Rules of Wealth


Some rules of wealth are set in stone.

Yesterday’s message “Power of Image & Spin” looked at how many leaders (controllers) use sound bites and media to stonewall the public. That message also looked at one way to make, keep and enjoy wealth despite the fact that stonewalling by officials seems to have grown.

stonewalled

I could not help thinking about stonewalling one my recent trip to the Cotswolds. There are stone walls everywhere!

I was recently told that there are more stones in Cotswold stone walls than in the Great Wall of China.  I am not sure who did the counting but Cranham is one of the charming villages built of… this Cotswold stone.

gary-scott-in Gloucestershire

The village is surrounded by ancient beech forests that house seven springs leading to seven rivers.

I lived for several years in this area… in Minchenhampton (Forwood to be exact).  Here is our son, Jake, at our old house there… also built of this stone.

gary-scott-in Gloucestershire

This is a huge old manor house, constructed over 100 years or so beginning in the 1700s… with wonderful views of  the woods and our next door neighbor… Princess Anne at Gatcomb Park.

We were happy to be back in Gloucestershire with Jake and he took us hiking up into the beech forests and down to the springs and into Cranham.

gary-scott-in Gloucestershire

We started at the sawmill, house in a failed sanitorium…  now imbedded with rich aromas of fresh cut wood.

Finally we reached Cranham… hiked past the…

gary-scott-in Gloucestershire

town hall.

We stopped at…

gary-scott-in Gloucestershire

the local pub for a lemonade before working our way back to the car.

Pricknash a Benedictine Abbey set in the heart of the Cotswolds was in the distance.

gary-scott-in Gloucestershire

This is an interesting area. I featured it in my first novel, “The 65th Octave”… which was about the controllers who try to mess with our lives.

The area has a history with novels about controllers as this is where George Orwell lived in 1949.  He had TB and entered a Cotswold’s sanitorium in Cranham, (they must have been popular in this area then) in January that year.   The sanatorium was turned into a commune in the 1960s and remains so to this day.   His novel “1984” was published in June that year and over 400,000 copies were sold in the first 12 months… just months before he died.

Though Orwell’s novel missed in its predictions by 25 years or so… many feel that we now reached an Orwellian world… with newspeak… thoughtcrime and help from Big Brother.

I sure do not know how to change this fact. Every generation has its burden to bear and government intrusion is one of ours.

I do know however that there are several steps we can take to survive and prosper in this type of world.

One step we can take is to look for international investment trends in the shadows. The same technology that allows spin and deceit to mislead a big chunk of the public can help us gain a clearer view of the truth.

This means that we can gain many clues about good international investments that are not obvious.  Global investment hints are subtle.

Here is an excerpt from Chapter 6, page 34, of my novel, “The 65th Octave.”  This book is sold out in print but we’ll have it online soon and I am working on the next… “The 64th Symphony”.

I cannot tell how or what they knew or even who they were. All I can write even now is that I knew. I imagined seeing shadows in the outer realm of my vision that were staring intently at me as if they were piercing my brain. They had focused their total attention and my thoughts, my memories, emotions, my whole being and history were clear to them. First, I knew I was being followed. Someone seemed to know every move I made. I tried to throw them off track by taking the underground to places where I had never been. I would jump off one train unexpectedly and get onto another. I watched and made sure that no one could be following me.

I’m not experienced at this sort of things, but know I was not being followed. Yet when I reached my destination, I knew they were there, watching and waiting. But what were they waiting for? I never knew, nor did I even know who they really were. I could never see them straight on. All I could see were fleeting glimpses spotted out of the corner of my eye or their shadows in a mirror. When I looked they were always gone. But I knew they were there!

This novel was released long before the war on terror diminished so many of our freedoms and rights but it recognized and included in its themes even then, that we as businessmen and investors, rarely get a clear picture about what is really going on in markets, government or the financial system.

Are markets manipulated and rigged? Do insiders and controllers in positions of power line their pockets at our expense? You bet and there is little we can do to stop this happening.

But there are three ways we can take advantage of those who are trying to control us. The answers are hidden in the shadows.

We need to keep an eye on shadow events because we probably never know all the plots that are hatched by others to take advantage of us. Even if we did know, what could we really do about them? Better to be cautious and rich than fooled.

One way to look into the murky side of things so we can spot trouble coming is by watching short interests. One way we can do this is via the International Securities Exchange ISE.

For the last 10 years the International Securities Exchange (ISE) has grown to become a leading options exchange that offers options trading on over 2,000 underlying equity, ETF, index, and FX products. (link to more data are below).

The ISE issues a daily short sales report (see link below) so you can go in and look to see if there are short sales in a particular share or sector.

For example as we approach September and 9/11 one might wonder about security and terrorism.   Can we trust what our media and politicians tell us about our safety?

Had one been looking at short sales just before 9/11, they might have wondered why United and American Airlines were suddenly so strongly shorted.

The short sales report will be quite daunting to many so a somewhat easier approach is to check on indexes. The benefit of these indexes is they can act like spotlights that illuminate the shadowed areas in markets and our lives.

This highlighting can be quite broad because the ISE has created quite a few indexes. These indexes track the performance of publicly traded companies in various industries. ISE sector indexes provide an effective way to see through shadows to see where the big money is putting its money rather than listen to the sound bites and spin.

The ISE has a partnership with First Trust to provide ETFs based on ISE these indexes, so investors can actually invest in market movements if they choose in this way.

Sticking to the September security theme, we can use ISE’s – CCM Homeland Security Index (HSX) as an example.

This index includes companies engaged in contractual work with the Department of Homeland Security, law enforcement agencies, or providing products or services for the following.

The top 13 companies represent nearly 75% weighting of the components in this index and are:

Agilent Technologies Inc
Brady Corporation
Check Point Software (US)
FLIR Systems Inc.
Harris Corp
L-3 Communications Holdings
McAfee Inc
SRA Intl Inc A
STERIS Corp
Symantec Corp
Thermo Fisher Scientific
VeriSign Inc
Zebra Technologies Corp A

If at any time there is a threat of war or terrorism… look at what happens to this index…. not what the politicians and media say.

Right now the index has fallen… a suggestion that the investing world is not expecting any major security issues soon.

ISE index

Here are some of the other indices at ISE that help you see and hear beyond sound bites and spin.

* First Trust ISE Global Engineering and Construction Index Fund (FLM)
* First Trust Global Wind Energy Index Fund (FAN)
* First Trust ISE ChIndia Index Fund (FNI)
* First Trust ISE-Revere Natural Gas Index Fund (FCG)
* First Trust ISE Water Index Fund (FIW)
* First Trust BICK Index Fund (BICK) Bick stands for Brazil… India… China and South Korea.
* First Trust ISE Global Platinum Index Fund (PLTM)
* First Trust ISE Global Copper Index Fund (CU)

Another way to see short sale interests is at Shortsqueeze.com

short sales

Profit from the Shadows!

How can we cash in from these vague movements in the shadows that we might spot?

One way is to follow the same distortions the controllers do. Play their game.

The logic here? Shares are not always  the best place to invest because of the potential for long term loss.  Yet those who deceive us usually invest one way as they talk another.

Shadow watching by its nature is vague and hard to define. The clues you gain will never be clear, but if you hear a lot of media and spin suggesting one thing, but see markets move in the opposite direction… invest with the market.

We live in a murky world and rarely is it safe to assume that what we are told is not what we will get. With so much happening beneath the surface, the ephemeral nature of shadows may be of more value than it would seem.

Gary

How We Can Serve You

How to Have Real Safety

garyheadshot

There are only three reasons why we should invest.  We invest for income.  We invest to resell our investments for more than we had invested.  We invest to make our world a better place.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

This is why the core Pi model portfolio (that forms the bulk of my own equity portfolio) consists of 19 shares and this position has not changed in over two years.  During these two years we have been steadily accumulating the same 19 shares and have not traded once.

The portfolio has done well in 2017, up 22.6%, better than the DJI Index.

motif

However one or even two year’s performance is not enough data to create a safe strategy.

The good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management and the mathematical trend analysis of Tradestops.com.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each major stock market’s history.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His analysis is rational, mathematical and does not cause worry about short term ups and downs.  Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each BUY market.

This is an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required.  You are investing in a diversified portfolio of good value indices.

A BUY rating for an index does NOT imply that any stock in that country is an attractive investment, so you do not have to spend hours of research aimed at picking specific shares.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.  Investing in the index is like investing in all the shares in the index.  You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, Austria, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore and the United Kingdom.

30% of the Pifolio is invested in Keppler’s good value (BUY rated) emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

The Pifolio consists of iShares ETFs that invested in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

Pi uses math to reveal the best value markets then protects its positions using more math created by Richard Smith founder and CEO of Tradestops.com to track each share’s trend.

We use Smith’s  algorithms that calculate momentum of the good value markets.

dr richard smith

The Stock State Indicators at Tradestops.com act as a full life-cycle measure that indicates the health of each stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.

Kepppler’s analysis shows the value of markets.  The SSI signal indicates the current trend of each stock (performing well, or in a period of correction, or stopped out).

The SSI tells you one of five things:

Screen Shot 2017-08-08 at 6.51.59 AM

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Akey component of the Stock State Indicator (SSI) system is momentum based on the latest 521 days of trading.  A stock changes from red to green in the SSI system only after it has already gone up a healthy amount and has started a solid uptrend.

How SSI Alerts Are Triggered

If the position has already moved more than its Volatility Quotient below a recent high, the SSI Stop Loss will trigger.  This is an indicator that the position has corrected more than what is normal for this stock.  It means to take caution.

Below is an example of how SSIs work.  This example shows the Developed Market Pifolio that we track at Tradestops.com.

tradestops

Equal Weight Good Value Developed Market Pifolio.

At the time this example was copied, all the ETFs in the Developed Market Pifolio (above) currently had a green SSI.

We do not know when the US market will fall.  We only do know that it will.  We also do not know if, when the US market corrects, global markets will follow or rise instead.

The fact that the Pifilios are invested in good value markets reduces long term risk.

Additional protection is added by using trailing stops based on the 521 day momentum of each stock in the Pifolio.

Take for example the graph below from our Tradestops account that shows the iShares MSCI United Kingdom ETF.  This ETF had a green SSI and a Volatility Index (VQ) of 13.26%.  This means the share can move 13.26% before there is a trend shift.

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

Pi purchased the share at$31.26 and in this example the share was $34.43 and rising.  Tradestop’s algorithms suggested that if the price drops to $31.69 its momentum would have stopped and it would have shifted into trading sideways.   The stop loss price is currently $29.86.  If EWU continues to rise, both the yellow warning and the stop loss price will rise as well.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

What we do know is that the equally weighted, good value market Pifolios have the greatest potential long term and that math based trailing stops can be used to protect against a secular global stock market correction when it comes.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get when you subscribe to Pi.

You immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

Included in the basic training is an additional 120 page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

You also receive two special reports.

In the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  Then the cycle ended.  Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview.  He said:  Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!

I did well then, but always thought, “I should have invested more!”  Now those circumstances have come together and I am investing in them again.

The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar.  The two conditions are in place again!

30 years ago, the US dollar rose along with Wall Street.  Profits came quickly over three years.  Then the dollar dropped like a stone, by 51%  in just two years.  A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.

This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago.  The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.”   This report shows how to earn an extra 50% from currency shifts with even small investments.  I kept the report short and simple, but included links to 153 pages of  Good Value Stock Market research and Asset Allocation Analysis.

The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

This report sells for $29.95 but in this special offer, you receive the report, “Three Currency Patterns for 50% Profits or More” FREE when you subscribe to Pi.

Plus get the $39.95 report “The Platinum Dip 2018” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the last two years.  The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV).   The second event is that the silver gold ratio hit 80, compared to a ratio of 230 only two years before.

In September 2015, I prepared a special report “Silver Dip 2015” about a silver speculation, leveraged with a British pound loan, that could increase the returns in a safe portfolio by as much as eight times.  The tactics described in that report generated 62.48% profit in just nine months.

I have updated this report and added how to use the Dip Strategy with platinum.   The “Platinum Dip 2018” report shares the latest in a series of long term lessons gained through 40 years of speculating and investing in precious metals.  I released the 2015 report, when the gold silver ratio slipped to 80.  The ratio has corrected and that profit has been taken and now a new precious metals dip has emerged.

I have prepared a new special report “Platinum Dip 2018” about a leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.

You also learn from the Value Investing Seminar, our premier course, that we have been conducting for over 30 years.  Tens of thousands of delegates have paid up to $999 to attend.  Now you can join the seminar online FREE in this special offer.

This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning.   You can listen to each session any time and as often as you desire.

The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.

seminars

Tens of thousands have paid up to $999 to attend.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

stock-Charts

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns can create war.

The chart above shows the war – stock market cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Details in the online seminar include:

* How to easily buy global currencies, shares and bonds.

* Trading down and the benefits of investing in real estate in Small Town USA.  We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.

* What’s up with gold and silver?  One session looks at my current position on gold and silver and asset protection.  We review the state of the precious metal markets and potential problems ahead for US dollars.  Learn how low interest rates eliminate  opportunity costs of diversification in precious metals and foreign currencies.

* How to improve safety and increase profit with leverage and staying power.  The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website.  This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios). His big, extra profits come from leverage and staying power.  At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.

keppler asset management chart

This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

The online seminar also reveals  the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value.  The keys to this portfolio are good value, low cost, minimal fuss and bother.  Plus a great savings of time.  Trading is minimal, usually not more than one or two shares are bought or sold in a year.  I wanted to find the very least expensive way to create and hold this portfolio so I performed this test.

I have good news about the cost of the seminar as well.   For almost three decades the seminar fee has been $799 for one or $999 for a couple. Tens of thousands paid this price, but online the seminar is $297.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription.  Plus you receive FREE the $29.95 report “Three Currency Patterns for 50% Profits or More”, the $39.95 report “Silver Dip 2017” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the Value Investing Seminar right away. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

If you are not totally happy, simply let me know.

#2:  I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.

#3:  You can keep the two reports and Value Investing Seminar as my thanks for trying.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

Subscribe to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Platinum Dip 2018” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Gary

See review of ISE

See all the shares that are the components of the CCM Homeland Security Index

ISE Daily Short Sales Report

Link to shortsqueeze.com


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