By Poly

This is an excerpt from this weekend’s premium update from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly. Now offering monthly & quarterly subscriptions with 30 day refund. Promo code ZEN saves 10%.

It is once again clear that the FED will not be raising rates anytime soon, and this news should cheer the markets.  For the first few months of 2015, FED members touted how well the economy was performing.  But then, suddenly and in unison, FED members were out telling the public that the economy has gone through a rough Q1.  The switch in stance is the FED’s way of telegraphing to the markets that any rate increases are on hold.

The economic numbers, themselves, have been very negative.  Industrial production for March fell 0.6%, more than the expected 0.3% fall.  The March decline was the largest since May 2009, the third in the last four months, and is part of the longest downturn of the current economic expansion.  In addition, retail sales missed expectations for the fourth consecutive month, while housing starts and building permits also missed estimates by considerable amounts.

From the standpoint of the market, poor economic performance is actually bullish.  If the current bull market were based on economic fundamentals and corporate earnings, prices should be at least 30% below today’s level.  But as we’ve discussed for many months, the market’s level is not at all based on economic fundamentals.  Rather, it’s driven by speculative FED-provided liquidity and easy money policies.  Anything that perpetuates these policies will allow the speculative market rise to continue.

Don’t believe me? Take a look at the European and Asian markets.  Their central banks have become very active, and their markets are exploding.  How else do you explain double digit unemployment rates throughout Europe with markets at all-time highs?  Prices today are all about liquidity, and the central banks are creating bubbles in the markets.  Cheap financing has encouraged corporations to take on more debt and to buy back stock, while the Central Banks have soaked up all high quality sovereign debt, crowding that market and forcing everyone to chase yield and speculative assets in the equity and real-estate markets.

A few people are concerned about a potential Greece exit, and that possibility was widely promoted as the cause of Friday’s selloff.  I think by now we can safely say that a Greek exit is one of the most telegraphed events we will ever see.  It has already been priced into the markets, and the exposure to Greek debt has been transferred out of more systemic markets and into public institutions like the Greek central bank, IMF, and Eurozone loan facility.

If there were currently a real risk of contagion, the next in line to fall, Portugal, would have seen a run out of Portuguese sovereign bonds by now.  But instead we see the DAX at record highs and Portuguese 2 year rates near zero!

4-18 Greece Versus Portgual

Netting it out, the bull market may not be ready to die just yet.  World central banks are fully committed to propping up stock markets in order to make everyone feel “wealthy”.  (more…)

Entertainment companies and shares can often be profitable investment options, but investors often overlook them, assuming that one has to be extremely rich to be able to invest in the sector. In order to be successful in such investments, you need to have an eye for good investments as well as having a lot of patience.

How to manage risk when investing in the entertainment sector

Investing in the entertainment sector can be quite risky, given how reliant it is on fan bases and trends. As such, you need to have a good risk management strategy when embarking on this type of investment.

It should be noted that shared risk, in the form of a mutual fund, is possible when investing in this sector. This mutual fund brings together into one large investment, that is professionally managed, all the funds contributed by hundreds or thousands of investors, and this investment is spread across several companies. As such, the investors do not have to put huge sums of money in one single “make or break” project that could spell financial ruin if it fails. Therefore, while the returns may not be as high, the risks tend to be manageable.

You can also invest in certain entertainment projects that inherently carry less risk, such as a musical’s initial production, an independent film, or the first recording session of a new band. Such investments are usually quite small in monetary value, and may still provide decent returns, especially if the productions go on to become big hits thereafter.

Wes Edens: a successful investor in the sports and entertainment industry

Wesley Edens is a principal, founder and Co-Chairman of the Board of Directors of Fortress Investment Group LLC. The company is an alternative asset management company worth $62 billion.

Wes Edens, together with Marc Lasry, acquired the Milwaukee Bucks in early 2014 for around $550 million. They are both keen to make a success of the team, just as Wes Edens has made a success of his investment banking career. According to Wes Edens on ESPN, this would involve bringing in talented new players, as well as propping up the business side of the team’s operations.

New investors can learn much from the lessons and successes that Wes Edens has gained as an investor in the sports industry. The biggest lesson is that with the right strategies, investing in the sports and entertainment sector can generate both long-term and substantial returns.

By Charlie Brown

Lawsuit finance aims at providing you with instant access to cash advances. You can obtain litigation funding within a short period to help you get a suitable settlement. The money provided helps you handle your bills while you wait for the conclusion of your case.

Litigation financing will ensure that you have enough money to last the duration of the lawsuit process. This prevents situations where circumstances force you to accept unfair settlements owing to your urgent need for money.

Overcoming Financial Challenges

? Funding provides a fair balance between you and the insurance provider. Since insurers are fully

aware of what legal processes involve they have a tendency to delay settlements in order for

plaintiffs to accept less than what is expected.

? You can avoid being in a situation that compromises the value of your case by overcoming your

financial challenges.

? Financial assistance will help you with your bills and enable you to get more funding for your lawsuit. In case you lose the case, you will not owe the funding company any additional money.

? Lawsuit funding companies are not interested in your credit history and they will give you the cash advance without subjecting you to a background credit check.

Immediate Funding

The lender does not expect you to make any payments until your case is fully resolved. If you find yourself involved in a lawsuit and you require money immediately, funding company will give you the cash against the proceeds of the case. Many cases are eligible for the funding and applicants enjoy competitive rates. Check out top consumer reviews.

Legal claims can take several months before you are able to receive a high settlement. When your situation prevents you from working and the case lasts longer, it becomes increasingly difficult for you to manage your financial responsibilities. Lawsuit financing aims to protect you from financial difficulties.

Quick Approval (more…)

By Chris Ebert

Everyone knows the current Bull market is going to come to an end, but nobody can say exactly when, at least not with any degree of certainty. The best most of us can do is look at the signs as they appear.

The obvious signs of an approaching Bear market are huge sell-offs among wide baskets of stocks, such as those in the Dow, Nasdaq, and the S&P 500 indexes. However, a sell-off by itself does not make a Bear market, A prime example is the infamous 1987 Crash in which stock prices steadily rose in the months following the crash.

No, the end of a Bull market requires more than a decline in stock prices. It requires a decline in confidence.

OMS 04-17-15

 

* All profits are calculated at expiration, as a percentage of the underlying SPY share price. SPY is an Exchange Traded Fund (ETF), the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) that closely tracks the performance of the S&P 500 stock index. All options are at-the-money (ATM) when-opened 4 months (112 days) to expiration.
EXAMPLE: If Long Call premium paid is $2 when SPY is trading at $200, the loss is 1% if the option expires worthless.

The Options Market Stages are often good indicators of confidence.

  • Stage 1 (Lottery Fever) is the most confident, indeed over-confident
  • Stage 2 (Digesting Gains) is very confident, and often ideal for sustainability
  • Stage 3 (Resistance) is one in which confidence is waning
  • Stage 4 (Correction) is one in which the limits of confidence are tested
  • Stage 5 (Bear Market) is where confidence has been lost

Currently, the market has entered Stage 4. That doesn’t mean a Bear market is imminent, it just means traders should be vigilant. Confidence is being tested right now. Should that confidence fail, a Bear market would be the logical conclusion. However, the market has been very resilient lately, as evidenced by the remarkable recovery back in October 2014.

A major sell-off now, while the market is in Stage 4, could easily be followed by another major rally if substantial support appears and traders take that as a confidence booster. There is a trend over the past several years for confidence to be slowly evaporating from the market.

It was only a year or so ago when the market would enter Stage 1 Lottery Fever on a regular basis. Then in late 2014, Lottery Fever went away and has not returned. That, in and of itself is no big deal, since Lottery Fever is irrationally exuberant by nature, and therefore unsustainable over the long term.

bathtubsFor most of the end of 2014 and early 2015 the market managed to attain Stage 2 on a regular basis. Even in the absence of Lottery Fever, the ability to attain Stage 2 allowed the S&P to reach all-time record highs. However, since March 2015 the market has not been able to attain Stage 2. The best it could muster in the past couple of months is Stage 3.

The market may get along for many months without Stage 1, but it is unlikely the Bulls can survive for very long without Stage 2. That’s what makes the recent stretch of weeks without Stage 2 so terribly troubling. Confidence wanes during Stage 3. It may wane quickly, or it may wane slowly. But, every day that goes by makes folks a little less confident that the bygone days of all-time highs will return anytime soon.

Without the ability to attain Stage 2, the best prospects for the S&P 500 is that it will become a sideways chop fest. The best that can be hoped for is that there won’t be a massive 1987-style sell-off. While some may prefer a range-bound up-400-points-today down-400-points-tomorrow type of environment, many will be put off by such moves.

Whether the market manages to attain Stage 2 in the coming weeks remains to be seen. It is not something that can be predicted. It is, however, something traders can watch for. And, when they see it, they will know confidence has returned, and they will know what to do when they know other traders are feeling confident. In the meantime, there is not much to do but wait for the signpost to appear.

The preceding is a post by Christopher Ebert, Chief Options Strategist at Astrology Traders (which offers subscribers unique stock-trading perspectives and options education) and co-author of the popular option trading book “Show Me Your Options!” Chris uses his engineering background to mix and match options as a means of preserving portfolio wealth while outpacing inflation. Questions about constructing a specific option trade, or option trading in general, may be entered in the comment section below, or emailed to OptionScientist@zentrader.ca

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