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Chris Tell
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Baptized into the world of business and travel at a young age I’ve subsequently lived in multiple countries, traveled to many more and built myself a small fortune investing in businesses and markets that I spend an extraordinary amount of time doing due diligence on. People sometimes ask me... More
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capitalistexploits.com
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  • Friday Q&A – Ask A Professional Trader Brad Thomas

    By: Brad Thomas and Chris Tell

    We live in a surreal world dominated by central bank interference, liquidity driven markets and simultaneous collapsing credit conditions (China) and record bond purchasing (US). As if this wasn't enough, we have the crisis in Ukraine forcing liquidity out of Europe. Over in Japan we're experiencing a body slam to the Nikkei while the Yen strengthens and curiously the bond market has remained unmoved.

    This may well be significant since, for those who've been paying attention, when a sell-off in equities occurs it would be typical that as a trader we would get long the bond market expecting capital flows to drive yields down as it flows into the "less risky" government debt. What has happened in Japan is that capital has flowed out of equities but NOT into bonds. Could this be the harbinger of things to come? Positioning to profit from these markets is Brad's bread and butter. With 30 years+ experience in the trading trenches, Brad and our subscribers are well positioned to profit by "trading" the markets. If you want your questions answered by a professional trader shoot them through here and we'll do our best to answer them for you.

    On to this weeks questions.

    Question:

    Brad, thank you for your excellent work, the emerging market currencies are on a tear. Will you be getting long any of these and if so where is the best bang for your buck?

    Answer:

    Yes emerging currencies have been on a tear as of the last month or so but I think it is only a "working off of an oversold condition" Let's go back a month or so, there was a lot of bearish talk regarding emerging market currencies particularly surrounding the Turkish Lira. Those fundamental problems have not gone away and won't go away for quite sometime. Furthermore, China continues to burn away in the background……nothing has changed. What has also happened over the last month is the cost of long term options has come down significantly. So rather than get bullish on emerging market currencies I see the strength in emerging market currencies over the last month as a great opportunity to open up more bearish positions on emerging market currencies particularly via long term options.

    Question:

    I'd be interested to know your overall long term views on equity markets, bond markets and currency markets. It's probably not a short answer but if you could find the time to discuss these I think it would be very useful.

    Answer:

    I look at markets through very different eyes than most. Rather than competing head to head with other analysts via traditional means such as fundamentals etc I look more at how a market is positioned, in particular I try and workout the mystical ratio of strong to weak hands. Suffice to say this - I think that equity markets are by and large not widely held by the general investing public whereas bond markets are. How do I arrive at this conclusion? Well through various means, primarily via surveys of public opinion and sentiment. Here is one example, from Barry Ritholtz

    "April 2: Anyone who thinks stock market sentiment is excessive today should speak to the American people. According to a Gallup poll in the first quarter, half of all Americans think putting money into the stock market is a bad idea.

    In the 1999-2000 era, 67% of Americans thought putting money into the stock market was a great idea. Only 28% thought it was foolish. Fast-forward to today-more Americans think putting money into the stock market is a bad idea (50%) than think it's a good idea (46%). We might be tempted to call this irrational non-exuberance in light of the performance of the market over the past five years."

    So we have a long way to go before the majority of the population think that investing in equity markets is a good thing, until such time equity markets will go higher at the expense of bond markets.

    - Brad

    Until next week.

    - Chris

    About Brad Thomas

    Brad Thomas is the Editor of Capex Asymmetric Trader. Independently wealthy via his skill as a trader, Brad is a practical crowd "behavioralist". First introduced to the stock market in 1985 by a school friend in New Zealand, he has been involved with trading ever since.

    He was originally trained as an accountant and mathematician and holds a masters degree. Brad first started working on a commodities trading desk with a Japanese trading house. For 6 years he was mentored by a Japanese national on the art of beating the crowd through understanding crowd psychology and expressing views through the various trading tools. It was during this time Brad developed his own unique way of viewing and trading markets.

    Brad then joined a multinational Merchant Bank and for 11 years managed a proprietary fund trading in equity options in both the US and Europe. Brad retired from "corporate trading" in 2007 to manage his own funds and to spend a little more time on having fun outside of beating the crowd.

    Brad specializes in looking for deep value situations across asset classes in different countries where dramatic returns can be achieve from relatively little risk.

    CapexAsymmetricTrader_SubBox

    Apr 18 9:02 PM | Link | Comment!
  • The Creeping Theft Of Freedom

    By: Chris Tell at http://capitalistexploits.at/

    We're quickly heading into the abyss. I'm serious. I offer the story you'll read below as a mere anecdote in a sea of troubles.

    On return from a recent trip to Sri Lanka Mark and I traveled through Australia. Proceeding through the cattle stop that is "customs" we then met with the "security screeners". These are the folks allegedly protecting us from attackers armed with nail clippers and toothpaste.

    The first thing we saw was a giant sign that said refusing to undergo a body scan would result in detention. Mark, seeing this and having never been "body scanned" was immediately taken aback. Sure enough, he was singled out to be the random subject.

    Fortunately he was prepared… "I'm sorry. I have a medical condition that precludes me from the scanner." To which the security woman said, "Sure, OK no problem, come through here (metal detector) instead."

    I on the other hand, tired, unprepared and not thinking much about it had no such response. Instead I suggested, "Just go ahead and give me the pat down, I don't mind."

    I was told to dutifully sit down and wait for a "supervisor". Fifteen minutes later the supervisor came over to "educate" me because, well, clearly I'm uneducated. I was handed an official document prepared by the Department of Infrastructure and Transport.

    Flipping through it I was struck by the psychology being used. Now I've read a wee bit about psychology over the years, as it's of interest to me. After all the financial markets are really just a collective aggregation of millions of people acting, and being acted upon. It's psychology in a test tube.

    This document was textbook "Good Cop, Bad Cop."

    • On the first page the document told me that "Body scanners are safe". Remember, anybody reading this would only ever be someone who was protesting the scan, so it's only natural that a soft cuddly comforting approach was required. (Good cop)
    • The next page told me explicitly what to do when selected for a scan. This page provided the reader with the expectations. (Bad cop)
    • Page 3 reinforced the comforting approach. It was titled "Privacy" and explained how your genitals would not be displayed to the stumbling brain dead, thugs "protecting our borders", and how as such your privacy is "protected". (good cop)

    Now at this stage if you weren't yet convinced by the harmlessness of subjecting yourself to this ridiculous charade called "security", and in case you had any doubts as to what the "Bad Cop" had in mind, you were left with no doubt upon reading the final page, which I've placed below:

    • If you are selected to be screened by a body scanner and you refuse you will not be allowed to pass through the screening point for 24 hours. This will mean that you are unable to board your flight.

    There you have it. You have choice… no, really you do. Just like democracy you have a choice. Whatever country you're in take a look at your voting choices. My guess is you're looking at death by moron, or death by idiot.

    Why are they doing this? Why randomly? Why not everyone? It certainly isn't for security! The answer is that introducing radical change always meets with resistance.

    Imagine for a minute telling an entire line of people, "Hey you're all getting body scanned whether you like it or not." Now, if just a couple of people in that line don't like the idea you will have the very real potential for outrage within minutes. One person yells, "F$%k that! Over my dead body, those things cause cancer." Next, a mother of a young child thinks, "Y ikes I hope he's not right…I don't want to take the risk." She digs her heels in and says, "I'm with you, you're not radiating my child." And on it goes…

    Now at this point if the authorities push ahead they do so risking a full-blown riot.

    This answers the question of random selection. Random selection means that consensus opinion cannot come to the fore. Now if someone protests there are ten other people scooting through without incident, nothing to see here, it's not me, odds are good I won't get chosen so I don't care.

    Why don't those others speak up?

    Because they don't want to be singled out and they're hoping they will not be selected. They are playing the lottery.

    Furthermore the guy who is making noise about this is now treated as someone who is "making trouble". A rabble rouser. What's he hiding? the rest of the queue thinks. Why doesn't he just comply? They say it's safe.

    The mother who protests in the crowd has no backing on her own, and she doesn't want to upset her children. Instead she reviews her options and instead complies. It's easier to just get through it and forget about it. Maybe it is safe..?

    THIS, ladies and gentleman is how to turn an entire populace into slaves. Combine it with fear mongering, "Terrorists want to kill you because they hate your freedoms." and you have a recipe for a genocidal outcome. How does one go from enforcing a body scan to running death camps?

    In increments. The boiling frog we've all heard so much about.

    Think I'm kidding. Hitler used EXACTLY these tactics and by the time the people woke up to the fact it was too late, way too late.

    Familiarity begets slavery. Most people don't even realise they are slaves. I'm a slave and I realise it. I do everything in my power to fight my masters and I hate every intrusion made, but I realise that in many small ways, and sometimes not so small, I am still a slave. I don't know anyone that isn't frankly.

    The well-meaning yet pig-ignorant drone who was brought over to explain my "choices" is just "following orders". This comes with a mother lode of ignorance. Ignorance because you can bet the farm that he hasn't studied history, or much of anything for that matter, other than what he finds on his Facebook page or in the propaganda he's forced to digest and spew forth. If he considers the morality of what he's doing, which would be unusual, he may find that there is none.

    That I view this behaviour with nothing but utter contempt, and the fact that citizens are treated like barnyard animals is beside the point. We are headed in the wrong direction. It will take a giant iceberg to change course.

    After the Snowden revelations there was a glimmer of hope that the "Citizens" would be outraged and call for change…but look, my Twitter feed shows that Miley Cyrus just got knocked up. And tonight is the American Idol semi-final rounds… God help us.

    - Chris

    "The only way to deal with an unfree world is to become so absolutely free that your very existence is an act of rebellion." - Albert Camus

    Mar 25 8:39 PM | Link | Comment!
  • We Hope You Took Advantage Of THIS!
    We Hope You took Advantage of THIS!

    By: Chris Tell at http://capitalistexploits.at/

    When we decided to launch a Trade Alert service together with Brad Thomas there were 3 rules we all agreed on:

    1. Trade for our readers like we trade for our own accounts. This means exactly what it says. We've all learned the hard way that getting too fancy is rarely a good idea. Focusing on the fundamentals and trading the technicals is all that matters. It also means NOT attempting anything that doesn't fit into a sound risk/reward strategy, which brings me to the next point.
    2. Always ensure we can live to fight another day. Statistically over 80% of traders lose money. Why is this? It is because they believe all the hyped, "get rich quick" plans perpetrated by scoundrels. It is because they are not disciplined, and it is because they are inexperienced.
    3. No bullshit marketing. Mark, Brad and I have all been consumers at some point of various online trading services and newsletters. Some of them have been extremely good, but most have been very poor. The poor ones typically offer the world and deliver a whole lot less. Their business model rests on sucking in the gullible with marketing copy designed specifically to ensure that you're salivating with visions of a new Ferrari, yachts and supermodels. What any of these things have to do with trading I have yet to understand, but I'm a simple man who speaks the language of "black and white". It either works or it doesn't.

    The only way to tell, and I mean ONLY way to tell, if the product is good, bad or ugly is by looking at the track record.

    It is for this reason that we decided to prove to our readers what we're made of. We decided to give away Brad's trading advice. It's the kind of advice that uber-wealthy individuals currently pay him six figures annually for.

    By offering the Trade Alert service free of charge for five months we were confident that we'd be able to skip all the nonsense marketing copy. We'd be able to show in black and white what you, our readers will be getting. Naturally we can't promise anything going forward, nor would we ever be so brash as to do so. We've all heard the maxim that past performance is no guarantee of future results. The future is unknown, and our balls are definitely not crystal. We only know what has worked for over 30 years.

    The greatest percentage rise in a long-dated option takes place when it is in the money and close to expiration. Bearing in mind that the vast majority of Brad's trades are long-term options with months or even years to continue to play out, we can already see those that are moving in the direction in which we need them to.

    Below we review the last five months of trades and the respective returns. Remember, this has been thus far offered as a free service. We sincerely hope you've been making the most of it.

    We have great confidence that the next time we publish this track record the percentage returns will be reflective of the value premium accorded to options decay when the trades are in the money. In other words, we think they'll be even more profitable!

    $1,000 invested into each trade that brad highlighted looks like this today:

    Trade-Record

    If you've been taking advantage of Brad's Trade Alerts from day one you are enjoying that near 50% return in just five short months!

    As you can see from the chart above the vast majority of his trades are for January 2016 expiration and they're already in the money. There is the very real potential for much, much higher returns to come.

    Is it worth six figures to get advice from Brad?

    That is clearly the case for some individuals. We realize however that most of our readers do not have hundreds of thousands of dollars to allocate to their options trading accounts. We have therefore tailored the service to suit our readers and priced it accordingly.

    Mark and I don't intend to offer the cheapest products on the planet, and quite frankly we'd be underselling ourselves, and Brad's exceptional talents and 30 years worth of experience by doing so. You get what you pay for in this life. Nothing we offer is "cheap". Our private equity syndicate, which is $5,000 per quarter and soon going to $6,250, is expensive and exclusive. Our Meet Ups, where we spare no expense for our attendees are always well-received "one of a kind" experiences.

    Because we charge what we're worth, we don't get the customer service headaches other guys get. Our subscribers act like adults, because they get treated as such! It's not arrogance, it's confidence in our abilities and in our service.

    There are countless wannabe trading "gurus" out there offering "cheap" services and products. Cheap is relative. If I pay $99 for something that loses me $5,000 then I've just managed to find a VERY expensive service.

    Despite not being "cheap", the Capex Trade Alert service is easily the best "value for money" trading service we have found anywhere. Right now you can join for the first month at just $7. You will immediately receive a complimentary copy of the Capex Trade Alert "Going 4 Gold" Report, which includes five options trades Brad has handpicked. These trades are specifically designed to profit handsomely from the positive turn in the precious metals markets, which we (along with Doug Casey, Eric Sprott, Rick Rule and many others) believe occurred late last year.

    Unlike many marketing firms that are really only posing as investment professionals, we don't offer discounted subscriptions. After your first month $7 trial, your investment in the Capex Trade Alert service will be $147 per month thereafter.

    There are no annual billing arrangements. You keep the service for as long as you want, and you can cancel whenever you like. We're pretty sure you won't be doing that any time soon.

    How can we be so confident?

    it's easy, look at the track record above. Sure, it's only 5 months, and yes, the markets are performing well right now. However, Brad has been at this game for several decades. We can assure you this is no fluke, or "snapshot" moment in time. Brad delivers these results consistently.

    But look, ultimately you are the judge. There are no long-term commitments, so if you try it and you hate it, let us know! We'll cancel your subscription immediately and refund your money.

    Mark and I only talk about investments we're making ourselves and we only offer products or services we believe in. This is something we put together with Brad. It's not a third-party service we have no control over. We're confident you'll get value from it or we wouldn't put our names on it!

    We hope you join us today! Please CLICK HERE to join now for only $7 for your first month and Get your FREE "Going For Gold" trade report!

    - Chris

    "When Donald Duck traded his wings for arms, was he trading up or trading down?" - Douglas Coupland

    Mar 11 7:58 PM | Link | Comment!
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