11-24-08

What Goes Up Must Come Down... And You Can Cash in on Both Directions

    This year's turkey might be a little leaner than usual, but to some, it's even fatter...

    Something that's hard for many to get their heads around is the fact that the stock market isn't the only thing to make money on. Secondly, most people seem to be locked into the premise that you can only make money if things go one way: UP.

    Believe it or not, this is the view of the majority of plain-vanilla 401ks and index-linked mutual funds that people pay into. Well, why not? After all, a financial 'expert' told them to they must be right... right?

    Clearly, they were wrong; the majority of funds are down 46% this year!

    In other words, you've been lied to. BUT, let's look at ways to defend against further damage and even make up the losses. It's about re-educating yourself a little.

    But people lead busy lives don't they? How on Earth can the average person be expected to hold down a job AND be their own financial expert?

    Well, my answer to that common complaint is: "It's way simpler than you think. The alternative is suffering the consequences of ignorance- like now!"

    More to the point, if you learn a new craft or two in this line, the day-job that's taking up all this time will soon seem like a nonsense...

    While most people are sobbing, a quiet minority are cashing in or just carrying on regardless. Sure, they'll have watched the stock market collapse, but a) it wouldn't have been much of a surprise and b) they'll have even made money from the fact or it won't have affected their own trading.

    An example of this are currency traders. Of course, currencies will always fluctuate against each other so there's always money to be made.

    Now, currency trading may sound complicated to you, but everyday folk are making a tidy living from a course like Insider Code, the most popular currency trading system in the world today.

     I want you to start appreciating that there are ways to make money when things go DOWN too. Right now, many are taking fat profits from the price of oil plummeting from $150 a barrel to $50 a barrel- an event we predicted right here at The League of Power. Likewise, this price will rebound back up again (we'll let you know when we see this happening also).

     You can make money from almost anything using something called 'Options'. These people who'll be celebrating on Friday (instead of weeping) never actually owned barrels of oil to sell in the first place. They reserved an option to sell oil. In simple terms, they 'bet' that the price would drop. But this isn't gambling of course- the difference here is that the 'bet' is based on having a strong hunch on which number the roulette ball lands on.

    I'd like to give you an example of an options play now that can consider using, and at the same time, let you in on one of the biggest government secrets going today... 

Why Gold is the 'Whistle-Blower' on Government Lies

    As I've been repeatedly reporting, right now, the government is printing money at a rate never seen before in history. You just have to take your balance sheet losses on the chin, but the government just prints more money to make up for it.

    As you know, trillions of dollars of wealth has simply vanished. Poof! So, the Federal Reserve is printing more to patch up this hole.

    Okay, fine. But economics isn't that simple...

    What this does is devalues the currency. Recently, the government simply stopped reporting the tell-tale statistic called 'M-3' that showed the world just how much paper money they were printing.

    Ah, but they can't hide the price of gold...

    Gold rises, Dollar value drops and vice versa. Gold was written into the Constitution as the only currency to be used. Until 1971, Dollars were backed by gold (The Gold Standard).

    Since 1971, governments have been able to lie, effectively, and print their way out of whatever disaster their incompetence brought about, but the price of gold always reflected this.

    Right now, gold is desperately trying to rise in response to this legalized counterfeiting effort, BUT something very suspicious is going on...

    At night, gold price is rising. Then, the market opens and it drops again. Now, you can argue a thousand different ways about why or who is doing this (who would have the most to gain by keeping the price of gold down currently...?) but the point is this is a fact. Watch this happen and see for yourself.

    Then, imagine making money by joining in with the conspirators: you could 'sell' the option on gold at the open each day. Like they say, 'don't fight the Fed'.

    However, this little exercise can only continue for a while. History has shown that not even government intervention can control the forces of a free economy. My point: look at a wider picture and start realizing you can make money on both UP and DOWN cycles.

    And it doesn't even have to be restricted to markets...

How to 'Sell' the Property Option

    You can make money by falling property prices too and NO, I'm NOT talking about buying a foreclosure and flipping it! There's a way you can 'flip' a property without buying it in the first place, thus virtually eliminating risk. It's kind of like selling the option for property much like how I explained selling the price of oil earlier.

Full details at: http://www.leagueofpower.com/hotwire    

The Big Question

    Like kids sitting in the backseat of a car on a long journey, a monotonous question keeps being heard: "Are we there yet?" I'm talking about 'the bottom', the end of the nightmare.

    Bottom-fishing is pretty near impossible BUT we can learn from history. Obviously, this stock market is a bear market. Bear markets never just fall relentlessly, in fact, they often give spectacular rallies.

    Here's why I sense one such rally approaching...

    A great number of hedge funds will policies redeemed at year end as their clients scramble for the safety of cash. This is what's behind some of the vicious selling currently. Meanwhile, a lot of cash is sitting on the sidelines as a result. Money that will have to be put to work.

    Now, this is no secret and traders will sense this reality soon enough. They will exacerbate such a rise.

    Add in to the mix that the Dow is now severely oversold and we have all the ingredients for a brief but possibly sharp rally in the first quarter of 2009 or even sooner.

    But it WILL be brief. It's just the bear trying to attract more victims before the final spiral down to the REAL lows. The informed few will use this as a chance to dump all remaining equities. The people who want to play will make money from options both on the way UP and the long drop back DOWN too. Those who want to watch will sit on cash, Treasury bills and gold.

    "So are we there yet?"

    Nobody knows anything right now. Who owes who what?? How can anyone be sure until this credit crunch gets all its surprises out the way? This is why we're seeing otherwise excellent companies have their share prices destroyed.

    "SO are we there yet?"

    The 'floor' is Dow 7286. If the Dow closes below 7,286, then watch out. From a trusted technical point of view, it's headed south to a level even the pessimists will be surprised by. Dow 4000 out of the question? No, not at all.

    "OK. So you say they'll probably be a big surge upwards and then another crash. When are we at the bottom?"

    The bottom will come, ironically, when everyone stops asking where the bottom is. When this time comes, people will think you stupid to even be discussing stocks they'll be so put off them. This is the moment of 'capitulation'. The moment when the final 'bull' pulls his horns in.

    And then dear reader, if you're still interested, there will be the chance of a lifetime to multiply your wealth.

    Be prepared. Profit by it. Ignorance and denial is expensive as we now know.

Till Next Time...

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