Your Econ Professor Lied to You

Forget Everything You Were Taught [Morning Reckoning] October 10, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Your Econ Professor Lied to You - No, we’re not tumbling into the market abyss… - There is no fool-proof way to beat the market… - But this trading tool is a lot like magic… [WATCH: America’s #1 Income Investor]( Let me introduce you to one of my close financial contacts... He might be the most successful investor in America right now. In fact, [his unique income philosophy has allowed him to generate years’ worth of returns – in as little as 2 days](. I have never seen anything quite like it. That’s why I’m urging you to [watch this video]( he made ASAP. He’s agreed to show you how anyone could make rapid ‘income trades’ for themselves. [Watch this video to learn about a trade that could make up to 166% in 10 days](. [LEARN MORE]( Baltimore, Maryland October 10, 2023 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, Stocks are once again caught in a vicious chop this week as emerging geopolitical strife throws new wrenches into the market’s gears. No, we’re not tumbling into the abyss. In fact, I would characterize what we’re seeing as a normal pullback. The averages marched off their lows and didn’t look back during the entire first half of the year, with many stocks continuing higher into the late summer. It was an easy time to find snapback runners and other strong trends. Yet all good things must come to an end. Fall is in the air – and cracks have appeared in the markets. It’s not time to sound any alarms. Not yet! Stocks are caught in a typical seasonal pullback at the moment. Nothing more, nothing less. As I’ve mentioned before, I’d be more concerned if stocks didn’t take a break this fall. If we’re hoping for any type of year-end melt up, we need a fall pullback to help set the table for the impending rally. But let’s not get ahead of ourselves… We won’t have a clear path until the averages bounce. Or, if the bears have their way, we finally crack below key levels. The best move is to sit on our hands until the market offers us some clarity – one of the most difficult tasks required of traders and investors. It might feel like you aren’t doing anything constructive when you aren’t buying or selling. But this couldn't be further from the truth. Messy market conditions give us an opportunity to review past trades, reassess our strategies, and plan our next moves. These choppy markets have allowed me to tell you a little bit more about my story, how I found trading, and how you too can learn to think like a trader to improve your market returns – and even change your life. Over the past couple weeks, we’ve discussed some core trading principles… I’ve noted that successful traders take advantage of opportunities when they present themselves – long or short. We also talked about how traders don’t have to tie themselves to a wall of glowing monitors to make money. Yes, it’s possible to buy and sell just a couple times per week, if that. Profitable traders can have lives outside the market, attend their kids’ soccer games, and even take off time during normal market hours. Imagine that! We discussed how profitable traders need to reject the idea that fundamental company information has any predictive power over short-term price fluctuations. Fundamental and economic analysis is undeniably important in the long-term – but it’s useless for attempting to determine when to buy or sell stocks. Finally, a trader must learn that he can’t obtain a secret edge in the markets. There’s simply no special information that can give us an advantage over the pros or help us predict the future. [Biden Admin Furious Over This New “Alternative” Currency]( Take a close look at this photo: [Click here to learn more]( [What you see here is a new “alternative” currency that’s taking America by storm…]( One which could ruin Biden’s CBDC plans. It’s already popping across the nation… including Utah, New Hampshire and Nevada. [If you’re worried about Biden Bucks then you must watch this short 2-minute video that breaks down how this “alternative” currency works…]( [LEARN MORE]( Price is Truth I know some of these revelations might be hard to swallow. After all, it goes against everything we were taught in school. If you’re a slow learner like me, it might take you years to come to these realizations. But the sooner you can accept these core trading concepts, the quicker you can begin booking consistent profits. That brings us to strategies. If we accept that thinking like a trader is the only way to consistently make money over any timeframe, how can we begin to put these ideas to work in the real world? The first step is a complete reliance on price. A trader insulates his mind from the news and hype, opting instead to focus on price action and other irrefutable facts. Why is price irrefutable? As legendary technician Ralph Acaompora explains, unlike earnings, price is never restated. If a stock closes at $50, that is the closing price on that date forever. End of story. There is no debate as to the price of a security at any given moment. The quote is the quote. This means we can accurately plot a price chart over any timeframe. Thanks to the marvels of modern computing, this requires no research or skill whatsoever. We simply pull up an interactive chart from our brokerage trading platform, or any other stock market research site of our choosing. Price is at our fingertips over any timeframe we choose. The “Magic” is in the Charts Charts are a trader’s best friend. Unfortunately, too many trading tourists think there’s something magical about the lines we draw on these stock charts. Of course, this is completely false. I can attest that there’s no alchemy involved in plotting lines on a chart. These lines simply connect price points of interest. Since price is never restated, we can use our price charts to pinpoint areas where large groups of traders and investors have exchanged shares. That’s important information! If price is churning sideways and continues to get rejected every time it rallies toward $50, we can assume this is an important price for this particular stock. This is an area where shares have exchanged hands on multiple occasions, and the stock is running into sellers every time it teases these levels. If our fictional stock finally moves above $50 after multiple attempts at this area over a significant amount of time, this tells us that the sellers have been overrun by more aggressive buyers, which typically leads to a strong move higher. Now, you have a situation where anyone who bought shares at $50 is more reluctant to sell as the stock moves higher. Why would they sell now? They’re showing strong gains! That creates a snowball effect, leading to a fast move higher as fewer eager sellers can drag the price down. This is what happens when a stock breaks out – it clears a level that has acted as resistance and is moving into blue skies. No magic required! If we are able to find and harness these breakouts, we can buy a stock just as it’s making a strong move higher. The fundamental reasons for the move – if any – simply don’t matter. All we have to do is play the percentages. Some breakouts fail. Some market conditions aren’t as conducive to trading them. But over a long enough timeframe, the odds will work in our favor if we’re managing our risk properly. To be continued… Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [AI Discovers Breakthrough New Cancer Treatment?]( [Click here to learn more]( Just recently, scientists in Canada were able to use AI to create a new cancer treatment in less than 30 days! Now, cancer alone is a significant market worth hundreds of billions of dollars annually… Just think about the implications if AI were to find a cure and take over this market. Now take a moment to picture what might happen if AI were to cure other diseases like Alzheimer’s… heart disease… and more – as I fully expect it will… [It could be worth trillions of dollars of economic impact – and keep in mind we’re still only talking about one industry](. The fact is, AI is the single biggest innovation in the history of humanity. That’s why I believe anyone who invests now – while this new technology is still in its infancy – could see the chance at making generational profits. [Click here now to see the 3 tiny AI stocks best positioned to profit](. [LEARN MORE]( In Case You Missed It… The Banking Crisis Isn’t Over Sean Ring, Editor [Sean Ring] SEAN RING Dear Reader, I spent most of my banking career in an investment bank’s sales and trading division. That means I had hedge fund managers and other institutional money managers shouting down the phone at me all day. It's not as glamorous as you think, trust me. But the intellectual caliber of the workforce there, amoral though they may be, is staggering. Almost everyone has a top degree - which used to mean much more to me than it does now - and is incredibly intense. So, you can imagine my shock when I got to the private banking side, where relationship managers know almost nothing about the products they sell. Now, I’m not claiming all investment bank traders and salespeople knew that CDOs-cubed were a terrible idea. Watch The Big Short for confirmation on that. However, private bankers, known inside the industry as relationship managers (RMs), are not known for their product knowledge. As their title says, it’s all about the relationships with them. In Asia, guanxi is the most essential thing an RM can have with a client. That’s the network and connections that create mutually beneficial business opportunities. From Investopedia: Guanxi is closely intertwined with the Confucian philosophy - a philosophy that has shaped many Asian cultures - that self is extended to family, friends, and society to create a harmonious community. Guanxi implies an obligation that one has to another. In China, it is stated that the wheels of business are lubricated with guanxi. To be fair, the Chinese coined the term, but the West expanded upon the idea. Through English Common Law, the West built a legal system that extended this trust to entire nations. That’s one of the reasons what we may call “bribery” is just “a gift to a friend” in the East. Interestingly, the distributed ledger technology upon which the blockchain is built extends trust without custodians. There need not be a middleman like a banker if the peer-to-peer networks work independently. It eliminates the age-old question, Quis custodiet ipsos custodes, or “Who watches the watchmen?” Eliminating some go-betweens would free up valuable resources regarding fees and time. After all, you probably don’t need an RM if you can articulate your wants to a client advisor. Or, if you’re expert enough, you can do much of this yourself. Not knowing more about your position, I can’t offer advice. (Well, I’m not allowed to provide advice anyway.) With all this in mind, let’s discuss five ways to protect yourself. Keeping Your Cash on Hand You’ll set off alarm bells at your bank if you withdraw $20,000. That’s for sure. But you certainly want to keep a certain amount you feel comfortable with in your safe. And put that safe underground. (The first place thieves will look is behind a painting.) You don’t need to go all John Wick, but my parents had a cool safe in our old house. It was small, but they put it under the rug in their closet. If there’s a master thief in the world that would look there, kudos to him. I wouldn’t. Besides the cool factor, you’ll know your notes are as safe as possible. Keeping Your Cash in Multiple Banks The average high-net-worth individual in Asia has at least five bankers. On average, one banker gets half his “wallet.” “Wallet share” is bankerspeak for how much of a client’s assets they manage. The bankers never know for sure, but they can guess. The next four bankers will get a piece of the rest. So, it’s essential to be a good banker. What does this mean for you? First, retail and mass affluent clients often think one bank is enough… and the banks count on it. When I teach retail banking during the graduate season, I teach that retail deposits are “sticky.” That means ordinary folk pick one bank and put all their money in it. This isn’t an issue since the average American has about $500 to their name. But if you’ve got a chunk of cash, you should spread it between 3 to 5 institutions. I know opening bank accounts isn’t as easy as it used to be, but it’s certainly something you should invest time in. That way, you can keep up to $250,000 in each bank, and all those deposits will be insured. But even if you only stick $10,000 in each bank, you’re much better diversified. Keeping Your Gold and Silver in a Safe Place I could be wrong, but I don’t see why anyone would keep their gold and silver in a bank. Maybe a safe deposit shop that’s separate from a bank. But I wouldn’t even do that. My good friend Michael once mentioned he has enough gold, silver, and ammo to defend his keep until the end of his days. I’d keep my gold and silver in a super safe under the floorboards in my house and never mention it to anyone. Or dig a hole in your backyard. Just don’t forget where you dug it! If Biden or his successors outlaw privately owned gold and silver in the coming years, and your stash is in a bank, it’s game over - at whatever price they decide. Investing in Crypto We’ve talked about this a lot. Owning crypto is an intelligent bet, even if it’s just 2% of your portfolio. You can’t lose your house but can participate in the upside. And that currency is practically untouchable. Especially if you plan to live abroad, just keep the crypto in cold storage. “Cold storage” is cryptospeak for a device that resembles an old USB stick where your crypto can be kept off-exchange. Just always remember your password and key - and never lose it! You don’t want to wind up like this guy: Credit: [CNBC]( Wrapping Your Assets in a Company This is too little spoken about. If you own a company and structure it correctly with the help of your lawyer and accountant, you can use it to shield your assets. Remember, you control your company, but the company owns your assets. It’s one of the best ways to protect yourself from lawsuits. It also keeps away unwanted bankers who’ll try to manage your wealth. I’ve long written in this newsletter that you ought to start an internet business that grooves with your passions. Once it starts to make money, leave the money in there until you need it. You can use the company as a savings vehicle. If you build it big enough, you can sell it for a chunk and move to Switzerland, whose private bankers understand the meaning of “discretion.” I hope that helps. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Greg Guenthner] [Greg Guenthner, CMT,]( is chief strategist at Forge Research Group. He has spent the better part of the past two decades developing long-term and short-term strategies with a single goal in mind: to help everyday investors generate outstanding returns and control their financial futures. Greg’s charts, analysis, and insights have appeared in Marketwatch, Forbes, Yahoo Finance, and many other financial publications. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](