Investing in the Third Dimension of Loss


When the public does something stupid (it does and will), there are numerous dimensions of loss.  Knowing the dimensions, and acting on them, helps find value investments.  Looking beyond the second dimension provides surprisingly powerful ways to see beyond the dust created by the thundering herd.  Third dimension forecasting allows us to see opportunity ahead of the pack and stay there.

gold plated Geneva auo show

Gold plated Mercedes at Geneva auto show.  Record car sales are a reason for some investors to consider speculations in silver and gold.

Most economic news looks at the here and now.  For example, current news show that sales of new car and light truck sales broker a record 17.5 million in 2015.  2016 sales have started at a strong car pace as well.  The economy is getting stronger?  Right?

Wrong.  Record auto sales are not driven by a booming economy but by booming auto lending.

Car dealers are encouraging more people to go into debt.  Right?

Again the answer is no, so let’s follow the money because it does not lead to the near-by strips of car dealers.  The cash flow (get ready for this) to Wall Street (why are we not surprised).  Many of the same big firms that created the subprime mortgage mess have been marketing subprime auto loan backed bonds.

Already there are questions whether fraud is involved.   According to Bloomberg Business News: “Deutsche Bank AG officials are reviewing whether some employees exaggerated demand as they marketed new securities backed by risky auto loans, potentially suppressing yields for investors, according to a person with knowledge of the matter.” (2)

The bank is unsure if employees used marketing practices that were normal salesmanship or if they crossed a line.

Demand for auto debt has led lenders to systematically loosen underwriting standards, which can result in higher loan delinquencies.  More of these bonds are based on six year loans for used cars which means that the collateral may become more worthless than the loan.  Defaults are growing.  For example one investment grade bond was issued in November 2015.  By February 2016, 12% of the underlying loans were at least 30 days past due, a third of which were more than 60 days delinquent.

car loan debt

Graph from Bloomberg on car loan debt.

Hedge funds are already trying to short these bonds (3).   This leads to the second dimension of loss.  If these bonds (there is over a trillion dollars worth of them) fall out of favor, many who thought they had secure high yielding investments (just like sub prime mortgage bonds) may kick off a total run in the stock market.  If sub prime bond failures lead to a market crash, everyone, even those who did not invest in the bonds, will lose.

There are arguments that this type of bond survived the 2009 crash.  Some are structured so that half the loans in the pool could default and all the bond still would be repaid. The high interest rates on the loans are expected to cover any losses from people defaulting.

This is where we reach the third dimension of loss.

The high interest rate on such loans can reveal a deeper third dimension of loss (and opportunity) by subprime borrowers who have to pay such high interest.  What happens when some of these car buyers have their cars repossessed?   How many people, lured by promises of easy credit, end up over their heads in debt?

Zero interest on savings, high interest rates on easy credit create many negative pressures.  There is pressure to invest in higher yielding, riskier bonds and overpriced stocks.  There is pressure for people to spend rather than save.  There is pressure to default on underwater loans.

Debt defaults are horrible for investors.  Missed payments and ruined credit are even worse for borrowers.  This creates the third dimensions of loss that spreads like a cancer though society.  How many turn to alcohol or drugs to ease the frustration in their lives? How many deter contract health problems from the stress?  How many homes are broken?  How many children are abused because of the pressures of debt?  How many pensions will be unable to meet their commitments if these loans go bad?

How many frustrated debtors vote for dangerous politicians to express their anger?

How can we find opportunity in the third dimension of debt?

Look for established companies where the price to book, price earnings and dividend returns are good relative to their history and their sector.  This approach is a powerful way to look ahead and find good third dimension value.

What companies get extra business from stress?  Medical, leisure, entertainment?  Who profits from increased use of drugs and alcohol?  Law enforcement, gun manufacturers, surveillance?  What businesses thrive on broken homes?  Child care, legal, education?  What businesses thrive during contentious elections?  Broadcasting, media, precious metals?  These are third dimension questions.

Once answers to these questions help us zero in on sectors of interest to our unique interests, we look for shares of good value.   The key to increased safety and greater profit comes from combining third dimension foresight and selection of top value stocks.

For example, the odds of gold and silver prices rising from now to November are increased.  The precious metals thrive on uncertainty.  This fact and numerous other 30 year cycles (described below) create conditions for extra profit from lightly leverage investments in gold and silver.

The well known investing maxim, “Buy on the rumor and sell on the news” is only partially correct, especially in the era of split second  communication.  The correct thinking is “Buy good value before the rumors start. Sell when the news pushes up prices so there is no more good value”.

Gary

(1) http://www.wsj.com/articles/subprime-flashback-early-defaults-are-a-warning-sign-for-auto-sales-1457862187?mod=itp&mod=djemITP_h

(2) http://www.bloomberg.com/news/articles/2016-01-14/deutsche-bank-said-to-probe-sales-of-subprime-auto-securities

(3) http://www.bloomberg.com/news/articles/2016-02-11/some-hedge-funds-want-to-make-subprime-auto-loans-next-big-short

Why Leverage Silver ETFs

Turn $250 into $51,888… in Four Years or Less?

I first spotted an opportunity in 1986.   Two short term distortions (in the price of silver and the strength of the British pound) created potential for huge profits.  I wrote in a report (called the “Silver Dip”) that told how to borrow British pounds to speculate in silver and earn over $50,000 profit.  That’s the headline I used then in 1986, “Turn $250 into $51,888… in Four Years or Less”.

The report showed how to take borrow overpriced British pounds and invest the loan in under priced silver.   $250 was required to set up the loan.  No other cash was needed to borrow the pounds.

Readers who followed the report made $46,299 on the no cash investment in only one year

Then in 2015 I spotted the same distortion again.  The British pound was overvalued.  Silver was undervalued. 

I quickly issued a report… the “Silver Dip 2015” that looked at how similar conditions to 1986 had fallen into place.  The price of silver had reached a six year low.  The British pound strength was rising.  The dollar per pound rate was $1.55 per pound, exactly the same as in 1986 and the silver/gold ratio rose over 80 just as in 1986.

That report revealed the iShares Silver Trust, a silver ETF  and during the year after issuing this report, the share price rose from $13.57 per share to $19.60 in 2015.

The rise in the silver price created a nice profit.   The currency and leverage tactics within the strategy turned the nice profit into a very nice profit.

A $10,000 (6,451 British pounds) loan purchased 736 shares at $13.57.  In 2015 the shares rose to $19.60 and were worth $14,425 (up 44.25%).

Those profits were spectacular by any stretch of the imagination but turned out even better because the profits above excluded the forex profit.

In 2015-2016 , the British pound dropped almost exactly as it did 30 years ago!  The British pound fell from $1.55 per pound to $1.33 per pound.

At $1.33 per pound, the 6,451 pound loan only required $8,575 to pay back the loan.  This created an extra $1,425 forex profit.

When the opportunity appeared again last year, I updated the report to  “Silver Dip 2018”.

The 2018 report showed how the opportunity for this speculation was even better than it was in 2015.

Yet the profits have not yet arrived.  This allows me to make an amazing no-risk guaranteed offer to you.

Silver Dip 2019 includes profit calculations for 2019 and I offer you the report “Silver Dip 2019” with a year long guarantee.

“If the profits recommended in the report don’t arrive by the end of the year, I’ll give you a complete and full refund”.

That’s right if the tactic described in Silver Dip 2019 do not hit their target, you don’t have to pay a thing for the report.

Investing in silver ETFs leveraged with margin loans may create extraordinary profits in 2019.

The “Silver Dip 2019”  shows how to easily make an ideal speculation for almost any amount.   The report shows when and how to get margin loans in dollars, British pound, Japanese yen or euro.

In fact you learn how to borrow in 23 different currencies, even Russian rubles, so you can choose the weakest currency with the lowest interest rates.

Low Interest Loans

Interest on the loan won’t eat up profits.  The “Silver Dip 2019” shows how to borrow many currencies right now for less than 2%.

The Silver Dip is only exercised when conditions are absolutely ideal.  Value investors never push this rule.  Investment and speculative markets are full of rumor, conjecture (a lot of it false) and hidden agendas.  The Silver Dip relies instead on a really simple theory… that the price of gold should rise about the same rate as other basic goods and the rise and fall of silver’s price should maintain a parity with gold.  When that parity is out of balance (as it has been since August 2018) silver’s price is ready to explode.

The “Silver Dip 2019” explains how to speculate in silver ETFs plus outlines the following:

The “Silver Dip 2019” also contains four matrices that calculate profits and losses so investors can determine cut off positions in advance to protect profits and/or losses.  The report also looks at how to switch time horizons for greater safety.

Rising interest rates make the stock market highly dangerous in the short term. “The Silver Dip 2019” shows how to create a safe, diversified good value stock portfolio and use it to generate much higher returns with a little controlled speculation in silver.

Learn how to beware of certain brokers and trading platforms, how to choose a good bank or broker and how silver profits are taxed.

The report includes a complex comparison of silver’s price with other costs of living from 1942 to today to help determine its real value.

Finally, learn why and how to use advisers to manage profits from silver dips.

Current circumstances could cause the price of silver to rise rapidly at any time.  Do not delay reading this report.

The Silver Dip sold for $79 in 1986.  Due to savings created by online publishing (we have eliminated the cost f paper and postage), we are able to offer this report for $39.95.

Order now by clicking here.  Silver Dip 2019  $39.95

The benefit of 50 years experience in watching markets, metals, bonds, interest rates and currencies, I have learned many special pricing situations to watch for.

These special opportunities do not appear every day.  That’s why they are special.

Unless you have seen them come and go, it’s hard to see them coming again.

That is why I was willing to wait for years for silver to be in a special pricing position.

Our courses and reports are about finding good value and they have been helping astute readers find value investments, again and again for 50 years.

The “Silver Dip 2019” report shows a current huge opportunity.  I continuously watch for aberrations in currency and precious metal markets.   Sometimes a rare quirk, such as the currency distortions, low cost loans and low silver price  offer potential for profit, with very little risk of long term loss.

Investors who speculate on these aberrations at the correct time can make fortunes.

The time is now.

Success is almost guaranteed.  In fact an 89 year study showed a 99% change of success when sequence distortions are worked in a certain way.

We are stalking precious metal opportunity now.

The trap is set. We are waiting…

This opportunity is explained in the report “Silver Dip 2019”.

You can order the Silver Dip 2019 here for $39.95

Here is why there is no risk for you.  The report is 100% guaranteed.

I do not sell book, reports and courses.  I offer benefits.  If  the Silver Dip 2019 does not bring you the benefits you expect, just let me know any time in 2019 and I’ll send you a quick, no questions asked, full refund.

I can’t promise that silver’s price will rise in 2019 but  I can guarantee you’ll be fully satisfied with the report or… you can have your money back in full.

You can order the Silver Dip 2019 here for $39.95

Gary