January 2019

​INSIDE THIS ISSUE
· The Mail Bag
· The Whether Report
· It’s Your Money
· Know When to Panic!
· Fun With Finance
​
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The Mail Bag

D.C. in Chicago writes: "I got into stocks back around 2010 and have held on ever since. Now I'm getting nervous. What should I do?"

Gordon replies:  Compare chart candlesticks on the weekly and monthly DOW, S&P 500 and other indices, and look for bullish, consolidating or reversal patterns that indicate likely continuation to the upside, a sideways market, or a likely drop.

This is called technical analysis and it’s easy. Register and join as a student and we'll teach you how.

Bottom line: when in doubt, get out. If you exit prematurely, you can always get back in again. Your only costs will be the commissions you pay to exit and then re-enter your positions.

Most investors have no exit strategy in place whatsoever. Professional traders and investors know you never go in the entrance until you know where the exit is.

Keep in mind that there are only two possible exits:

#1. Win = make money, retain and protect profits
#2. Loss = lose money, deplete life savings

Every investment you ever make eventually will pass thorough one of these exits. Which exit is up to you.

KEY POINT #1: Things that deviate far from average always revert to the mean, which is what markets always attempt to do.

KEY POINT #2: This is why educated investors use the equity trailing stop which takes about 5 minutes each weekend to calculate and lets you know exactly when to get to safety and lock in profits.

KEY POINT #3: Our proprietary Stock Market Early Warning System (available to WSU students only) incorporates this technology and lets us know exactly when to exit the market, and when to get back in again.

Moral to the story: Never become complacent in a long term rising (bull) market. Even the biggest and strongest bulls get tired one day. And bears are waiting.

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The Whether Report

The Dow Jones Industrial Average (DJIA) hit its all time high of 26,828 on October 3, 2018, about 3-1/2 months ago.

Since then it’s hit a low of 21,792, for a draw down of 18.8%. Crashes are said to begin when the market drops 20% opr more. So we missed this one by a squeaker.

Still, almost a drop of almost 19% is pretty steep for investors who have become accustomed to a nice, steady climb during one of the longest bull markets on record.

So here is my question. How many investors had a plan in place, in advance, to get out of the market and protect their gains and their equity, before a drop like this? My guess? Not many.

If this episode left you staring into the investing abyss, it might be a good time to rethink your strategy on risk management. Because the next stock market crop could be the big one that nobody wants to think about.
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It’s Your Money

Precious Metals
· Metallic money
· Made in exploding stars
· Properties:
- Ductile
- Malleable
- Inert
- Divisible
- Eternal
· Source here
· Metals Price
- Gold $ 1,274
- Silver $ 15.40
- Platinum $ 803

Federal Reserve Notes
· Meretricious money
· Made in Congress
· Properties:
- Debt coupons
- Flammable
- Vanishing
· Not federal, no reserves, fails the definition of note (no expiration)
· Purchasing power lost since inception: ~ 96%
· Current rate of inflation (destruction)
- Government: 2.18% fudged
- ShadowStats: ~ 6% real

Cryptocurrencies
· Mathematical money
· Prices here
- Bitcoin $ 3,688
- Ethereum $ 125
· Market Cap $124,335,544,255

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Know When to Panic!
Popular Fear & Warning Indices

CNN Fear & Greed Index (1-100)
· Online here
· Date Index Mood
Sat 01/19 51 Neutral

Crypto Fear & Greed Index
· Online here
· Date Index Mood
Sat 01/19 31 Fear

WSU Cultural Climate Watch
Economic Political Military
Fearful Angry Itching

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Fun With Finance

Music To Invest By
· Market: I'm Falling For You - The Four Tops
· Gordon: Hang On To What You Got - The Four Seasons
· Congress: Still Crazy After All These Years - Simon & Garfunkel

People Are Saying
· Wall Street: "Jump!"
· Hillary: "Remember me?"
· Robber: "Your money or your life."
· Divorce court: "Your money or your wife."
· Financial Planner: "Thanks for the memories."
· IRS: "Used to be yours. Mine now."
· Uncle Sam: "Brother, can you spare a dime?"
· Social Security: "Free money from the guy next door."