This is not something you can ignore
Thursday, 16 November 2017
By Bernd Struben
- Could this be the next bitcoin?
- An important reminder
Let’s face it.
It’s impossible today to invest in the stock market without at least making some use of computers.
Even if you’re a long-term buy-and-hold investor, you won’t be digging up hardcopies of a company’s annual reports.
And you won’t be comparing those to printed annual reports of its competitors before deciding which stock to invest in. Not to mention news stories related to the company’s operations and management. Fancy a trip to the municipal library to pore through the archives?
Right. Me neither.
Instead your first stop is likely the company’s website. Second stop may be the ASX website. And inevitably you’ll find yourself on Google to see what else the treasure trove of the web may reveal about the stock.
This is just the most basic research a long-term investor should carry out before buying a single share.
But what if you’re trading stocks? Perhaps buying and selling every few weeks. Even with the aid of the internet, you can’t possibly analyse the roughly 2,400 stocks on the ASX to uncover the most promising ones.
That’s one of the reasons we’ve seen the dramatic rise of algorithmic trading.
According to JPMorgan, only a few years ago algorithmic trades made up just 30% of the entire market. Today it accounts for 90% of the market. And the last 10% of holdouts look to be disappearing fast.
As Business Insider reports, ‘Bank of America Merrill Lynch has signed on with a quant firm — and it shows where Wall Street is headed’.
‘Manoj Narang, founder of quant hedge fund MANA Partners, has launched a trading subsidiary that is developing market-testing products. One of his first clients: Bank of America Merrill Lynch…
‘The firm is developing a range of products. One is a simulating tool that allows financial firms to run their algorithmic trading strategies through previous market conditions…
‘“Quantitative trading whether, it’s statistical arbitrage or high frequency trading, is becoming more and more about technology,” Narang said.’
If you’re at all serious about making money trading stocks, this is not something you can ignore. A Google search and digital copies of a few annual reports simply can’t compete with a top algorithmic trading system.
Not even if you devoted your entire day to research. And gave up sleeping.
That’s why we were so thrilled when quant trading guru Jason McIntosh joined the Port Phillip Publishing team back in November 2014.
Jason, as you may know, runs our premium advisory service, Quant Trader. He devised the system’s algorithms himself, based on his own decades of real-life trading experience.
Quant Trader analyses almost every single stock on the ASX…every day…so you don’t have to. It tells you when to buy, and when to sell. And it’s done so with remarkable success over the past three years.
Go ahead. See for yourself. Get the full story on Quant Trader here.
And now to the markets.
Overnight, the Dow Jones Industrial Average closed down 138.19 points, or 0.59%.
The S&P 500 lost 14.25 points, or 0.55%.
In Europe, the Euro Stoxx 50 index finished down 10.66 points, or 0.30%. Meanwhile, the FTSE 100 fell 0.56%, and Germany’s DAX lost 57.11 points, or 0.44%.
In Asian markets, Japan’s Nikkei 225 index is up 182.99 points, or 0.83%. And China’s CSI 300 is up 0.29%.
In Australia, the S&P/ASX 200 is up 11.96 points, or 0.20%.
On the commodities markets, West Texas Intermediate crude oil is US$55.30 per barrel. Brent crude is US$61.87 per barrel.
Gold is trading for US$1,278.85 (AU$1,685.14) per troy ounce. Silver is US$16.99 (AU$22.39) per troy ounce.
One bitcoin is worth US$7,247.40.
The Aussie dollar is worth 75.89 US cents.
Could this be the next bitcoin?
I have two prominent notes marking 22 November on my calendar.
The first comes complete with a smiley face, reminding me that it’s my daughter’s fourth birthday. (Time flies!)
The second simply says ‘ICO’…which, as you may know, stands for initial coin offering. Though perhaps it should be marked with ‘$$$’ instead.
You can think of an initial coin offering as similar to an initial public offering (IPO) for a company. It presents the first time the public is able to buy into the asset.
But 22 November isn’t really the ICO date. In fact, it marks the day where crypto expert Sam Volkering tells us you can gain special access to a brand new digital currency weeks before it hits the public market.
And Sam believes the potential gains on offer for early investors are in the thousands of percent.
Not that you should bet the farm on any ICO…or even your prize milk cow. ICOs are notoriously risky. Risky enough to see the Dutch financial regulator label the ICO market as a ‘dangerous cocktail’ earlier this week.
‘The Netherlands Authority for Financial Markets (AFM) – the country’s equivalent to the U.S. Securities and Exchange Commission – published a statement today outlining the risks it sees in the market for new cryptocurrencies, including those issued through the blockchain funding model.
‘Merel van Vroonhoven, chairman of the AFM, said in a statement:
‘“Although the AFM sees the possibilities of blockchain technology for financial services, it points to the high risks of ICOs in the current hype. The high risk of scams and loss of intake combined with the hype around ICOs at the moment is a dangerous cocktail.”
‘The regulator went on to enumerate a number of possible concerns for investors, including a lack of transparency into some ICO organizers.’
The Dutch — perhaps still stinging from the whole Tulip mania thing — tend to err on the conservative side.
But van Vroonhoven has a point. There is no shortage of scams with ICOs, and transparency is often lacking.
That’s why you should never invest more in an ICO than you’re willing to lose. After all, even a small investment could see you reaping tremendous returns if things go according to plan.
Even more importantly, you should never invest in an ICO you don’t understand. And if you’re like me, you probably won’t fully understand any of them.
Enter Sam Volkering and his new premium service, Crypto Tech Investor.
There’s no guarantee that every ICO Sam recommends in his new service will rocket out the gates. In fact, some almost certainly won’t.
But Sam’s understanding of the crypto market, and what drives the potential value of yet-to-be-launched digital currencies, is unmatched. Which is why I pencilled in ‘ICO’ next to the smiley face for my daughter’s birthday on 22 November.
If he’s right about this upcoming opportunity, it could be one for the record books.
But don’t take my word for it. Sam explains it all far better than I can right here.
An important reminder
Yesterday I told you about our upcoming microcap trading summit, ‘100 to 1 in the Stock Market’.
The three-part video training series is brought to you courtesy of our microcap specialists, Sam Volkering and Kris Sayce. And it’s entirely free to our paid subscribers…like you.
Trading these tiny stocks is undoubtedly among the most exciting — and risky — kind of investing you can do.
Many of these tiny, speculative stocks go down before they go up. Some never go back up at all. While others can gain 10-, 20-, and even 30-times in value in a matter of months.
That’s no exaggeration.
Sam has already used his unique trading strategy to make some of his readers at Microcap Trader gains of 1,160% and 2,000% on two single trades.
Now have a look at the intraday trading chart below (as at 2:00pm).
Click to enlarge
As you can see, big gains in these tiny stocks happen every day. The top two are up 120% and 100% respectively since this morning alone.
Not that all the tiny stocks gained today. Far from it.
Not even Sam manages to steer clear of every losing microcap. But he can show you how to greatly improve your odds.
The microcap trading training series kicks off this Sunday at 2:00pm AEDT. If you’re busy at that time, don’t worry. We’ll archive the video so you can watch it later. But you’ll only be able to access it…and the other two parts…if you sign up here to reserve your place.
One final note: Microcap Trader is one of our most sought-after and exclusive advisory services.
We have to make it exclusive — capped at 500 paying subscribers — simply because the stocks here have such tiny market caps. So tiny, in fact, that if we opened the service to more subscribers, it could have a distortionary impact on these companies’ share prices.
A few spaces in Microcap Trader have recently become available. Attendees of the ‘100 to 1 in the Stock Market’ training series will be given priority to claim those spaces. I don’t expect any will be opened up to our wider subscriber base.