What if you knew where the ‘smart money’ was going?
Friday, 6 April 2018
Auckland, New Zealand
By Kris Sayce
- Follow a certain kind of money
Today, your editor writes from Auckland, New Zealand.
We’re here to further the process of launching a local financial publishing company.
The inboxes of New Zealanders will never be the same again!
If you know of anyone in these neck of the woods who you think may have an interest in establishing the editorial team here, tell them to check out this link.
Otherwise, on with the show…
Overnight, the Dow Jones Industrial Average gained 240.92 points, or 0.99%.
The S&P 500 closed up 18.15 points, or 0.69%.
In Europe, the Euro Stoxx 50 index ended the day up 89.6 points, or 2.68%. Meanwhile, the FTSE 100 rose 2.35%, and Germany’s DAX index gained 2.9%.
In Asian markets, Japan’s Nikkei 225 is down 21.74 points, or 0.1%. China’s CSI 300 is down 0.2%.
In Australia, the S&P/ASX 200 is up 0.11 points, for no meaningful percentage gain.
On the commodities markets, West Texas Intermediate crude oil is US$63.05 per barrel. Brent crude is US$67.86 per barrel.
Gold is trading for US$1,327.83 (AU$1,730.15) per troy ounce. Silver is US$16.34 (AU$21.30) per troy ounce.
The Aussie dollar is worth US$76.76 cents.
Bitcoin is US$6,798.43.
Follow a certain kind of money
This week we’ve introduced you to our newest premium trading service – Billion Dollar Breakout Trader.
At the helm is entrepreneur and ace trader himself, Ryan Dinse.
Your editor is biased. But we believe we have a bunch of smart people on our payroll. Most of them are folks you never hear from, whose jobs go largely unsung. Yet without them, it would be a whole lot harder for us to get the valuable advice we provide into your inbox.
But of all the folks on our staff, it’s hard to think of anyone who has had a bigger impact in such a short timeframe.
We originally hired Ryan as a support analyst for the Crash Market Investor service, launched last year. No prizes for guessing what that service is all about.
But it didn’t take long to realise that we would be wasting his talent if he stayed in a ‘support analyst’ role. He had enough compelling ideas about how to help folks earn a ‘bob or two’ from the markets, that we granted him permission to launch his own entry-level and premium services.
Not just one, mind you, but three.
Ryan’s latest venture, Billion Dollar Breakout Trader, is his attempt to show investors how they could profit from stocks as they move from tiny stocks to less tiny stocks to small stocks to less small stocks…and eventually to big stocks.
The service is based around a proprietary signal Ryan has developed, which he says gives him the best chance of recognising those valuation leaps as early as possible. Ideally well in advance of them becoming a billion-dollar stock.
Naturally, not every signal generated by Ryan’s system will result in a gain. Some will end up doing nothing at all, or even falling.
But Ryan believes the signal-based system he has developed is strong enough to generate a high probability of success. Time will tell.
Because this is a signal-based service, it’s not what we call a ‘story’ service. That means, each trade alert isn’t preceded by a 3,000-word story about the Second World War or the fall of the Roman Empire…when all you really want is advice to buy or sell.
We put Ryan’s Billion Dollar Breakout Trader service in a similar category to two of our other popular alerts service: Quant Trader and Time Trader.
In fact, if this were the Amazon.com website, we’d say, ‘If you like those services, you may also like this’. That may be a bit of a hammy way to put it, but that’s pretty much how we see it.
How does it all work? Ryan puts it like this:
‘There is a certain point in a certain company’s lifecycle.
‘It doesn’t happen to every company. Maybe 2–5% of all companies that list on an exchange.
‘But if a company hits this point…if a stock “crosses over”…it goes from being a small company…to being a much, much, much bigger company.
‘This point is determined by smart money.
‘And it can often be narrowed down to a single day in a company’s stock price history.
‘I call this point the “Silent Crossover”.’
You’ve probably heard the term ‘smart money’ before. It refers to the big institutions that have big chunks of money to invest in the market.
The idea is that when the ‘smart money’ finds an investment it likes, it buys in a big way. Think about it. A big managed fund or institutional investor isn’t going to put a few grand into a stock. It isn’t even going to just put a few hundred grand into a stock.
If it’s a real ‘smart money’ investor, it will likely have to invest multimillions. Why? Because if the ‘smart money’ investor has hundreds of millions of dollars under management, anything less than a few million isn’t a meaningful investment.
You get the point?
If you buy a stock you like because you’ve done a lot of research, and as smart as you may be, no-one else is going to care. No-one is going to buy into the stock just because you bought it.
But if a big ‘smart money’ investor buys, not only can that buying action cause the share price to rise, but the subsequent news of the ‘smart money’ buying the stock can also be good news for the stock.
That’s why following, or better still, anticipating the moves of ‘smart money’ has the potential to be so lucrative.
That’s the basis of Ryan’s exciting new service: Billion Dollar Breakout Trader. If the idea of getting in on ‘smart money’ plays appeals, we suggest you check it out. Details here.
We admit to being no fan of Tesla Inc [NASAQ:TSLA]. The trendy US electric car company.
We’re even less of a fan of its PR activities and odd benchmarks of success. For example, we couldn’t help but be amused by a line from the company’s latest 8-K filing. (Note: An 8-K report is required by US listed companies to inform the market of key updates or developments. The closest equivalent in Australia would be the ASX’s ‘continuous disclosure’ requirement).
Tesla informed investors as follows:
‘The Model 3 output increased exponentially, representing a fourfold increase over last quarter. This is the fastest growth of any automotive company in the modern era. If this rate of growth continues, it will exceed even that of Ford and the Model T.’
We’re familiar with the concept of exponential growth. It’s when something grows quickly from a low base…which is rather the point, and we’re not actually sure that’s something of which Tesla should be proud.
Because it highlights the problem the company has had with ramping up production. And of course, is that really the best it can come up with? A comparison to production levels of the Model T.
Anyway, we’re biased. We’ve got it in for Tesla. So don’t expect any balanced reporting or objective commentary to come from your editor’s keyboard.
While we have no doubt that there are always buying opportunities in the stock market, we’re always on the lookout for warning signs.
The latest of which arrives via the Financial Times:
‘Jamie Dimon, head of JPMorgan Chase, has warned that the US economy is at risk of overheating, raising the prospect that the Federal Reserve may soon need to slam on the brakes to prevent wages and prices from rising too quickly.
‘Mr Dimon wrote in his annual letter to shareholders that while “modest” moves by central banks around the world to end crisis-era economic stimulus programmes have gone smoothly, policymakers were in uncharted waters and the Fed could be forced to take “drastic action” if inflation increased more quickly.
‘“Many people underestimate the possibility of higher inflation and wages, which means they might be underestimating the chance that the Federal Reserve may have to raise rates faster than we all think,” he wrote.’
We remain both alert, and alarmed.