Answering Our Worst Criticism

Friday, 18 September 2020
Melbourne, Australia
By James Woodburn
 

We recently sent out a survey to find out what you think of us and how we can do better.

I’m pleased to report the feedback was extremely humbling. We had some lovely comments.

But I don’t want to talk about the praise today (where’s the fun in that?).

No, I want to address the criticism. The harsh criticism. I’ve distilled the basic common themes into three complaints. And I’ll briefly unpack and answer each one.

Then, I thought I’d share a fascinating conversation I had yesterday with the creator of the algorithm behind Fat Tail Media’s trading system.

If you’re an Algo Trend Trader subscriber you would have already had access to this video yesterday, so don’t worry, I’m not giving anything away that you haven’t seen.

But first…

Answering our worst criticisms…

Here we go…

Leave the politics and world views out of the advice given by your experts! I subscribe to these for the valuable info you have on impacts and insights into investments. What the hell do political views have to do with the market?

This one seems to be popping up recently. Mainly from a few readers of the daily e-letter Rum Rebellion and a couple of Jim Rickards’.

So, let’s set the record straight. I appreciate politics is polarising — especially now. And our remit is the investment markets.

But the investment markets are made up of hundreds of millions of people all making hundreds of millions of individual decisions every single day.

What happens when those people are told they cannot do business?

As Greg pointed out in a ‘flag in the sand’ issue of Rum Rebellion last month, without basic rights and freedoms, there will be no excess wealth to invest.

So that’s where having domestic and global politics in mind comes from. But I must also say, it’s really limited to those publications where that is part of its mission statement.

The vast majority of our services do indeed keep politics out of it. Money doesn’t care about left or right. It just tends to go where it can grow. But of course, it can get misdirected too by policymakers. That’s where we believe it is right to point out the obvious mistakes and dangers.

The free daily e-letters have more scope to do than the paid letters, which are much more investment-focused. The dailies, especially Rum, explore consequences of decisions made in Canberra and the States.

By the way, if you didn’t catch Greg’s Rum Rebellion issue I referred to, read it here. I believe he justifies himself well. Let me know if you disagree.

As for Jim…I can see how some may think he ‘cheerleads’ Trump and the Republicans. But he actually doesn’t. There’s no one I’ve ever met who understands geopolitics like Jim. Perhaps it’s his background. He’s worked in the inside of Wall Street hedge funds and the CIA. He understands the way the world works from a deeply intricate level in terms of the way the elites jostle for power. He understands how countries bargain and posture each other.

And he says it how he sees it — unlike mainstream media. In many ways Trump and Jim are similar in that way. They are both genuine outsiders.

Here’s a fact. Did you know, for example, that Trump has signed four peace deals around the world? You don’t really hear about that. He’s also the first president not to start a war in their first term since Jimmy Carter. Now I don’t care for Trump any more than I care for Biden, I’m just pointing that out. Most mainstream media outlets wouldn’t point that out. Jim is laser focused on this kind of hypocrisy and doesn’t mind calling it out.

Jim’s remit is macroeconomics and the jostling for global power and how that affects markets. And there’s no bigger event that could affect that than the outcome of the US election. So, he’s our man covering it.

But if you don’t agree with Jim, that’s fine. One thing he’s always willing to do is rationally discuss his ideas. Send me some questions for him at letters@portphillipinsider.com.au. I’ll put them to him in a video and publish our conversation here.

Give more sober and substantial analysis. Tell less folksy stories and be concise and accurate.

Fair point, I guess. We do tell stories. We do frame our views and ideas in the context of history. We may also be guilty of over-explaining sometimes.

But I’d rather our editors over-explain than under-explain. Especially when it comes to the riskier stock recommendations.

We can’t in good conscience just put out stock recommendations without giving you the full picture, the research and the due diligence that goes into every pick. That’s the work you expect us to do and we take that responsibility seriously.

As far as stories go though, we could stop doing that across the board and just give facts and figures. I guarantee we’d get more complaints — and less happy readers — doing that.

Dial back the far-right content!

I was genuinely surprised by this one.

I read every single thing we put out there. None of it is far right. Extremists and ideologues on either side of the spectrum don’t care for your personal freedom as much as each other. Although it is strange how it seems socially acceptable to be on the far left. 

Both are dangerous and should be called out.

Bill Bonner, our founder, put it best when commenting on the states of things in the US right now:

But while “progress” is mostly an illusion, we don’t deny that things change. Underway, since at least the beginning of the 21st century, is a profound change. The US economy — grown rich and powerful on fossil fuels, the internal combustion engine, and the principles of free trade, free enterprise, and free movement — is metamorphosing into something new…perhaps beautiful, perhaps hideous.

The political change is well documented. Republicans — traditionally the party of small government and balanced budgets — have become the party of Trump. Mr Trump is opposed to free trade. Nor does he have any apparent interest in balanced budgets or any worries about debt. And he is prepared to manage the US economy with varying degrees of central planning and price controls, as he feels the situation calls for.

Still, many readers — perhaps correctly — believe that the alternative would be worse. Deprived of the hypocrisy of the Republicans, we would be at the mercy of the Democrats, who have never pretended any love for balanced budgets, sound money, small government, or free enterprise.

As to which would be the better captain for this Titanic, we have no opinion. Both parties are trying to prove that the other is incompetent, devilish, and imbecilic. As near as we can see, they are both right.

Indeed.

Although it may seem like we support one side over the other because we point out the flawed logic of decisions being made on our behalf…

I can assure you it doesn’t matter from what side of politics those decisions are made from…we hold each to just the same scrutiny.

For example, the view that by creating money out of nothing will fix the economy and get us out of recession. It’s for this reason many of our editors believe in the soundness of gold as money, and increasingly in other new forms of decentralised money…crypto.

The latter is on the up, by the way. I hope to bring you more on the emerging new bull cycle in bitcoin and crypto towards the end of the year. But the opportunity for the former, gold, is right now.

Bill’s been saying that for years. So has our gold expert, Shae Russell. In fact, we’ve just reopened the briefing she and I presented earlier last month, this time with a foreword note from Jim Rickards. Check it out here.

But talking of gold…

A fascinating discussion with former Morgan Stanley wealth manager and quant

Are you familiar with VAP charts? 

VAP stands for volume at price.

This is a concept I discussed with Tom Meyer in a call yesterday. Tom’s an algorithmic trader and investor.

For years he was wealth manager at Morgan Stanley. Then in the early 2000s he got his first taste of high frequency trading using fully automated system-based algos. Then he began designing those systems. He’s never looked back since.

As I said at the start, Tom’s the creator of our algo-based service Algo Trend Trader.

We catch up most weeks and record the conversations for the benefit of our members. Yesterday’s chat was particularly interesting as Tom analysed the gold market.

As it’s already gone out to Algo Trend Trader members, I figured it’s OK to share our discussion with you.

As we chatted, I actually thought to myself I should have invited our gold expert Shae on the call, too. I’ll do that next time.

Tom explained to me the significance of volume at price in relation to the gold market.

He pulled up a cool chart to show his point, and I think you’ll like what you see. 

Here’s a snippet: 


Port Phillip Publishing

Source: StockCharts.com

[Click to open in a new window]

The chart shows that the most volume occurred in the US$1,925­–1,975 range. It also shows where gold seems to have based itself, for now at least.

I love talking to Tom about these things…I always learn something new.

I hope you do too.

Check out our conversation by clicking here, or on the screenshot below…

Have a great weekend.

Cheers,
Woody