the dark, a ferocious blizzard with 80 mile per hour gusts and 10 degree temperatures.

    My GPS froze, so I had to navigate my way back down the mountain with infrequent tree blazes and an old fashioned WWII army compass.

    I over estimated the effectiveness of my new snow shoes and underestimated my ability to wade through four feet of fresh powder. In the end I was so exhausted that had to fall down the last slope to get to my car.

    Then I discovered that my keys were also frozen and I couldn't get in the car. After sitting on them for 15 minutes, the parking lights suddenly blinked and I barely made it out alive.

    But I diverge.

    Given the approach of The Big Number, I thought it was time to call my accountant.

    I love my accountant. For most of my working life he made sure I never paid a tax rate over 14.9%, taking advantage of the "carried interest" treatment afforded fortunate and well-connected hedge fund managers.

    It was only when I got into the newsletter business eight years ago that I had to pay the full ticket 39.5% rate the rest of the masses get stuck with. However, he keeps magically coming up with tax goodies for me.

    I got $10,000 worth of tax gifts when I bought my all-electric Tesla Model S-1.

    And this year's tax return promises to deliver a double windfall from my new solar roof panel system. That includes a 30% alternative energy investment tax credit and full deductibility of the interest on the loan used to pay for it (which will be the subject of a future research piece).

    And despite many government attempts to do so, he has successful kept me out of jail. Besides, locking me up in a Federal facility would be unkind to the other inmates, not to mention the poor guards.

    My accountant has even promised to snow shoe with me in the High Sierras this winter.

    But now I'm rambling.

    So I asked my accountant how best to game the Social Security System once I am eligible. I have done much for the United States government, it would be nice if I got a little something back.

    He asked me if I was married. I answered that I wasn't, but that I could be. What's it worth to me?

    It was then that he told me about the Great Social Security Marriage Loophole.

    It is this simple.

    I actually qualified for retirement when I was 62. But if I had done so, I would have received discounted benefits. I will qualify for full retirement benefits at 66 1/2.

    Since I have paid in my maximum Social Security taxes for my entire life, I will be eligible to receive $24,000 a year, or $2,000 a month. However, if I delay my retirement until 70 1/2, my benefits will increase by 32% to $31,680 a year.

    Here comes the good part.

    I can retire now, and then immediately "file and suspend" my benefits. This is a simple one page form anyone can complete on the IRS.gov website.

    That will allow me to suspend receiving my benefits, enabling them to continue to increase to the $31,680 maximum over the next five years. Since I don't need the money anyway, and $2,000 a month barely buys you a cup of coffee at Starbucks in the San Francisco Bay area, it was a no-brainer.

    In the meantime, my "wife" can apply for her own benefits and receive 50% of the value my benefits immediately, while my own suspended benefits continue to grow.

    Not many people know about this benefit. In fact, The Great Social Security Marriage Loophole is one of the best-kept secrets of the entire Social Security system.

    So, I asked my accountant how old my future "wife" had to be to be before she could retire and claim the marriage benefit freebie. He said 62.

    I said "Sorry, that wouldn't work for me." For a spouse to keep up with me at 12,000 feet in a blinding snowstorm, she would have to be at least ten or twenty years younger than I. By the time she retired, I would be 72 or 82, the suspense period long having since expired.

    Anyway, I find the prospect of getting married again is somewhat daunting. And as you can well imagine, the pool of 42-52 year old women willing to subject themselves to flying lead, tropical diseases, plane crashes and permanent jet lag is somewhat limited.

    You see, I'm not an easy person to be around.

    Did he have any other ideas?

    He did mention that I could apply for my Medicare benefits three months before I turn 65. If I applied for benefits more than six months after I turn 65, I could be subject to hefty penalties. Go figure.

    Yes, you might conclude that only a complete maniac could live a lifestyle like this and get away with it, and my mother would agree with you.

    But how else could I make a piece about obscure Social Security rules interesting?

    In Search of the Lost Benefit

    Mar 23 11:21 AM | Link | 1 Comment
  • Mad Hedge Fund Trader Hits 10% Profit In 2015

    I am sitting here at the Lone Eagle Grill in Incline Village, Nevada, enjoying a rare solo lunch. No one is asking me about the future of interest rates, if there is any gold inside Fort Knox or if the aliens really landed at Roswell, New Mexico.

    My table overlooks majestic Lake Tahoe, and a brace of mallard ducks has just skidded across the smooth surface for a landing.

    My big score last night was coming across a wild bobcat, the first I had ever seen in the Sierras. After cautiously studying me for a minute with his bright yellow glowing eyes, he scampered up the mountain.

    My pastrami sandwich is cooked to perfection, and would give Manhattan's best culinary effort a run for its money. In fact, I have enough food here for two entire meals. Bring on the doggie bag!

    After surviving a meat grinder of a January, putting the pedal to the metal in February, and dodging the raindrops of March, the model-trading portfolio of the Mad Hedge Fund Trader has posted a year-to-date gain of 10%.

    We have generated profits for followers every month this year, and are now a mere 4.75% short of a new all time performance high.

    Mad Day Trader, Jim Parker, and myself have performed like tag team wrestlers, delivering winners for our paid subscribers one right after the other. Some 12 out of my last 14 Trade Alerts have been profitable.

    I managed to nail the collapse in the euro (NYSEARCA:FXE), (NYSEARCA:EUO) big time, backing that up with profitable long positions in the S&P 500 (NYSEARCA:SPY), the Russell 2000, and Gilead Sciences (NASDAQ:GILD).

    When the markets turned jittery, I coined it with short positions in Alcoa (NYSE:AA), QUALCOM (NASDAQ:QCOM) and AT&T (NYSE:T).

    Only a premature long in oil (NASDAQ:LINE) and a short in Treasuries (NYSEARCA:TBT) have scarred my numbers so far this year.

    Jim has been on an absolute hot streak in 2015, shaking the Bull Run in biotechs for all it is worth (NASDAQ:ZIOP), (NASDAQ:THRX), (NYSE:ZTS) and executing some perfectly times shorts in oil (NYSEARCA:USO).

    This is compared to the miserable performance of the Dow Average, which is up a pitiful +2% during the same period.

    The nearly four and a half year return of my Trade Alert service is now at an amazing 162.4%, compared to a far more modest increase for the Dow Average during the same period of only 51%.

    That brings my averaged annualized return up to 38.2%. Not bad in this zero interest rate world. It appears better to take on some risk and reach for capital gains and trading profits, than surrender to the paltry fixed income yields out there.

    This has been the profit since my groundbreaking trade mentoring service was first launched in 2010. Thousands of followers now earn a full time living solely from my Trade Alerts, a development of which I am immensely proud.

    What saved my bacon this month was my instant and accurate decoding of Fed chairman Janet Yellen's cryptic comments on the future of possible interest rate hikes, or the lack thereof.

    We got to eat our "patience" and have it too.

    Wall Street gets so greedy, and takes out so much money for itself, there is now nothing left for the individual investor any more. They literally kill the goose that lays the golden egg.

    The Mad Hedge Fund Trader seeks to address this imbalance and level the playing field for the average Joe. Looking at the testimonials that come in every day, I'd say we've accomplished that goal.

    It has all been a vindication of the trading and investment strategy that I have been preaching to followers for the past seven years.

    Quite a few followers were able to move fast enough to cash in on my trading recommendations. To read the plaudits yourself, please go to my testimonials page by clicking here.

    Watch this space, because the crack team at Mad Hedge Fund Trader has more new products and services cooking in the oven. You'll hear about them as soon as they are out of beta testing.

    Our business is booming, so I am plowing profits back in to enhance our added value for you.

    The coming year promises to deliver a harvest of new trading opportunities. The big driver will be a global synchronized recovery that promises to drive markets into the stratosphere by the end of 2015.

    Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011, 14.87% in 2012, and 67.45% in 2013, and 30.3% in 2014.

    Our flagship product, Mad Hedge Fund Trader PRO, costs $4,500 a year. It includes Global Trading Dispatch (my trade alert service and daily newsletter). You get a real-time trading portfolio, an enormous research database and live biweekly strategy webinars. You also get Jim Parker's Mad Day Trader service and The Opening Bell with Jim Parker.

    To subscribe, please go to my website, www.madhedgefundtrader.com, click on the "Memberships" located on the second row of tabs.

    By the way, those of you who ran up huge profits with your euro shorts in January and February, and the overnight killing I scored with the Russell 2000 (NYSEARCA:IWM) this week, you all owe me new testimonials.

    Ship em in!

    Oh, and buy the way, there is no gold in Fort Knox. That is why Nixon took us off the gold standard in 1973. And the aliens did land at Roswell. Where do you think my iPhone and Tesla came from?

    Looking for the Next Great Trade

    Tags: FXE, EUO, SPY, GILD, AA, QCOM, T, LINE, TBT, ZIOP, THRX, ZTS, USO
    Mar 23 11:19 AM | Link | Comment!
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