Please join me along with Tom Essaye in our next War Room briefing — LIVE this Thursday!
Here are the key facts:
Date: Thursday, September 30
Time: 12 Noon Eastern Time (9 AM Pacific, 4 PM GMT)
Subject: Live Market Update and Portfolio Review
Your participation: Question and Answer Session
And here’s what to do …
Step 1. Post your questions here in advance.
Step 2. A few minutes before 12 Noon on Thursday (9 AM Pacific, 4 PM GMT), click here.
Step 3. Log in with your e-mail address.
That’s it! Tom and I look forward to seeing you there.
Regards,
Claus
P.S. If you have trouble logging in, please call 1-800-711-4090. Live technical assistance will begin on Thursday at 11 AM (8 AM Pacific, 3 PM GMT).
P.P.S. Later, the recording of the briefing will also be available on the weissresearchissues.com website. But we recommend you participate during the live event on Thursday.
{ 97 comments… read them below or add one }
Although gold is hitting new highs and I have a comfortable amount of bullion I am not sure on the proposed changing IRS regulations on gold and how that may impact reporting profits and taxes now and in the future. Can you comment on this and the idea of buying the ETF, GLD if gold is going to continue to rise as the ETF’s are easier to trade in the market place as opposed to going to gold dealers to cash in gold and go through that process and I would certainly like to bag some of the profits on gold but selling my bullion is more emotionally difficult to do especially as it is rising in value so well, thus my asking about getting in on the ETF for GLD.
Hi,Claus.How do the safest utilities perform during steep market falls – are they a reasonable haven against inflation and deflation ?
What is your view on the Norwegian Krone ?
While your Economic Cycle forcast shows a pull back in this time frame, is there a likelyhood that the elections will overshadow the natural cycle and eliminate the pullback in the S&P 500?
Thanks for answering. Chip
How can we access and update (our) Shadow Portfolio using the new Weiss Research Issues website?
Hi Claus,
Here are a few questions that I would like you to comment on:
1) Gold is trading in a bearish rising wedge pattern. Some analysts say that it could possibly pull back to the $1,000/oz. level. Do you foresee this happening? If so, do you plan on taking some profits off the table on your current positions?
2) During this latest rally in the US markets, there are several gaps in the closing and opening prices for most, if not all the indexs, that will have to be filled. If I’m not mistaking, this indicates that the rally will eventually fall back down to fill those gaps. Do you agree with this analogy?
3) Are you expecting positive earnings reports from US companies for the 3rd quarter? The multi-national companies seem to keep beating estimates.
4) Do you expect a double top with the S&P 500 index? What is the chance of the US markets continuing to rally up to the November elections?
Claus,
Given that the stock markets are presently being driven by the huge funds given to Primary Dealers by the Fed now that retail investment has effectively disappeared – POMO days are up days – and that this process is likely to be continued under QEII, how confident are you that your technical analysis based on the historic behaviour of un-manipulated markets is reliable? Are we going potentially expensively short of a market that will simply continue to rise in the face of any amount of adverse economic information as part of a deliberate strategy to push the dollar down and financial assets up?
John
I am seeing references in a number of places intimating that the US government is actively involved in manipulating the stock markets to avoid the perception by the public that there is an economic crisis, and that it is likely to go on at least until the election is over. If so, it seems like buying ETFs to short the market is a risky venture for the next month at least. Your thoughts?
Hi Claus:
Short term, during market correction in October 2010, what do you envision the price range for gold.
Similarly will siver correct more then gold , and what do you envision the price range for Silver.
Hi Claus,
Here are a couple more questions for you to answer during the upcoming war room briefing:
1) Do you intend to double down on your inverse ETF positions PSQ and RWM? If not, the market will have to fall substantially before a profit can be made. Please explain. Thanks.
2) How can this market continue to climb on bad news and an overbought condition? The GDP growth for the 3rd quarter of 2010 cannot possibly be as high as it was in the 4th quarter of 2009, but yet the market is not too far off from the April, 2010 high. It’s almost like the market is being manipulated by the government or inside traders. Is it possible for the government to prop up the markets by buying stocks or stock indices? What’s your thoughts on this?
Claus,
1) Why have you insisted on keeping the single worst performing major gold stock, Kinross Gold, in the portfolio despite quarter after quarter of disappointing news and earnings?
2) Can you positively reassure us that PSQ has not lost its (1:1 -E*) inverse performance correlation with the underlying NASDAQ-100 index, despite the SEC’s warning nearly a year ago that even unleveraged ETFs are suitable for short term trading purposes only and are not meant to be held for longer periods of like a year and a half?
3) Do you agree with the SEC as well as inverse ETF creators like ProShares , Direxion and State Street that inverse ETF’s tend to loose there initial 1:1 correlation over time with the underlying index whose performance they are measured against?
4) Have you calculated how much the NASDAQ-100 would have to tank , in points or percentages, before PSQ get to be just a ‘break even’ position let alone a profitable position?
5) What financial accounting methods (^ FASB rules) allows for the taking of past closed positions [SEF & SH]that both had significant losses, re-purchase them, remove them and their accompanying losses on the ‘Closed Position’ side of the ledger and not add them back into the current portfolio as if the position(s) were never previously owned? For example, our initial position in SEF resulted in a loss of 27% when we originally sold it yet you’ve not incorporated SEF’s previous position back into the current portfolio but instead now show the position with a gain of 2.60%. The facts, according to the mathematics, are SEF as a position has a loss of nearly 25% within the MDCP’s portfolio, not a gain in any way, shape or form. The same is true of SH! Has the MDCP started to use the same accounting procedures as the Fed. and the banks with their ‘mark to model’ valuation of derivatives in calculating portfolio gains and losses?
How does the portfolio show SH with a current position loss of -2.27% yet in the two previous transactions the MDCP had a loss of -16.30% then a loss of -5.00%? When you take all the money we used to buy SH since the portfolio commenced and then subtract its current value it works out to a positional loss much greater than the indicated -2.27% loss on the current Portfolio Position page.
- 2.27%
- 5.00%
-16.30
The above three percentage losses represent the MDCP’s ‘experience’ with SH over the last nineteen months. Would someone please be kind enough to tell me with three such losses with that inverse ETF since the portfolio commenced operations how the portfolio page arrives at a mere loss of about 2.25% for the SH position? Are we ‘starting fresh’ from zero when we re-buy a previously owned position despite the fact that within the same tax year we’ve already had multiple losses in that position? What FASB accounting rule says that’s an okay method of determining financial performance?
Thanks, Claus
* One to one (1:1) performance correlation with an underlying index minus expenses (-E).
^ FASB = Financial Accounting Standards Board.
Claus,
I for one believe it’s very possible that this market can continue to rise straight through to the end of the year perhaps beyond. The fuel for this rally?…….. the mid term election and the expectations investors believe will materialize from a massive vote against the Democrats. This victory by the Republicans and Conservatives may or may not materialize but makes no difference to the economic scenario that will play out despite whichever party holds power in Washington DC. When the euphoria wears off, and it will, investors will be forced to re-focus upon reality with its near certainty of a global financial tsunami. Would you agree this is a possible scenario despite what the technical and fundamental may suggest?
Thanks
Claus,
It appears that the S&P 500 Index formed an inverse head and shoulders pattern between the months of May and September, with the head or low point formed in early July, and the left and right shoulders formed in May/June and August respectively. This is a bullish pattern that may take the markets to new highs. What is your thoughts on this?……and why didn’t you see this pattern? The only thing you talked about in your last briefing was a minuscule head and shoulders top formation, which rarely works out to be a bearish pattern. Please explain this to your members.
Thanks,
Will
Claus,
The difference between the price of gold bullion and that of GLD (one share represents one tenth of an ounce of gold) has, over the time we have held this ETF, gradually widened. At present the price of GLD is about USD3 lower than the price of one tenth of an ounce of gold bullion. This does not appear to be very satisfactory. Please comment.
Thanks
Patience is a virtue that most Western societies sorely lack. Here’s a relevant example of a great company we bought, not at the best time because this company’s stock price went down almost immediately after the MDCP purchased it. However Claus continued to extol its’ virtues and relevancy to the current economic environment, yet the portfolio never bought any additional shares to ‘average down’ the portfolio’s cost, despite repeated reassurances by Claus and The MCP Team that this company and its’ business model would flourish in the current financially trying times. We sold this company’s stock on June 3, 2010 at $39.65 for a gain of 22.46% (MDCP supplied figures). Today, a mere three and a half months later this company’s stock hit a new 52 week high of $45.10 or $5.45 /13.75% higher than the price we (MDCP) sold it for on June 3′rd of this year. That company is FDO/Family Dollar Inc. Does this action indicate a lack of conviction in the company or a lack of conviction in the manager with his own choices? Why did you loose faith in this company Claus even after you had presented numerous well documented and researched reports on this company; What was it that led you to sell this company that you yourself made a great case for owning?
Claus,
In all seriousness, when are You going to make your members some money? It has been 2-1/2 years into this venture, and we still haven’t made any progress. How in the world do you expect me and the other members to fork over another 1-year subscription of $1,500 if you cannot show us a profit? I can assure you that if I do not see any turn-around between now and March, 2011, I am gone. This has been a losing venture from day one, and I will NOT waste any more of my time or money on Weiss Capital Management.
Please address this because we are getting tired and weary.
Kevin M.,
Good piece of writing on FDO. Martin should replace Claus with You as our portfolio manager. I’m sure we would have been in the black by now.
Will,
In twenty months the captain was able to right the BattleStar Galactica but as far as turning this Titanic – Andrea Doria love child around in the time-frame you’ve given Claus to accomplish this seemingly impossible task appears to be just that…….. impossible, if the past performance of the portfolio is any kind of future indicator.
That’s why I’ve repeatedly asked: “Who’s doing the math?”. I’m willing to bet that we will be told that yet another year of membership will be required for the portfolio to achieve its’ objectives. How can I be so certain you may ask? Easily, I’ve done the math and know what kind of performance Claus has to achieve between now and March 2011. Suffice it to say that we’d need many more performers like EGO/Eldorado Gold Corp. merely to just break even by then, let alone make a profit.
Claus is an intelligent man who I’m sure knows exactly what measure of performance he must achieve in order to reach his mid term goal within two years. But let us not loose sight of the fact that by Claus’ own definition of ‘mid term’ he has from 2 – 5 years. Technically he’s given himself three additional years to achieve his goals and still remain true to his revised time frame goal of mid term. What sort of detracts from the ‘mid term’ time frame claim was the simultaneously accompanying claim to have the ability to “make money under any market condition” which implies/infers no time frame other than ‘always’ if you think about it.
I have an expression that I created years ago to use on poorly performing employees, under-performing family and friends and various other people depending upon the situation and goes like this: “Give me reasons for success and not excuses for failure”.
Another favorite expression I heard many years ago that I fancy using from time to time when confronted with someone’s continuous failures and that one goes like this: ‘Excuses are like aholes, everyone’s got one and they all stink’.
How much longer can gold go up without a serious coeection? I’m quite nervous of a move like this without a pullback.
Based upon how gold has pushed higher, at times in leaps and bounds, and other times its’ price has corrected down in leaps and bounds, I am expecting a significant pullback in the price of gold before it continues pushing forward in its relentless march towards its near term goal of $1,500 an ounce. Same may be true of silver and the other precious metals, although silver is more tied to the economy than gold because of its myriad of industrial uses.
This is from ‘ProShares – ETFs – Chapter Two’, of the newly released prospectus for ProShares QQQ / ‘PSQ’ which is one of the portfolio longest held equity positions: ‘PSQ’
ProShares Short QQQ (the “fund”) seek investment results for A SINGLE DAY ONLY, not for longer periods of time. This means that the return of the Fund for a period longer than a single trading day will be the result of each day’s returns compounded over the period, which will very likely differ from the inverse of the return of the NASDAQ-100 Index* (the “Index”) for that period.
The Fund is different from most exchange traded funds in that it it seeks inverse returns and ONLY ON A DAILY BASIS. The Fund also is riskier than similarly benchmarked exchange-traded funds that do not use leverage. Accordingly, the Fund may not be suitable for all investors and should be used only by knowledgeable investors who understand the potential consequences of seeking daily inverse investment results. Shareholders should actively monitor their investments.”
Here’s the link to the PSQ / ProShares prospectus I partially quoted above:
http://proshares.com/funds/prospectus.html?ticker=PSQ
Claus, do you feel that have you used PSQ and the other inverse ETFs in the portfolio in a manner consistent with the sponsors description above describing how these products, leveraged or not, should be used and for what lengths of time they should be held in a portfolio?
Do you believe that your use of PSQ, SEF, SH and RWM are within the suggested guidelines for these products and if so how and why?
On the surface there appears to be a conflict between how you use these inverse products and how the products’ creators as well as the SEC mandated description on the use of these products. Could you please explain to us what you know about these products that different than their creators (sponsors) and the SEC know?
I humbly ask again: “Who doing the math?’.
Respectfully
The Week, to ponder upon China – The cracks in China’s engine; Powered by rip-roaring growth, China just surpassed Japan as the world’s number two economy…………. but are strains starting to show?
How Quickly Has China’s Economy Grown?
It’s been expanding at a staggering pace. For the past three decades, the economy has grown by an average of 10 percent a year, lifting an astonishing 500 million Chinese out of poverty. Although its growth is expected to slow this year to less than 9 percent, China’s 2010 gross domestic product is projected to be $5.36 trillion. China is now the world’s leading producer of everything from toys to consumer electronics and clothing — 60 percent of the world’s clothing is manufactured in China. To feed its industrial appetite, China has become the world’s largest importer of aluminum, copper, and iron ore. “This is just the beginning,” says Wang Tao, an economist in Beijing. “China . . . has a lot of room to grow.”
Might Anything Slow It Down?
Quite a few things. First, China’s growth depends on exports, which makes its economy vulnerable to global economic conditions. China was hard-hit by the 2008 financial crisis and the global recession, when international demand for Chinese goods fell 10 percent, by some estimates. As a result, some 100,000 Chinese factories closed, throwing 30 million people out of work. To revive its sagging economy, China launched a successful $1.1 trillion stimulus program. But both manufacturing growth and infrastructure investment slowed recently, raising fears that China’s economy may one day run short of miracles — with potentially grave consequences for the country’s stability.
Is China Unstable?
Not yet. But while the Communist Party retains largely unchallenged control of China’ s government, the rapid transformation of a rural, peasant society into a 21st-century industrial power has produced real political, economic, and social strains. In recent decades, more than 200 million peasants — of a total population of 1.3 billion — have migrated from China’s rural interior to find work in cities, many of which sprang up virtually overnight (see below). There, uprooted peasants labor in primitive conditions with little job security. Many are also exposed, for the first time, to China’s newly affluent professionals and entrepreneurs, whose conspicuous consumption can stir resentment. Affluent Chinese, says Yi Zhao, a civil servant who lives in China’s heavily industrialized Guangdong province, “collect wealth at the expense of the poor.”
Are Workers Likely To Rebel?
They already have. China was rocked this year by strikes and demonstrations — some violent — by workers demanding better pay and conditions. The boom has made tens of thousands of Chinese so rich that sales of Mercedes-Benzes, Jaguars, and Rolls-Royces soared more than 100 percent in a single year. Meanwhile, hundreds of millions of others still live in primitive huts and scrape out a subsistence living. Widespread poverty drags China’s per capita income down to $3,678 — roughly on par with Angola and Azerbaijan. Tensions over rising inequality have even been linked to a series of horrific attacks on schoolchildren by alienated, middle-aged men who seemed to feel left behind by China’s new prosperity.
Can Education Close The Income Gap?
Not soon. More than 6 million college graduates enter China’s workforce annually — up from 1 million in 1999 — but students often find little skilled work after they graduate. Many end up working for $300 to $500 a month — little more than a factory worker earns, and less than workers with college degrees earned just a few years ago. “The government has failed to create enough jobs,” says Su Hong, 23, a college graduate who’s competing with about 1 million others for 15,000 government jobs. “People’s expectations for employment are getting lower and lower.”
What Else Has Gone Wrong?
China’s breakneck growth has been purchased at the price of creating one of the most toxic environments on earth. Half of China’s 50,000 rivers are severely polluted, and 16 of the 20 cities with the world’s worst air quality are in China — a consequence of the country’s heavy dependence on coal. Unregulated road building and mining have scarred the countryside, leading to disasters like last summer’s mudslides in northwestern China that left more than 1,700 dead or missing. The World Bank says that by 2020, as many as 30 million “environmental refugees” may roam China in search of breathable air and potable water. “We’ve pushed the environment to its limit,” says Sun Haixia, a factory worker in Linfen, one of China’s most polluted cities.
Are Chinese Leaders Worried?
It would appear so. Prime Minister Wen Jiabao recently said he’ll “make sure China maintains a sense of crisis” as it struggles to address its problems; in a sure sign that the government is nervous, people who persist in protesting environmental or political conditions are being hauled off to jail. Chinese leaders have tacitly encouraged a rise in pay scales in an effort to create consumer demand at home, which would reduce China’s dependence on exports. And China plans to invest at least $440 billion in green technologies over the next decade to mitigate environmental degradation. China is also developing rural areas to reduce income disparities between city-dwellers and peasants. But achieving all this will require economic growth to continue at a blistering pace. If the miracle falters, warns Zhou Tianyong, who trains government bureaucrats at Beijing’s Central Party School, China risks falling into a “trap of social and political turmoil, slow economic growth, enduring lack of prosperity, and weak and declining national competitiveness.”
Eating Bitterness
In 1994, Zhang Changhua and Chen Suqin, the married couple at the center of the documentary Last Train Home, left their impoverished village in Sichuan for Guangzhou in southern China. Since then, Guangzhou’s population has more than doubled to 10 million, and its wealth has soared. But Zhang and Chen work long days stitching clothing in a cramped workshop, and return home to a squalid room in a crowded cement building. Like the rest of China’s 130 million migrant workers, they have no unemployment or health insurance, no pension plan, and few legal rights. In China, tireless workers are praised for their willingness to “eat bitterness.” For that feast, at least, migrants are at the front of the line.
The Great Chinese Workers Rebellion is inevitable and unstoppable! The Chinese workers rebellion will shake the worlds’ political and economic stages. It will be unstoppable even by the ruthless Communist Party and should be interesting to watch. Will we support the workers or will we support the Communist Party tyrants? It will almost surely become a defining moment in time as to whether America truly intends to support democracy domestically and globally. It will shake the very foundation of the globes’ political, military and economic stages. It will strike down the new world’s order of a global Keynesian constructed world financial system turning it almost overnight into a worthless house of cards built around worthless derivatives domiciled predominantly in worthless pension funds. Will we support the workers or will we support the ‘Roman Class” political elite currently running Washington….. yet again? It may become one of the more defining events as to whether America really means to support democracy, fascism or socialism domestically and internationally.
Hi Kevin,
As you already know, I am also expecting gold to correct sometime in the near future. I’m just not sure how far it will correct. At what level do you think would be a good point to start adding gold positions? Do you expect gold to pull back to the 1150-1160 level again?……or do you think it will go lower? There is definetly strong support at the $1,000/oz. level, but I wouldn’t hold my breath on that. Please share your thoughts/insights.
Thanks,
Will
Kevin,
Great piece of writing on China. I found it quite intriging…..and I also believe it is very true. It amazes me how the Chinese are destroying their own environment, and continue to pay their workers very low wages without any kind of insurance or pension plans. Something will eventually have to give. The rich are capitalizing off the desperate poor, who will do anything to obtain a better standard of living. When you think about it, it’s really no different than the Mexican immigrants who make their way to our country. They come here and work for very low wages. Except our country continues to dole out unfunded welfare and social security benefits to those who don’t want to work for low wages. I don’t know which is worse. There has to be some sort of happy medium.
By the way Kevin, I forgot that I had asked you before on your thoughts of gold pulling back. You did indicate that you could possibly see gold pulling back to the $1045/oz. level, once it had run its course to the upside. I went back to review some of the old blogs. No need to respond to my blog dated 10/04/10 @ 12:32 PM, unless your views have changed.
What did you think of the latest war room briefing? Claus indicated that he will be selling his gold holdings within the next few weeks to lock in profits.
Thanks.
Hi Will,
Looking at the charts for gold I can see multiple points of support should the market undergo a price correction. Some offer major price supports while others appear to offer significantly less support. I’ve listed what I feel are major support levels should gold decide to pullback in a meaning way.
The following price levels offer minor, moderate and strong support for gold’s price:
$1,250/strong
$1,200/moderate
$1,150/moderate
$1,100/very strong
$1,000/mild
$ 900/very strong
These are approximate price range levels, so for example $1,150 is listed as a moderate support level but the actual range for $1,150 support lies in the $1,140 to $1,157 an ounce.
The $1,145 – $1,148 price level seems a fairly reasonable level for gold on a moderately strong pullback. The worst case scenario I can foresee for gold’s price is around $1,045/.oz which is where India purchased gold from the IMF last year.
Sources in New York and Hong Kong have long inferred that China has a standing ‘open order’ for gold under $1,000/.oz so that may be the ‘floor price’ for gold. How much truth there is in the rumor concerning China’s open order to buy gold under $1,000/.oz we may never know.
This is my interpretation of where I see gold’s price going in the event of a short to mid term correction.
I’m a strong believer that gold is in a secular bull market that has already lasted nearly a decade and has several years , perhaps longer, to run. Some gold experts believe that this bull market rally in gold is getting long in the tooth while others state that inflation adjusted gold should be selling around $2,300/.oz or there abouts.
One thing that concerns me most is the perception by some that gold is becoming a bubble. I don’t believe this is true. The daily traded value of McDonald’s stock is greater than the value of all gold traded globally on a daily basis…….. hardly a bubble. But as we all know many times perception alone can be, at times, sufficient impetus for a major price correction.
Hi Kevin,
After listening to Larry Edelson’s weekly video update (Uncommon Wisdom), he sees gold rising to possibly $1,405/oz. before pulling back. That is one heck of a parabolic move. I never expected it to go that high without a short term correction. Now I’m wondering if gold will make a nice correction. I sure hope so, because I want to buy back in at a better price. Personally, I’d like to see gold pull back to the $1,100/oz. level, but I don’t think that it will. I also thought that gold had very strong support at the $1,000/oz level, since it took three or four times to break up through that level.
It’s deja-vu all over again in my MDCP holdings. This morning all four inverse ETFs are in the red: PSQ, SEF, SH and RWM. Is this a coincidence or yet another example of not understanding how to properly use inverse ETFs and understanding the proper time to buy and sell them [ie: timing]?
Claus, when you said buy SEF and SH I suggested that SPY was probably the better buy at the time. I said this not because I think I’m smarter than you Claus but because, as I wrote earlier, I feel you are not in touch with the mentality of the American investor post the 2008 major market correction. Months ago I blogged my interpretation as to why the MDCP has so badly underperformed against its underlying index since the MDCP’s inception. I warned that this under-performance would continue unless and until Claus modified his indices to take into account the new American investment mentality in light of the 2008 crash and the dot com bubble of 2000. This situation I attempted to document in months upon months of blog entries pointing this condition out as late as August 2010.
Claus, what will the outlook for the MDCP be if the market continues to rise and gold undergoes a severe price correction?
Will,
Last month I wrote to you in a blog that I disagreed with Claus’ interpretation of what the market would do. My opinion back then which I expressed to you was that the market was ‘channeling’ within a range of 9,600 to 11,000 and that I expected that market to push up to at least 11,000 on the DOW. As I recall you didn’t think that scenario would play out and both you and Claus thought the market would correct down. You and Claus both spoke of ‘Death Crosses’ and down markets.
I on the other hand made two forecasts at that time on this blog.
The first forecast was that the market would see 11,000 soon [that event happened today] and my second prediction was that I would buy SPY long before I bought SH or SEF because the market was headed up, not down, before the general election. These predictions are documented on this blog and are easily found. I point this out not to brag but rather to demonstrate my contention that Claus’ failure to adjust his indicators to take into account the monumental market events that occurred in 200o and 2008; Events that I believe had a profound impact on the psyche of the typical American investor. It’s not a matter of being right or wrong but rather a matter of awareness.
Sadly I’ve begun to loose all hope that this MDCP will not see green in the near to mid terms if ever.
I believe the market is severely over bought and have been adding inverse ETFs to my own non-MDCP part of my portfolio but not in 10% chunks which I felt to be unduly risky, but rather eased into them at a rate of 2% – 2.5% increments. The latter method has served me well during this bull leg up. That too was the method I blogged that I would be employing in acquiring my positions in inverse ETFs.
I paid $2,500 for a two year subscription for what? My assets that are dedicated solely for use on MDCP selections is not only loosing money its also underperformed the S&P 500 index by over 50%! Whereas my own ‘common sense’ self directed portfolio is up42%, and that doesn’t even include dividends and capital gain distributions I’ve received. It appears that even Martin who’s allegedly has one million of his own dollars invested in this project cannot even bring himself to attend any more ‘War Room Theater’ episodes. Where’s your pride of ownership Martin? Could it be there’s more shame than pride when it come to the performance of the MDCP versus its’ initial marketing hyperbole or when compared against the performance of the S&P 500 index over the same time frame?
Kevin,
Great call on the markets. You were absolutely right…..and once again, Claus was wrong in selling his long positions too soon. I’m afraid that he may miss taking profits on the Gold positions, if he doesn’t move soon. As I’ve stated before, this membership was a huge waste of money. There is only a 1% chance that I will subscribe for another year. Needless to say, Martin Weiss and Claus Vogt have been huge disappointments. I expected so much more.
Like You, I also believe that the market is extremely overbought, and could roll over at any time. Will it make new highs for the year?…..who knows? It very well could, but I’m not sure that it will. A double top is definetly a bearish sign, but it doesn’t have to make new highs. The next top could be slightly below the April, 2010 high. This latest rally off the August 31st lows has several large price gaps in it (approx. 6 or 7). Eventually, these gaps will get filled……it’s just a matter of time. I don’t expect this rally to go through the end of the year, but then again it just may. Today’s job report came out worse than expected, but the market rallied anyways. That says that this market will probably climb a little more…..possibly up to the elections.
Thanks again for all your insights and knowledge. I for one wish I had listened to you more often from the beginning. At that time, I still had faith in Claus……..NOT ANYMORE!
Kevin, there is no worse feeling than getting ripped off…..and that is what we got my friend. All we can do now is hope that our captain can get this ship turned around. Just don’t hold your breath.
Mr. Martin Weiss,
As noted above by my fellow MDCP member Kevin M., you have not been attending any war room briefings with Claus and Tom. Why? Is it because you don’t have time?…..hardly! I’m sure if this venture was making money, you would be in attendance. Like us, you must be ashamed as to how this portfolio is performing. Where is your pride in ownership Mr. Weiss? Please come forth and speak. Explain to us why Claus has failed to make us a return on our money. I hope you feel good about the results you’ve received. Then again, it didn’t cost you $2,500 for a worthless 2 year membership.
A frustrated and disappointed member who will not be back for a 3rd term if things don’t change,
Will
Number of Holdings: 8 .
Total Invested $459,847.15 .
Cash $488,515.46 .
Total Portfolio Value $948,362.61 .
Total Return Since Inception -5.16% .
S&P 500 Return Since Inception +46.02% .
Contrarian Portfolio vs. S&P 500 -51.19% .
Gold’s hitting new highs and the market just hit 11,000 for the third time in 10 years, some say twice but they seem to conveniently forget the 2008′s correction when the market hit 11,000 on its way down to 6,665 from around 14,000, this time coming back from March 2009′s low of 6,665 on the DOW making it the third time the market hit 11,000. The first time was about a decade ago. The MDCP……… hitting new performance lows. God pray gold’s price doesn’t have a significant pullback because up the creek without a proverbial paddle is where I fear we’ll be.
On a separate note Family Dollar Stores ‘FDO’ was upgraded last week and today by various Wall Street research firms as a ‘strong buy’/'overweight’ with analysts looking for a near term high of $54 to $56 a share. I’ve repeatedly reviewed your very well produced analytical reports Claus in which you documented the technical and fundamental reasons to buy and hold this company’s stock yet the explanation you gave us when you issued your ‘sell alert’ on FDO doesn’t make nearly the solid case for unloading it as your well documented reasons for owning it. Would you please address this issue in your weekly report to members or your next episode of ‘War Room Theater’.
Thank you
Kevin,
Why are You and I the only members who seem to blog? Are we the only members who are disappointed with the results of the MDC portfolio? Surely not! I realize that there are now fewer members than a year ago, but you would think that the other members would express their opinions once in a while. Noone else seems to care that they spent a fortune on something that has not produced good results in return.
Indeed Will, your observation noting the lack of input by other MDCP members suggests to me several possibilities. First and fore most I believe that the MDCP has lost a significant amount of members. If you graph the number of monthly blog entries by members over the period of the MDCP’s existence as well was the number of member questions asked of Claus during episodes of ‘War Room Theater’ the resulting chart show an astonishing decline in those two metrics.
The fact that Martin no longer participates in War Room Theater events lends further proof of a significant membership decline as does the censors leniency toward what is written on this blog, especially obvious is their new willingness to publish entries that are critical of Claus’ and the MDCP’s performance.
Based upon the number of members posting questions to Claus before War Room Theater events has fallen dramatically. I personally believe that there are less that 25 members remaining with this “subscription plan”, their words not mine.
I fully expect Martin Weiss LLC. et al as well as Claus to deliver exactly on what they implied, inferred and otherwise suggested the MDCP would deliver as per the original marketing material from the first and second quarters of 2009. I will get what I paid for from this subscription either through my membership or in a different venue if required.
My continued membership stands as evidence that I have not lost complete faith, yet, in Claus or the MDCP but like everything else in this universe, there are realistic time limits.
Hi Will,
Suspect there are a few like me who are dumbstruck. The MDCP is nowhere near coming up to expectations and how can you turn the ship around without a rudder and a Captain who’s out selling more merchandise to the unsuspecting natives. I’m in the life boat and will probably launch it at the end of my subscription(this November) Have to say though I’m a bit bemused if not angry about the stock market baying for policies that effectively robs hardworking people yet rewards gamblers and spivs whilst not subjecting them risk by backstopping all their excesses. Afraid the whole system has me disillusioned and ashamed to say I’m guilty of the greed side of it too. There are some who believe the whole caboodle is about to disintegrate and considering the shenanigans of the last few years that may be no bad thing.
I think you and Kevin though should be getting a cut of the subscriptions for keeping us sheep entertained while we’re waiting to be shorn,
Take care,
Bob.
I am still here but not sure why. I am sure Claus has only the best intentions in his picks but -51% vs the S&P is truly pathetic. Maybe more common sense investing is needed and less reliance on “indicators” which have allowed us to miss one heck of a rally over the last year.
Well, Will. here we are again on the all star red list with our inverse ETFs. All four in the red with one PSQ headed for a 40% loss and RWM headed for a 20% loss with SH bringing up the rear with nearly a 5% loss and last but not least SEF on its second time in the portfolio and the portfolio’s worst looser when its first time performance is added back into the portfolio’s performance results.
I’m sad to say that it appears the Claus does not know how to properly utilize these inverse ETFs as an investment tool. Can anyone point to a winning trade Claus has made with an inverse ETF(s)?
Clause, if your performance was as good as your seemingly infallible logic that you present in your reports, then why are we doing so poorly? How about answering these types of questions about your actual performance rather than always addressing useless issues that mean nothing when your loosing money? Claus, how about giving us some reasons for success rather than a bunch of excuses for failure……. since day one.
Hey!!!…….There still is some membership life out there! Thanks for the blogs Bob and Fred. It’s too bad that this venture wasn’t a more rewarding one…..or this blog would be full of life.
Sorry to hear that you will be leaving in November Bob J., but I don’t blame you one iota. I believe my membership runs out in March, 2011. When the telemarketer from Weiss Capital Management calls me to renew my membership, I’m going to go Ape-sh_t on him. I actually hope that Claus Vogt calls me! That way I can personally give him a piece of my mind. What’s the chance of hearing from Claus? Ha! Ha!
You all want to know how bad of a market analyst Claus is? He couldn’t time this market if his life depended on it. Over the last year and a half, Claus was caught in two (2) Bull Traps. That’s right!……two Bull Traps!…..and both occurred in the month of July. Both times he recommended to his high-paying membership subscribers to buy and then sell for losses. The idea is to buy low and sell high, but Claus does the exact opposite. Maybe that’s how the Germans do it. Does that sound like someone who knows what he is doing? NOT!!
Sorry for the sarcasm Claus, but you’ve got to admit……You deserve it! It’s pretty bad when one of you subscribers (ie, Kevin M.), knows more about how the market works than you. The only thing you’ve got right so far is Gold……although Kinross hasn’t done anything to write home about.
Claus – I welcome a response/rebuttal from you, but I won’t hold my breath on it. Tell your Compadre Martin Weiss I said hello!
Hi Bob,
We’ve haven’t heard from you in a good long while and feared that you too, like so many credibly dissatisfied members, bailed from this spawn created from what one could reasonably extrapolate was the result of a union between the Titanic and the Andrea Doria.
What I find the most incredulous aspect of this heretofore wealth sapping, opportunity missing experience is the complete disconnect between Claus’ analysis, which on the surface appears both logical and well researched, and the resulting undeniably miserable performance that it has produced.
Claus, with all due respect, what do you attribute your quantifiably poor results to in light of what generally appears as sound market logic from you? Also, as well as to what you expect/interpret the markets to do based upon the indicators you say you rely most heavily upon? Why doesn’t Tom ask these types of very relevant and pertinent questions of you when he ‘hosts’ episodes of War Room Theater? It’s obvious to me, if not most, that most that these War Room meetings are scripted to avoid asking the seriously relevant questions about the market, your performance in managing the portfolio and this portfolio’s uncanny ability to mis-time nearly all sale and purchases since its inception.
Someone from ‘The MCP Team’ needs to go back and familiarize your responses as to why, as an example I’ll use PSQ, you responded with somewhat differing answers when questioned about the continued ownership of PSQ when it was down 5%, then down 10%, then down 15%, 20%, 25%, 30%, 35% and now quickly approaching a 40% loss? Why do you tell us you plan on acting when certain conditions are meet, and when these stated conditions are indeed met you do nothing but give us even more excuses for your inaction?
You stated early on that you don’t give out stop loss prices on the equities you select but rather think nothing of holding MDCP portfolio positions for well past a year and a half all the time watching them loss upwards of nearly 40% of their value.
Why doesn’t Tom ask you why we continue to hold onto loosing stocks like PSQ, SH, SEF and RWM for incredibly and illogically long periods of time just watching them needlessly continue to loose value day in and day out and say nothing. How can you not have the decency to honestly evaluate the past performance and future prospects to members who have paid you for your service with their hard earned money. Such behavior smacks of the lack of a moral compass at the worst and poor service at the least. Even “subscription” services have a moral, legal and ethical component attached to them.
Enough with the soft ball questioning by Tom, Martin or whomever else hosts War Room Theater. We deserve honest answers to the hard questions that are routinely being ignored simply because the answers may be unpleasant. Please do us and yourself a favor by going back and re-reading your reports and re-listening to your War Room event answers since the MDCP’s inception and then try to square them with the MDCP’s performance.
Why are we continuing this performance decline in the MDCP after repeatedly being told that the “ship would be righted?”.
Number of Holdings: 8
Total Invested $457,832.13
Cash $488,515.46
Total Portfolio Value $946,347.59
Total Return Since Inception -5.37%
S&P 500 Return Since Inception +48.22%
Contrarian Portfolio vs. S&P 500 -53.59%
Hi Kevin, can I take it you’re not best pleased then! I’m being a bit more philosophical. I’ve had several IFAs over the years and whilst they haven’t had Claus’s pedigree the results have been the same. If your take on the number of members left is correct then it would be hardly worth Martin’s effort to maintain the portfoilo. In the UK it would assume Zombie status. The rules forbid opening to new blood so it was bound to implode at some point besides it would take some marketing to sell this to even the unsuspecting.
That said at the moment I’m doing alright. Given that Claus is great on rhetoric but a bit shy on the action(probably a legacy of “pulling the trigger” and then running away with his pants down) I loaded up on inverse ETFs (not a great idea) when the Dow was 9800(huh) including Mike Larson’s calls but the losses on these are swamped four to one by the gains from going overboard on gold. At the moment I have stakes in CEF, SGOL, GLD, GDX, GG, ABX, EGO, NEM and even KGC seems to be out of intensive care. Problem is what to do now given that I really don’t have a clue. Is this just a bubble in which case I will need some of Claus’s expert timing to realize my profits or is a debacle really coming and gold is going to be our savior? Would welcome yours or anyone else’s advice on that one.
Sorry folks if this is drivel but I’m not used to public writing but when your abroad, bored ,on nightshift and on pay you’ve got to do something,
Take care,
Bob J.
Claus,
Are you going to post a weekly report on Friday, 10/15/2010? We didn’t hear from you last week. In your last war room briefing, you stated that you wanted to add another 20% to the inverse side of the markets. When do you intend to do this?……or are you just giving us lip service again?
You also stated that you would be taking profits on all the gold shares. Are you still considering this?
How much further do you expect the market to ride higher? If the dollar falls off the cliff, couldn’t the stock market continue to inflate? Please give us your thoughts on this.
Anyone else wonder what happened to the ability to “make money in any market conditions” – one of Dr Weiss’ pitches for this mis-adventure?
I’m a beginner investor. I can’t believe I picked such an expensive portfolio to follow for my first forey into the markets. Oh well, you pay for your education.
The reason I’m still with this service is that every market pontificator is in agreement with Klaus that the market is teetering on the abyss and will fall big and very soon. Klaus obviously thought this was happening when the MDCP was first initiated. Well the market did the opposite which is why our “Contrarian” portfolio is losing. If all the “learned” people agree and the market is about to crash, doesn’t it make sense to stay a while longer so Klaus can give us the proper EFT’s to cut our losses?? We came this far, and we all agree the crash is coming, why not stay the course?
By the way, I consider Will and Kevin M’s blogs alone, are almost worth the fee.
Hi again,
Your sentiment has some merit Sean but it is one that has been expressed in various forms on several past occasions. I sometimes too feel we’re being a bit hard on Claus not least because he seems a nice guy and likeable. The bottom line though is that the MDCP is nowhere near what we were promised. I don’t believe that he’s responsible for the Weiss hype that we’re bombarded with and I can guess that at the briefings he may be tied to the company line but a quick read of this blog would update him of the real issues and is there anything wrong with addressing them directly? In the absence of any leadership people are prone to take their own actions especially after repeated statements are made that are not followed up. If he’s not going to make a move Claus really should say so and why.
Cheers,
B.J.
Wasn’t the Chilean mine rescue great. The miners and their families showed great courage and dignity. The rescuers tremendous skill and dedication. Would that our politicians and leaders were of that caliber. Know that’s nothing to do with the MDCP but it cheered me up.
Sean,
Thanks for the compliment. I’m sure that Kevin M. is appreciative of your comment as well.
I understand where you are coming from in regards to staying the course, but this service is too expensive. Claus has not showed me in my two years of membership that he can make us any money. He went long in the markets too late, and then he turns around and sells too soon. What kind of so-called expert, market analyst does that? To tell it like it is, it’s a market analyst that seems to be on the wrong side of the markets every time. He doesn’t really know what he’s doing. He talks the talk, but his results are sub-par.
Also, what’s to say that this membership will be profitable in the next year? Is it worth spending another $1400 or $1500 to find out. Not to me.
With any luck, maybe his analysis of the markets will play out between now and March, 2011……because if it doesn’t, I will not resubscribe. There’s now way! I’ve had it up to my gills with his bad calls and no calls……and I just don’t see things improving. I very well could be wrong.
Hi Sean,
Yes indeed Sean, many “market pontificators” may be in agreement with Claus, however some clarification and perspective needs to be given to that statement.
1.) According to Morningstar the average mutual fund [open ended, closed end and ETF] classified as ‘contrarian’ is up nearly 30% for the same time period that the MDCP has been operational. That means the MDCP has underperformed the average contrarian categorized portfolio by 35.7%
2. Your statement ” We came this far, and we all agree the crash is coming, why not stay the course?” needs a comparison to events to put its’ logic to the test. The US Airways’ airplane that crashed into New York’s Hudson River was piloted by Capitan C.B. Sully Sullenberger; The captain of the Titanic was named Edward John Smith. Both men new that there vessels had encountered a serious problem that would threaten the lives of many of their passengers.
I ask you Sean, who would you rather have in charge knowing “the crash is coming?” Sullenberger or Smith? We’re moving onto almost two years with this Titanic – Andrea Doria love child and I definitely know who I’d choose as my captain.
The law compels money managers to make the following statement: ‘Past performance is no guarantee/indicator of future results’ and that’s true. Past Performance is however an excellent indicator of the potfolio managers’ capabilities in interpreting financial data and successfully acting upon it, evaluating economic metrics, investment temperament, accurately predicting directional market moves as well as a host of other performance measurement results.
I understand what you are saying but I am beginning to reach the point where mathematically I cannot see how Claus can turn the MDCP’s dismal performance into a winning situation before they’ll [Claus & Martin] will be telling us once again that this is a ‘mid term’ program, remember the definition of mid term is a range of between two and five years, and how they will need yet more money to navigate the MDCP through year three. Claus’ change to emphasizing ‘mid term’ results along with his never mentioning the original MDCP claim (both spoken and written) of having the ability to make money under any market condition, stand as sad proof of the MDCP objectives failures.
I don’t mean to throw cold water on anyone’s remaining optimism as it relates to the MDCP but all of Claus’ professionally written analytical stock market articles nor any of his well spoken War Room Theater market and equity and market related responses mean very little when your portfolio manager has delivered the results Claus has during one of history’s greatest bull market runs. Does anyone ever wonder why Martin who has a million dollars of his own money invested in this poorly performing venture doesn’t even care enough to show up for an event that last only an hour once a month? That behavior by Martin in itself says a world about this whole venture as well as his apparent lack of interest in the MDCP.
I often wonder if Goldman Sachs’ CEO Lloyd Blankfein was doing a performance review of the MDCP and its’ manager, how Claus would fare. How do you think you’d fare Claus? Claus, Tom doesn’t ask you so I will ask and ask you respectfully. How well do you feel you’ve done managing the MDCP? What is your feeling on the performance of the MDCP? Do you believe that you and the MDCP have lived up to your stated and intended goals? Do you feel that members have gotten their “money’s worth” from your investment guidance to this point in the life of the MDCP?
A new alert and as usual great graphics and a compelling explanation. I know that the Weiss motto is Einstein’s definition of insanity but in my total ignorance I feel obliged to act on Claus’s instructions. In the land of the blind the one eyed man is king.
Dumped the gold mining shares. Nice profit but far too scary for me.
Who is this Einstein anyway? Perhaps Martin is lining him up to front his next amazing venture?
Cheers.
Well said Kevin! It couldn’t have been written or said any better. Both Claus and Martin need to own up to their poor performance. I’d almost guarantee you that Claus wasn’t calling all the shots. Martin had a hand in this thing as well. Anybody in their right mind would not pay for another year’s subscription.
Did you notice that Martin is soliticing subscribers for his other Million Dollar Portfolio with Monty as the manager? I wander how that venture has panned out for those subscribers? Does anyone know? Is there a way to find out how it is doing Kevin? I would be curious to know. I remember that there was a subscriber to this portfolio that jumped ship to Monty’s portfolio back at the beginning of the year.
Bob J. – That was a miraculous rescue of the Chilean Miners! That kind of miracle would cheer anyone up. Do you think that Claus can rescue us from this sinking ship that we are on? I seriously have my doubts.
Enjoy your weekend everyone!
~~~~~~~~~~~~~~~~~~~~ ~~~ URGENT ~~~~~~~~~~~~~~~~~~~~~~~~~
Could a statement by FDIC Chair S. Bair be an ominous warning of another toxic asset laden bank crisis? Has this Washington insider become an oracle warning those listening carefully that the nations trouble banks have done nothing with the worthless derivatives sitting on their books as ‘off balance sheet’ entries? I’ve copied and pasted her brief remarks and there is one thing I’d like you to do if you decide to read her remarks. That is, Remember while reading Ms. Bair’s remarks that the Federal Government [US Treasury] through the TARP program bought ZERO DOLLARS / $0.00 of these worthless assets. Congress under the Bush – Paulson prodding gave the Treasury $700 billion dollars to purchase these bad assets from the banks. They purchased none… the same amount purchased by the Obama – Geithner administration. Ask yourselves how this squares with Ms. Bair’s comment urging the banks to do “rigorous internal analysis” about the range of possible risk exposures.
Ms. Bairs’ remarks:
Government FilingsUS trying to assess foreclosure crisis scope-FDIC Sun, Oct 17 11:46 AM EDT WASHINGTON, Oct 17 (Reuters) – U.S. financial regulators are trying to gauge the scope of improper processing of foreclosures while banks need to assess their level of risk exposure, banking regulator Sheila Bair said on Sunday.
Federal Deposit Insurance Corp Chairman Sheila Bair said in an interview on C-SPAN’s “Newsmakers” that the problems with processing foreclosures appeared to be an industry-wide practice, at least with larger loan servicers.
“I think this is really a symptom of size. It’s very unfortunate,” she said. “So in our backup supervisory capacity we are working with our regulatory colleagues. I think it is necessary for the regulators to go in and verify.”
Last week, attorneys general from all 50 states said they were looking at allegations some banks did not properly review files or submitted false statements to evict delinquent borrowers from their homes. They are investigating accusations that lenders and banks employed “robo-signers” to sign hundreds of affidavits each day without vetting all the information.
“We have been told that this is a process issue – that all of the information is in the file, the problem is the person who needed to sign the affidavit had not been looking at the file before they’d done so. So we need to independently verify that,” Bair said.
“Foreclosure is a very serious thing and it should only being undertaken after loan modification efforts are not feasible. And that the files are fully documented.”
In addition, Bair urged banks to do “rigorous internal analysis” about the range of possible risk exposures. My emphasis.
“We need to get a full handle on all of these issues,” she said. “If it turns out this is just a process issue then I don’t anticipate the exposures to be significant.
“If it turns out to be something more fundamental then we’ll have to deal with that. But I think we need to get all the information before we jump to any conclusions.”
I believe that the market is caught between a box of fine Godiva chocolates and a two ton falling bolder. The market wants to continue its move up fueled by Wall Streets’ expectations of the coming elections and the ouster of much of Mr. Obama’s socialist agenda. Wall Street loves grid-lock and with Washington’s power base split between the Democrats and the Republicans, they expect the little that does get accomplished in Washington will essentially be meaningless and will in turn benefit them.
The other side of the coin consists of people like Gerald Celente, Ron Paul, Peter Schiff and 70% of the American public who realize all too clearly that we are sitting in a speeding car headed for proverbial brick wall doing 200 miles-an-hour and ain’t no election gonna save anyones behind. That group probably includes most of us who can clearly see the devalued dollar’s handwriting on the wall.
The smell of a bad storm is beginning to permeate the air, caution, alertness and agility are the tools that survival will depend upon.
KRS only 3% down since the alert on friday. Given the MDCP’s track record that’s not too bad.
Was it Wellington who said, when told the credentials of a soldier he was going to promote”Yes but is he lucky”
Iceberg on the starboard side Captain.
Glad I dumped the miners!
take care.
Sorry Claus, could you wipe the egg off my face. Can you do anything about bullion?
Anyway I like humble pie,
see you,
It appears that Claus missed the opportunity to take profits on some, if not all of the gold positions. Now there is a BIG SURPRISE! He didn’t do what he said he was going to do. What’s up with that Claus? You haven’t changed one iota. Once a bad market timer……always a bad market timer. Granted, gold will go much higher…..but You said you were going to take some profits and buy back in at a later time. I think you’re just afraid of doing anything right now. This market must have you befuddled. If you’re not sure what that means, ask your pal Martin. He’ll explain it to you.
Over and out!
Bob, you do know the definition of insanity, don’t you?
In case you’ve forgotten I’ll refresh your memory.
Insanity: ‘Repeating the same action over and over again and expecting a different result’.
Although I must say Claus always makes a very compelling case for his recommendations the problem lies in the timing of the executions. This time however I agree not only with his timing but also with the logic he’s used to make his decision to act at this point in time.
Oddly enough, although I completely agree with the evidence he’s presented in making his case for going negative on the financials, he didn’t mention what I believe are several immensely critical events that will have a profoundly adverse consequence.
After some in depth research I am of the firm belief that The United States of America for the last two to three weeks has been experiencing a ‘financial run’ on its’ debt. Does anyone honestly believe that within a matter of months China went from the largest hold of US debt to its current position of number three. Now I’ll bet your saying to yourselves…… Well, since China was largest holder of US debt and Japan was the second largest holder of US debt then Japan must be the biggest holder now. Well you would have been right but only for several months. You see the Japanese lost that dubious honer to somebody that you probably would never have guessed or maybe you would have. Okay I’ll let you make one guess. If you said “I am” then pat yourself on your back for knowing what most other Americans don’t. While the American populace has been preoccupied by the non-stop love affair the media has with the election, their government in Washington in conjunction with a private corporation [The Federal Reserve Bank] became the single largest holder of US debt! Knowledgeable and credible sources estimate that the US taxpayer is now on the hook for TRILLIONS of dollars of our own debt. The Fed.’s policy of quantitative easing (QE) has the US taxpayer buying his own debt. Think about what that means. It basically means that you are paying twice for the same item. It’s like going to the supermarket, buying $50 worth of goods and paying the cashier $100. Even the combined wealth of Bill Gates and Warren Buffet couldn’t long withstand the cumulative effects of that kind of wreckless spending and grossly overpaying would have on their ‘checkbook’. There is however a way to avoid the debt problem that effected our ‘Gates-Buffet checkbook’. The answer….. a printing press. With the printing press at its disposal the the government has the easiest method to pay bills it really doesn’t have the money for by endlessly printing more and more cash which in turn debases the value of the nation’s fiat currency. Suddenly all the bills are now cheap but everything else has become quite expensive due to the rampant hyper-inflation caused by the excessive printing of money in the first place.
The speed at which the US surpassed China and Japan who went from first and second to second and third largest holder of US dept is clearly the result of an external “run” on the dept of the United States. There perhaps may be internal sources participating in this current ‘run’ but only time may reveal those sources if they exist. I believe that the worst financial meltdown since the Great Depression of the 1930′s has already begun and the best hope we have of making our way to the other side lies with Ben Bernanke. Yea, the very same guy who originally stated the entire sub-prime mess was only between $120 to $150 billion dollars and will not have any material impact on the rest of the economy. Indeed the only thing that stands between the very real possibility of financial collapse and us is, to the horror of many, Fed. Chairman Ben Bernanke, the very same guy who never saw it coming in the first place as well as one of the major culprits responsible for the crisis in the first place. Let us remember he was Alan Greenspan’s Vice Chairman and right hand man for many years prior to his installation as King(a/k/a Chairman) of the Fed.
The government’s plan to address the financial maelstrom has become crystal clear and judging from the number of top Obama staffers and financial advisors bailing ship (Romer, Orzek, Emmanuel and a host of others) one can reasonably deduce that the worst segment of the second financial leg down will be quickly bearing down upon globe not just the United States soon.
I’m inclined to give Claus accolades on this call of his but first I still would like a mathematical answer from Claus as to how much the NASDAQ-100 has to pull-back before PSQ becomes at least a ‘break even’ position in the portfolio.
Will,
I agree we should have taken some action with our gold positions earlier as you pointed out in your previous blog. I’ve been saying it for nearly a year to Claus, Martin, The MCP Team, the janitor or anybody at Weiss that would listen and honestly consider the merits of selling Kinross Gold Corp./KGC because Kinross has been one of the worst performing major league gold miners. We continue to hold this perennial looser despite months of disappointing earnings, forced mine closures, labor problems and well over a year of just plain miserable market performance.
I’ll ask again despite having asked repeatedly for more than a year and not getting an answer. What is it about Kinross Gold Claus that keeps you seemingly enamored with this under-achiever?
If you feel the portfolio needs to own Kinross for some inexplicable reason couldn’t our indirect ownership of Kinross via GDX be sufficient enough ‘ownership’? Why do we need to needlessly devote potentially useful money by keeping it tied up in the long term poor performer that Kinross has amply proven itself to be?
By the way I think I’ve figured out why Martin can no longer bring himself to devote one hour a month of his time to attend the monthly episodes of ‘War Room Theater’, despite once having a million dollars of his own fund committed to this venture. Below is what I believe a good indicator for Martin’s apparent MIA status.
Number of Holdings: 9 ~
Total Invested $546,542.79 ~
Cash $392,479.85 ~
Total Portfolio Value $939,022.64 ~
Total Return Since Inception -6.10% <- ~
S&P 500 Return Since Inception +48.13% <- ~
Contrarian Portfolio vs. S&P 500 -54.23% <- ~
It probably doesn’t help either that all five of five inverse ETFs the portfolio owns are currently in the red and also a long term gold position that too is in the red despite the fact that gold’s price is up 26.21% over the last year*.
*http://www.goldprice.org
Hi again,
Thanks Kevin for a well crafted, thoughtful and conscientious assessment of the situation. I obviously feel suitable chastened by your comments as compared to my flippancy. The truth is I stopped taking any of this seriously some time ago. Not particularly the Weiss foundation which on a daily basis alternates between Snake oil salesman and Messiah but the whole financial system which is reminiscent of an out of control circus. Billion pound bailouts for banks, home reposession for the poor,totally conflicting policies and our own multi-millionaire Eton educated Treasury head telling us “we’re all in it together” Fact is our leadership is woeful. Yours appears now quite weak and lacking direction. Ours, even if they’re following the right policies are doing it without any moral authority.
The irony now is that as a member of the MDCP I find myself anticipating the markets downfall with some relish and disappointed when there are “signs of a recovery,
Pretty sad really.Ah well back on dayshift and a couple of beers may put things into perspective,
Cheers,
Bob.
And the portfolio’s value deterioration continues unabated ………
Number of Holdings: 9
Total Invested $544,035.91
Cash $392,479.85
Total Portfolio Value $936,515.76
Total Return Since Inception -6.35% <–
S&P 500 Return Since Inception 48.79% <–
Contrarian Portfolio vs. S&P 500 -55.14% <–
Claus with all due respect do you think that it will ever be possible for you to turn a profiit? I ask this in all seriousness because it looks increasingly like that is not part of you long term plan.
Martin has apparently lost interest in this particular million dollar portfolio and is now in sales mode to kick off yet another Million Dollar Portfolio with a new “golden boy” who stands to turn incredible profits in no time.
Fool me once…………..
Hi Jim C.,
Claus Vogt is not Santa Claus. He really doesn’t care whether his members are happy and making money. He just goes about his business, pretending that this ship will get righted in due time. I, like Kevin M., feel that unless this market turns down very quickly, it could be another 1-2 years before the profits start rolling in……and that’s no guarantee. My suggestion to you is that if you don’t see a turn around between now and the time your subsription expires, I would bail off this ship and swim to shore. Even if the waters are shark infested. There are very few members now, and within a few months, there will be even less. It won’t be worth Claus to invest any of his precious time into this portfolio. You’ll just have to lick your wounds like the rest of us ginny pigs and chalk it up as a lesson. Claus has been asked many a time “When are you going to make us some profits?”…..but he never answers. I take that back. Right before the 1st subscription was about to expire, he said that he would have this portfolio in the black by April or May. Guess what?……HE LIED TO US! The fact is…..he doesn’t know what the heck he is doing? He just talks a big game. For all we know, he could be a big drunk or something.
Claus……are you reading this? I sure hope so!
Over and out!
Bob J.
I know what you’re saying. We are both invested in the inverse ETF’s, but the earnings reports keep coming out beating expectations. How can this be? The market keeps rallying, but the financials are really lagging. Noone wants their economy to go down the tubes, but if it does….who wouldn’t want to profit from it? The more the market keeps rallying, the more money we lose. Hopefully the market will pull back enough to take profits on the inverse funds, and at the same time, gold pulls back as well. I for one would like to add to my gold positions.
In late 2007 when the market rallied to make a double top, the financials lagged then as well. And we all know what happened next. I think it’s just going to take time for this market to fall. Will it meet or take out the March, 2009 lows?…..who knows. I wouldn’t bet on it. What is your thoughts on this Kevin M.? Do you think we will again see the March, 2009 lows in the US markets? Please share your thoughts.
Thanks for your knowledge and wisdom.
Hi Bob,
I actually didn’t feel your remarks were flippant nor is it ever my intention to chastise any fellow member. Please accept my sincerely felt apology if I caused you to feel as if you had been chastised by my grammatically lacking and remarkably unremarkable remarks.
The reality of the situation is I don’t believe your remarks were flippant but rather straight on correct in assessing the current situation with the failing economies of the West, the extremely poor performance of the MDCP which is exacerbated by the feeling that you have indeed gotten the promised “ride” the MDCP spoke of when they initially marketed this underachiever with all the pomp and circumstance of Cleopatra’s first state visit to Rome at the request of Julius Caesar. That actually reminds me of the $55 million spent on Obama’s installation and coronation during the 2009 Presidential Inaugural Spectacular.
Just like the excitement and future promise of real change the Obama election seemingly offered the electorate which never really materialized cost him the loss of much of his support, you like myself and probably most of the remaining MDCP members have lost nearly all hope that the promise of this new venture initially instilled in all its members. We’ve all now now that in both instances that hyperbole taken to the extreme in the end only generates frustration and anger and not the expected profits from the MDCP or change as is the case with Obama.
With current results like this:
KGC = -3.53%
KRS = -1.09%
PSQ = -37.97%
RWM = -20.58%
SEF = -0.63%
SH = -6.12%
S&P 500 Index since inception of the MDCP = + 49.11% <– This Will is why your frustration with the current status quo is both valid and quantifiable. I still can’t figure out how SEF and SH have only -0.63% and -6.12% respective losses when they both have over 20% losses in the 2010 tax year from the first purchase and sale. I’m still waiting for an answer from Claus informing me which FASB accounting rule allows for not to factor back in a previous loss incurred in a position(s) that was incurred in the same tax as the repurchase occurred. Simply put how can we only have a position loss in SEF of only -0.63% after experiencing over a 30% loss when we sold it the first time in year 2010? Are we just forgetting the 30% plus first time ownership loss and starting fresh with the round two purchase? Where does the generally accepted accounting rules as espoused by FASB (Financial Accounting Standards Board) state that this is an acceptable practice? The same is also true of SH.
I know what the MDCP’s most likely answer will be: ‘That how Fidelity calculates it, it’s not us”. That’s answer, if given, would be disingenuous at best. It’s only when a repurchase of a previously owned position is longer than 31 days after its previous sale does SEC rules allow a new performance statistic to be calculated for that position. However, under current FASB rules, IRS laws and SEC regulations if these multiple purchases occur within the same tax year then the proper adjustments must be made to account for the previous results of that equity to correctly reflect its true annual performance results. I can only imagine that this is not being done by the MDCP for several reasons.
First, most of these rules, regulations and laws apply to professional money managers and not to sellers of “subscriptions” or “rides” which happens to be the category that Weiss puts itself into. Convenient and profitable too, we probably would have had a much more successful investing experience selling MDCP subscriptions rather than buying and following its’ plan.
Secondly, it only a snapshot of Martin’s portfolio and may not reflect the actual manner in which Dr. Weiss’ taxes will be prepared. What it does credibly succeed in doing is shinning a spotlight on and exposing the thought process behind the statements and actions of the individuals running the ‘subscription organization’.
Thanks
The above sentence should read:
I’m still waiting for an answer from Claus informing me which FASB accounting rule allows for not factoring back it into the previous loss/gain incurred in a position(s) that was incurred in the same tax as the repurchase occurred.
I’m still waiting for an answer from Claus informing me which FASB accounting rule allows for not factoring back it into the previous loss/gain incurred in a position(s) that was incurred in the same tax year as the repurchase occurred.
Claus,
This morning the charts are showing a ‘golden cross’ formation. What does this mean for your investment strategy?
Kevin are you still in JINFF?
Hi Kevin,
What do you think about the last two (2) buy recommendations (TBT and EUO) from Claus? Since he is shorting the Euro, does this mean he is bullish on the Dollar? I presume he is expecting bad things to come out of Europe before too long. Would you buy these recommendations now? Please share your thoughts.
Thanks.
Well Kevin,
This is starting to become a love in. Didn’t for one moment think you were criticizing me. Just a turn of phrase of mine that when I looked at my past entries it dawned on me that whilst the impact of the MDCP on my finances wasn’t a disaster there may be others who took Martin at his word and were feeling pretty aggrieved which made some of my inane comments rather inappropriate. More appropriate is your assessment of the Weiss organization and Martin in particular. Fear your wasting your breath though as I don’t think you could paint a red face on him
Yes Will and Jim it does look like we’re flogging a dead horse but there must also be a touch of masochism in me as I’m probably going for to go for Claus’s latest calls. In for a penny in for a pound (don’t know what the American colloquialism is). Any chance of them being more successful than most of the others are at the moment? I say at the moment because much of what Claus says appears in my ignorance to have the ring of truth to it. He of course is looking at the same stats as the Fed, the difference being that they are in the driving seat and feel that they have the tools to avoid the train crashing whereas Claus doesn’t. Perhaps Martin is doing his bit for the U.S Treasury which obviously wants to reduce the personal wealth of all its citizens?
As I’ve said I also will probably pack the MDCP in November which coincides with my job in Azerbaijan finishing and me retiring (yes I am that old). Strange to think that if we had only broken even I would probably think the insights I’ve received and this blog in particular would have been a reasonable trade for the subscription.
Take care everyone
Bob J.
Hi Bob, Just as in the UK we here in America, and I’m in New England, we use the same expression: ‘In for a penny, in for a pound’, we don’t even change the word pound to dollar. We try not to fix that which is not broken. Yes I still am in JINFF/China Gold International [the recently changed there name from Jinzan]. I also like Chinese infrastructure stocks whose project are predominately funded by the central government in Beijing. I believe , after nearly a year’s worth of research that I have discovered the Chinese “water company” that Jim Rogers keeps talking about but won’t disclose its’ name. I have been purchasing that company for about six months now.
Will, your question asking about Claus shorting the Euro because he thinks the dollar may rally brings with it some troublesome issues.
1. If Claus believes the Euro will weaken and the Dollar strengthen why hasn’t he sold any gold? And yes, I do understand that TBT is a short As the dollar rose last week the price of gold took a big hit. This is yet another fine example by Claus of saying one thing and then doing nothing when the time for action comes. It’s this type of investing mentality that has us sitting on a 40% loss in PSQ, a 21% loss in RWM as well as sitting on our hands while EGO’s profit went from nearly +120% gain to a low last week of around an +85% gain. In other words why did Claus watch the portfolio loose nearly 25% of its’ gain in EGO if Clause was starting to see the dollar strengthen and the Euro weaken? I suspect most analysts would have lightened up on their gold positions. Most ‘Economics 101′ students understand that there is typically an inverse relationship between gold and the dollar. I don’t understand the lack of action as it relates to the portfolio’s gold positions in light of the two new recommendations by Claus. Same is true of the loss we took in the profit margin gain in GDX. KGC is a pathetic choice to have owned and continue to hold. This makes no sense to me whatsoever as the past year for Kinross has been awful and its’ near to mid term future prospects look to be troubled as well. Only if Kinross becomes the target of a takeover will we ever see anything close to a respectable return for this major, problem filled, gold miner.
2. Over the last several months I have written on this blog that this portfolio would be in a world of hurt if the market rallies, which it did and gold has a pullback in its’ price which it too did. With only gold and inverse ETFs in the portfolio the odds on my prediction would be at least 50% correct. Indeed, in the short run my call was 100% correct. It’s not a lucky guess but common sense that indicated to me that my expected scenario would play out.
3. The problem with TBT, if there should be a problem, will be if the Euro weakens substantially against the dollar prior to or during the second round of the global financial crisis then the US Dollar with strengthen in kind (flight to quality syndrome) and TBT will become another big looser on the MDCP’s list of big inverse ETF losers. This same scenario is possible for the Euro but not as likely a scenario as it is for the US Dollar.
If Claus expects the Dollar and Euro both to decline than what currency(s) does he expect to do well and why haven’t we purchased it/them in ETF form?
I believe many analysts fell the dollar will keep falling off the cliff forever. Before the dollar collapses, if it does, it will undergo a massive upward correction that will wipe out the dollar shorts before it takes its final death dive. Currencies are a very risky business as are leveraged inverse ETFs. I can clearly see why Claus believes he needs to structure the portfolio as he is doing but his timing again is making me leery. He may very well be right with his assessment but this rally could last for several more days, weeks or even months before his predicted scenario realizes fruition. In the mean time the portfolio’s new additions run the risk of going the way PSQ and RWM have.
Which reminds me that Claus still hasn’t answered my question: ‘How much does the NASDAQ-100 have to decline before PSQ becomes a ‘break even’ position at minimum? I’ll even offer a hint Claus… it’s much greater than PSQ’s current loss of -38.78%.
Do I believe that the market will revisit the March 9, 2009 lows of 6547.05 on the DOW?
The answer lies in the Dow Theory and a working understanding of what happened to US markets during the period between 1937 – 1939.
Only Ben Bernanke will know when the US can no longer afford to continue paying for this ‘recovery’, actually a much more accurate description for what’s happening with the economy is a ‘cover-up’ rather than recovery.
Bottom line, I believe the market collapse could reasonably happen within the next two years. I suspect the worst news concerning the true condition of the financial system will be revealed after the US election and it will be released in a controlled manner. That’s something George Soros and I both agree upon. Under the worst case scenario the financial maelstrom may hit us soon after the election. My guess is one year from today the market will be substantially lower than where it sits today.
Here’s an interesting clarification sentence found in all ProShares inverse [leveraged or non-leveraged]
ETFs :
The Fund seeks daily leveraged investment results and does not seek to achieve its stated investment objective over a period of time greater than one day.
Claus, what percentage of decline does the NASDAQ-100 index need to sustain before PSQ becomes at the minimum a ‘break even’ position in the portfolio? Also would like you to address the issue of ‘correlation decay’ (the effect time has upon the 1:1,2:1 or 3:1 correlation of an index’s performance and the performance of the ETF that’s measuring its own performance against) and how it relates to, and impacts upon all inverse ETF’s and their performance.
The next sentence in the ProShares Series of inverse ETFs states:
The Fund is designed to be utilized only by knowledgeable investors who understand the potential consequences of seeking daily leveraged investment results, understand the risks associated with shorting and the use of leverage, and are. The Fund is not intended to be used by, and is not appropriate for, investors who do not intend to actively monitor and manage their portfolios.
I must in all honesty express my reservations about purchasing double leveraged (2:1) inverse ETFs where there is doubt I can do as ProShares suggests: ” willing to monitor their portfolios frequently”. As is so typical of bankers their definition of “frequently”, oddly enough, is no where to be found either in the ProShares prospectus nor at the ProShares web site.
Although past performance is not an indicator of similar future results the MDCP’s previously poor experience with un-leveraged (1:1) inverse ETF’s like PSQ, RWM, SH and SEF makes me somewhat apprehensive about now buying leveraged (200% / 2:1) ETFs. Although past performance may not indicate future results, it does as I have previously stated, lend itself to credible and plausible conjecture. Does using double leveraged ETFs mean that it will take us half the time it took PSQ to loss nearly 40% or does it mean the portfolio’s overall performance will now loss twice the value twice as fast?
Claus, with all due respect may I suggest that you at least give members some guidance with using ‘stop loss’ orders especially now that the portfolios’ new additions are double leveraged and chances are they probably won’t be as “frequently monitored” as ProShares and knowledgeable professionals would recommend.
I am confused about our portfolio. It seems when precious metals do well our inverse ETFs do poorly and vice versa. We are is essence hedged 100%. I don’t see us going anywhere in the future with this strategy. Comments would be appreciated.
Temper your excitement because the portfolio’s performance continues to deteriorate:
Number of Holdings: 11
Total Invested $641,203.08
Cash $296,558.31
Total Portfolio Value $937,761.39
Total Return Since Inception -6.22% <–
S&P 500 Return Since Inception +47.36% <–
Contrarian Portfolio vs. S&P 500 -53.59% <–
So Kevin,
If you know the collapse is coming, you feel we should stay the course on Claus’s recomondations?
Hi Sean,
It’s not that I know anything for certain or more than anyone else, I don’t. What I do know however is that this country is facing a serious, some would say staggering, set of financial problems that the government is not only not addressing but is actually exacerbating the problem with:
1. Quantitative Easing (a/k/a buying your own dept with yet more taxpayer borrowed money)
2. Excessive Borrowing ($1.5 trillion this fiscal year alone and $1.3 trillion next fiscal year)
3. Unfunded & Underfunded Pension Funds (both private and public)
4. TARP – Not a single bad asset was bought from the Banks, Pension Funds or Insurance Cos.
5. Fed. & Treasury re-allowing banks to once again value their worthless portfolios, laden with derivatives (CDOs & CMOs as well as other exotic financial instruments ) using ‘Mark to Model’ rather than ‘Mark to Market’ value determinations as the FASB recommended nearly two years ago. This allows banks to carry/value their loan portfolios that are essentially worthless at 90 to 100 cents on the dollar.
6. The estimated $5 to $12 trillion dollars sitting on the books of the nations’ banks as ‘off balance sheet’ derivative entries plus trillions more of worthless derivatives buried within the nation’s shadow banking system that are hidden from the view of everyone except the Federal Reserve and the Treasury, both whose honesty and transparency is at best “questionable”.
7. Municipal Bonds issued by near bankrupt states, counties, and cities whose own pension funds are still weighted down with near worthless triple ‘A’ rated non-performing CMOs and CDOs. Credible statistical evidence indicates that the value of the worthless securitized triple ‘A’ rated residential and commercial mortgages derivatives as well as the near worthless value of the securitized residential and commercial construction loans has predominately found its’ home in pension funds, mutual funds and retirement accounts. When the times comes for these pension funds to start paying out benefits to recipients, a withdrawal process that has already begun with the baby-boomers, where will that money come from? Certainly not from those near worthless triple A rated non-performing and under-performing securitized mortgage backed securities, after all as the expression goes: “you can’t get blood out of a stone”.
Yes Sean, I agree with Claus’ dire outlook for the markets and the financial system in general, both his foreign and domestic expectations for a second global meltdown in the world’s financial system. Where I differ with Claus is in its’ timing. As I have often previously written I honestly don’t believe that Claus truly appreciated nor took to heart Ben Bernanke’s words, under oath, to Congress that he would “do whatever it takes” to avert another financial catastrophe. I believe that the past performance of the MDCP offers up solid proof as to the merits of my claim. Had Claus taken Bernanke’s words more seriously I believe his [Claus] performance and that of the MDCP would not have been the poor performers that they have been for nearly two years they’ve proven themselves to be.
Just like 9-11 had a profound impact upon the American psyche the ‘dot com’ bubble of 2000 and the’ great bear market’ of 2008 had and continues to have a profound impact on the psyche of the American investor.
One must ask themself: “Why after nearly two years of operation is the portfolio continuing to have ‘timing’ issues? Why hasn’t the MDCP whose major selling point was ‘the ability to make money under any market condition’ been unable to turn a profit in one of the biggest bull market runs in history? Why has Claus on numerous occasions stated that when certain market conditions are met then the MDCP will do X, Y and Z and then when this stated conditions come to fruition he fails to act in the manner he stated he would? Why publish a guide offering up 11 laws of investing do’s and don’ts and then proceed to break 8 of the 11 within six months? What successful investment tactic calls for the purchase of an equity (PSQ), watch it loose 5% of its’ value and continue to literally sit on one’s hands watching while your investment then proceeds to loose an additional 10%, 15%, 20%, 25%, 30%, 35% and now a 38% loss? No ‘stop loss’ orders needed here……. why not?
This was true of PSQ, RWM, SEF, SH and others. What successful investment technique suggests that you hold a sector ‘dog’ for well over a year when that sector (gold) is on fire and your pick KGC is spilling red nearly the entire time you’ve owned it? Seems like a needless waste of money and time doesn’t it? What is the sound logic offered up to defend such practices? It appears that we’ll never know as Tom apparently doesn’t think such issues important enough to ask Claus during a scripted episode of ‘War Room Theater’. Has anyone actually seen Claus’ performance figures for the period of November 1, 2007 to March 9, 2009? If not, then why not? If he is to captain our ship during the next anticipated major market meltdown then shouldn’t we know how well he did during the last major market meltdown? Unfortunately we’re all too familiar with his performance in the latest bull market.
Yes Sean, I agree with Claus that the market is headed down but so far his [Claus] performance suggests to me that his anticipated timing of events perhaps is sorely lacking as the past performance of the portfolio solidly indicates. That’s just my opinion based upon my own personal experience with the MDCP.
Respectfully,
Kevin M.
Kevin,
Thanks again for your insight and for trying to keep Claus honest. Unfortunately, he doesn’t care to answer our questions and concerns. Why is it that he didn’t send out a list of questions that were not answered during the last war room theatre? I think he might suspect that we are on to him.
He obviously didn’t feel that the questions were pertinent to his game plan of making us money. Oops…..I just experienced a brain fart. He hasn’t made us any money yet, why would he start now? A $2,500 2-year subscription down the drain. Thanks Claus and Martin. You both are really swell guys.
Kevin…….what are your expectations of the market after the elections are over? Most bears are expecting a sharp sell-off, but I’m not convinced of that. I think it will most likely be a correction with another rally. The major sell-off may not occur until next year. Your thoughts on this are……………?
The earnings reports continue to beat expectations, which has really surprised me. Microsoft released their earnings report after the bell today (Thursday), and like most others, it beat the estimates handily.
Kevin,
Thanks for your response, I just finally got a chance to read it.
To be continued.
The below edification to my previous above remarks includes the FASB rules changes for proof sourcing of my remarks and claims.
Banks were the primary beneficiaries of accounting-rule changes in April of 2009 – amendments to FASB rules 115, 124, and 157, allowing banks greater discretion in determining at what price to carry certain types of securities on their balance sheets and recognition of other-than-temporary impairments.
* http://www.fasb.org
Not that I really care, but has anyone else noticed that there was no War Room presentation in October. I guess you can only rehash the same stuff so many times before your credibility wears thin, eh Claus?
Claus,
Knowing from the lips of Ben Bernanke to the Congress of the United States the following words: “I will do whatever it takes to restore confidence and liquidity to US financial system” and knowing the FASB rule changes I (#115, #125 and #157) allowing banks greater discretion in determining at what price to carry certain types of securities on their balance sheets and recognition of other-than-temporary impairments, I must ask you; Why in Gods name are we buying bank inverse ETFs?
Just curious, thanks
Quantitative Easing is bad for bonds as Pimco’s Bill Gross recently wrote in an op – ed piece several days ago. It is however bullish for stocks in the short to mid term.
Bernanke’s QE2 policy is old news that somehow seems to have been overlooked by the MDCP as the portfolio’s performance strongly suggests. Bottom line, once again timing of portfolio purchases continues to be a serious ongoing problemwith the MDCP.
Jim,
Just replay the previous 19 episodes as they are all basically repeats of the same incessant hyperbole.
The only difference now is that Martin can’t even bring himself to appear for a ‘shortened’ hour each month to participate in these scripted War Room Theater episodes, he now sends Tom to perform his old functions. Does Tom now have a million dollars of his own money in this perennial looser?
What a disaster Kinross Gold is and has been! Gold is up over $40.00/.oz and Kinross is down nearly 2% in the portfolio. Please Clause, I have respectfully asked you at least 25 times over the last 19 months as to why you continue to hold this problem filled dog. Why Claus, why?
According to Larry Edelson, a close in the Dow above 11,256 will lead to a rally to 11,887.19. In his view stocks could act as an inflation hedge against a falling dollar. That scenario would certainly be bad neww for our large holdings in inverse ETF’s.
Today looks like the market will close above Larry’s target so it appears that once again the MDCP will take large hits in the ensuing weeks.
On another note: Given the precipitous decline in the dollar it strikes me as a little curious that UDN (invers dollar fund) was not suggested for the MDCP.
KGC what a joke – this appear to be the Aaron’s rents of gold miners.
Ok this is after the fact and the MDCP is a long term strategy , however given the importance of the Big events from the last 2 days you would expect some coherent message from the Weiss institute. Before the events of 2nd and 3th Claus was saying he sees a topping formation and a reversal and gets positions in Inverse ETF’s , Monty Agarwal was floading my mailbox with info about his view and he said the events could very well be anticlimactic ?
These BIG events do not show up every week ! Should the message not have been the Republicans are winning, the printing press will go into hypermode, so in the short term the Dow WILL go up and GOLD will fly through the roof, Get NOV 56 Call options on GDX, instead of talking about anticlimactic and buying Inverse ETF’s ?
Claus’s charts make great PR but the Fed’s latest confirmation of QE2 and by definition it’s support of the markets leads “investors” to believe they are on a one way bet which apart from gold we are on the wrong side of and have been for a long time.Is anything likely to change this scenarion?
cheers,
Bob.
Well, after yesterday’s meteoric rise in gold’s price of nearly $50.00/.oz it is now mathematically possible to roughly calculate what the ratio amount between gold’s price and Kinross Gold’s stock price is. Before gold’s jump yesterday Kinross has a portfolio position loss of approximately a -1.3%.
After gold’s nearly $50 jump Kinross now sits in the portfolio with a meager gain of +0.52%. That roughly translates into a +1.8% increase in KGC’s market price for every $50.00 gain in the price of an ounce of gold.
When the portfolio bought Kinross in 3/2009 gold was around $920/.oz and KGC’s stock price was around $18.74. Today gold is selling at nearly $1,400/.oz and KGC stock is selling at $18.84, a wildly fabulous gain of 10 cent per share after holding this puppy for 20 months.
Claus, why is gold’s price risen approximately +50% but Kinross’ stock price is only is +0.52%?
Worse yet KGC has only been in the black for several days, actually I believe it’s been in the black 1 day but I can’t verify that so I’ll give the MDCP the benefit of the doubt.
What happens now…. if gold has a corrective pullback, even a modest one, KGC will again become a loosing position. Hasn’t the time to sell this ‘bad boy’ arrived? We’re even, shouldn’t we sell and buy a gold miner that is actually participating in gold’s bull market like EGO and GDX? NGD, GG GDXJ and a host of other gold mining stocks offer a chance to recapture losses and missed opportunities for profits that Kinross has all along this rally missed?
Looks like we’re going south again for the second time around with SH and SEF. SH is down 9.78% as I blog this. Contrary to what some misguided thinking may suggest the second time around in this case is not a charm but merely more disappointment added to the already existing mountain of disappointment that the MDCP has produced .
It appears to me that the MDCP keeps trying to rush a market correction and financial disaster far sooner than it can be logically expected to occur. The massive correction that we all anticipate probably wont hit until Q1 or Q2 of 2011.
Fundamental and technical analysis methods successfully used in the past as indicators of market or sector direction are now almost useless without incorporating the intentions and actions of the Fed. and Treasury. Claus, Ben Bernanke’s words and actions render your expectations of success into the frustrations of failure, once again, from poor timing. Poor timing resulting in the failure to seriously take Bernanke’s words to heart as well as a failure to recognize the new investor psyche that currently prevails among Americans after the 2000 dot com bubble and the 2008 bear market correction. Do you ever wonder why your very well written analytical reports expounding the technical and fundamental reasons for your market recommendations usually turn out to be inaccurate? I first suggested this failure to incorporate the ‘Bernanke – Geithner’ factor into your indicators might be the reason the MDCP’s market performance has been dismal at best.
That’s my assessment as to why the MDCP ‘s performance has been what it has been to date, unacceptably poor.
Respectfully
Here’s some proof. these figures are from 11:30 AM, Friday Nov 5, 2010:
Number of Holdings: 11
Total Invested $635,391.61
Cash $296,558.31
Total Portfolio Value $931,949.92
Total Return Since Inception -6.81% <–
S&P 500 Return Since Inception +53.48% <–
Contrarian Portfolio vs. S&P 500 -60.28% <–
These performance numbers speak for themselves.
Claus, please consider prefacing your new book with the your performance results managing the MDCP. As Martin is fond of telling you what a “good job” you’re doing managing his one million dollars in the MDCP I assume you’d like to share those “good job” results with the rest of the world, especially your readers.
I know your an ardent believer in full disclosure and trust you’ll ‘make the right and proper decision’.
Respectfully
Just one more observation, I was taken back somewhat to see in the <Weiss Online Store that the Million Dollar Contrarian Portfolio is not a premium service but a “Money & Markets” service along with ‘Dad’s Income Portfolio’. Also the ‘The Foundation Alliance’ which was once listed as a premium service is now classified as an ‘Educational Service’.
Does Dad happen to have a timing service that fully understands the American investment scene and how to time the purchase and sale of equities? Some of us malcontents here wish that dear old Dad was still around, as malcontents like the smell of success from time to time.
“I thought your Crisis Profit Hunter issue that came out today was EXCELLENT!!! Lots of good information I have to admit that I didn’t understand, until this issue, that as the dollar declines–US dollar denominated commodities will increase in value. (Hope I’ve got that right!) Thanks for doing a great job!”
Cathy, Crisis Profit Hunter subscriber
How interesting that in the Weiss Online Store the page that describes the premise behind the MDCP as well as markets subscriptions to the MDCP should have:
1. A testimonial from someone named Cathy talking about her subscription to ‘Crisis Profit Hunter’ which she apparently recently acquired based upon her testimonial. How does one give a product testimonial when they have not had the product long enough to fairly give an evaluation of said product value?
2. Not a single testimonial from a current or past member of the MDCP.
3. No past performance figures of the MDCP were given to the prospective subscriber.
4. The MDCP’s procedural description states that Martin will send out buy/sell alerts 48-hours before the portfolio executes a trade(s). In reality Claus, not Martin, sends out the 48-hour alerts to subscribers. Martin’s seemingly too embarrassed at the MDCP dismal performance to even bother showing up for the obviously scripted episodes of ‘War Room Theater’ let alone send out alerts.
It doesn’t take very much insight to see the fate awaiting this service. Like mutual funds that consistently underperform the market or their peers they are usually liquidated or merged into another fund, in this case it would be another Weiss offering.
To see the trading history of MD Rapid Portfolio (managed by Monty) go here, and see what we are missing (NOT)…. http://www.weissresearchissues.com/trading-history
My subsciption expires mid Jan’11 – and I am taking Will’s advice. I am jumping ship (then) and heading for the shore, even though the waters are (is) shark infested.
I have cashed in my PSQ (loss of 20%), and hope it’s not too bad a move. As Kevin says, the ‘Maths’ doesn’t add up. From my brief experience, i think a stop loss is essential in this investing game (and life). This is my money and not Martin’s.
Kevin – Hurray on JINFF !!! Any more nuggets for the next 6 to 12 months?
MJ
Hi again,
Claus’s latest missive appears to be coming round to the “its not quite working” thought.It’s not him that’s wrong of course but the markets.Is he preparing us for another sell alert just like the one in August that saw us dump our equties just as the Dow was on the rise,or will he be right this time just like the broken clock.This is quite an interesting read with added pain thrown in. As with MJ I will probably throw in the towel but like a book that you think you know the ending it’s still difficult to put down,
cheers, Bob J.
Hi MJ,
As always it’s such a pleasure when we hear from you. Your previous contributions to the blog along with the contributions made by Bob J., Jim C. and the remaining members has been my greatest source of satisfaction and pleasure in an otherwise less than perfect plan that has somehow been transformed from “profit under any market condition” [short term, near term, mid term and long term] to some members and the MDCP claiming it was always a long term endeavor. A simple examination of the MDCP original marketing material circa 3/2009, which I still have, nowhere indicates, implies, infers, states. or otherwise suggests that the goals of the MDCP are solely long term in nature. Long term by it definition as used to describe an investment period is five (5) years or more. Here again , a simple examination of the MDCP original marketing and promotional material actually implies, infers and otherwise indicates net profits will be realized in investments periods running the entire investment time-frame horizon. At -60% under performance as compared to the portfolio’s underlying comparison benchmark of the S&P 500, it’s fair to say that to date the MDCP has not kept true to its’ marketing claims, but I digress.
MJ, I own a company that I started acquiring about the same time as JINFF and it too has been a nice winner for me as JINFF has been. It to is an Asian mining and mineral, including REEs [rare earth elements] which have been in the news lately because of the Chinese embargo on Japan and their new worldwide export restrictions on REEs. This company is into gold mining and the mining of other precious metals.
The company: ESMNF / EURASIAN MINERALS INC. and the link below will take you to their homepage. >
http://www.eurasianminerals.com/s/Home.asp
The price might be volatile in the short run as the US Dollar is expected to rally in the near term which would exert downward pressure on the stock’s price but this would in turn make it more compelling a stock to me. This is unlike Claus’ picks as it’s a smaller company. Check it out for yourself. Again, keep in mind that Claus is the ‘expert’ here, not me, so I’m not suggesting that anyone buy it but to merely look the company over and draw your own conclusions. This company offers a great growth opportunity but with the potential for great profits is the accompaniment of an elevated risk profile.
Kind Regards,
Kevin
Hi Kevin
Thankyou for your blog, and as always full of wisdom, charm, and wit. I shall miss these, from you and others, when the time comes.
I think what disappoints me most is when the Captain ignores the fee paying passengers’ concerns. Ofcourse forcasts can be wrong, but it would be helpfull if constructive blogs were answered. Silence is definately not golden here. Is the Captain still on the ship ?
Rgds
MJ
Let’s play Trivial Pursuit:
QUESTION: How many times over the last month has PSQ hit a new 52 week low?
QUESTION: How many times over the last month has the NASDAQ closed down for the day and how many times over the last month when the NASDAQ closed lower for the day did PSQ also close lower despite the fact that PSQ is an inverse ETF that was designed to go up in price when the NASDAQ-100 went down?
QUESTION: How much longer than a year and a half does an investor continue to hold a stock that has over a 40% position loss?
A.) Wait until you have a 50% loss, then dump / flush it?
B.) Wait until you have at least a 25% loss in another inverse ETF [RWM] then sell both?
C.) Call for another 7-6-2009 ‘en mass’ wholesale sale of all inverse ETFs in the portfolio?
D.) Do nothing?
E.) Pray for a reversal of your misfortune?
Winners will NOT receive an all expense paid trip to Disney World as that money was spent .
Correction,
I inadvertently stated the ‘en mass’ sell date by the portfolio as 7-6-2009, in reality it was 7-6-2010.
Sorry for any inconvenience.
Here’s a copy and paste of a blog I wrote on Nov 5, 2010:
Kevin M 11.05.10 at 9:31 am
Well, after yesterday’s meteoric rise in gold’s price of nearly $50.00/.oz it is now mathematically possible to roughly calculate what the ratio amount between gold’s price and Kinross Gold’s stock price is. Before gold’s jump yesterday Kinross has a portfolio position loss of approximately a -1.3%.
After gold’s nearly $50 jump Kinross now sits in the portfolio with a meager gain of +0.52%. That roughly translates into a +1.8% increase in KGC’s market price for every $50.00 gain in the price of an ounce of gold.
When the portfolio bought Kinross in 3/2009 gold was around $920/.oz and KGC’s stock price was around $18.74. Today gold is selling at nearly $1,400/.oz and KGC stock is selling at $18.84, a wildly fabulous gain of 10 cent per share after holding this puppy for 20 months.
Claus, why is gold’s price risen approximately +50% but Kinross’ stock price is only is +0.52%?
Worse yet KGC has only been in the black for several days, actually I believe it’s been in the black 1 day but I can’t verify that so I’ll give the MDCP the benefit of the doubt.
What happens now…. if gold has a corrective pullback, even a modest one, KGC will again become a loosing position. Hasn’t the time to sell this ‘bad boy’ arrived? We’re even, shouldn’t we sell and buy a gold miner that is actually participating in gold’s bull market like EGO and GDX? NGD, GG GDXJ and a host of other gold mining stocks offer a chance to recapture losses and missed opportunities for profits that Kinross has all along this rally missed?
As of today ’11-10-2010′ a mere five days after I wrote the above about Kinross Gold at 2:20 PM is sitting in the MDCP portfolio at a loss (yet again) of -.54%. Claus this is easy stuff, why it the MDCP not seeing this? This call took me only five days to nail.
Respectfully
Correction:
Sorry, the last sentence should have read ‘why is the MDCP…….’ and not ‘why it the MDCP…..’?
Kevin
Claus,
Do you know what you and George Soros have in common?
The answer is you both bought, held and are both loosing in your positions of Kinross Gold. What is it the both you and George Soros see in the company that the rest of us don’t?
Respectfully
Claus,
With all due respect how about answering just a few questions from the multitude of questions that you have repeatedly been asked since the inception of the MDCP but inexplicably have avoided seriously addressing over the last twenty months rather than soliciting additional questions for the upcoming War Room Theater episode?
Questions like:
“Why have you continued to hold Kinross Gold for a year and a half despite its extremely poor performance during what in fact has been one of the greatest bull market runs historically in the price and value of gold?”.
or
“What investment theory, school of economics or successful Wall Street/High Street investment management firms teaches or accepts the premise that it is a wise or acceptable investment practice to buy and hold an equity position while riding it down to losses greater than 30% or 40% for an indeterminate amount of time and without even mental stop losses in place?”.
May I again, with all due respect, ask you to present the membership with a frank, candid and honest discussion as to why most of the MDCP’s equity selections and timings of buy/sell recommendations have both consistently been very disappointing; As much to you as us I would reasonably suspect. Perhaps I’ve made some troubling claims here but being that reality is the MDCP grossly under-performing the underlying index the MDCP, and I hasten to add, itself chosen by the MDCP, to measure its’ [MDCP] own performance against, that being the S&P 500 by nearly -60%, it’s difficult to envision that scenario with anything but frustration by everyone say perhaps a party(s) with similar as well as perhaps other interest(s) which may in fact be the primary interest.
Thanks
Hi Kevin,
I’m back from vacation. That explains why I haven’t blogged in a while. I recently listened to Ike Iossif’s interview with Carl Swenlin, dated 11/05/10. See “Top Advisor’s Corner” under the home page of http://www.decisionpoint.com. Mr. Swenlin is very bullish on this market and thinks that the S&P 500 could reach the 1400 level by Spring. Imagine what that would do to the inverse positions in this portfolio. I can’t believe this market has that much momentum behind it. I thought for sure that this market was topping. The inverse head and shoulders pattern on the S&P 500 suggests that we could see 1250 or so, but I can’t see it going to 1400. If you get a chance, please listen to the audio and give us you thoughts on Mr. Swenlin’s projection.
Thanks in advance,
Will