Buy in an emerging market, sell in the established capital markets. On the surface, the formula for arbitrage success appears fairly straightforward. But all too often, the practical foundations of a value arbitrage exercise are seriously flawed: the very data upon which the buy-sell window is premised is either misleading or too broad to justify any credible conclusions.

Yes, value arbitrage is perhaps the most compelling investment profile in today’s complex and fast-changing international environment; but the underlying value drivers must be in place, and be independently verifiable in precise terms.

For instance, protagonists of emerging market investments have been touting India’s 10%-plus GDP growth and 250 million-plus middle class in order to encourage investments either in the Bombay Stock Exchange or in unlisted counters. However, a closer scrutiny of India’s GDP numbers urges extreme caution. Firstly, India’s GDP growth is composed of a highly uneven matrix of untested data and is, in fact, littered with examples of business sectors which are going nowhere in a hurry. Secondly, a fair proportion of the middle class is surviving on debt-less than 10 million households are reporting positive balance sheets today. Finally, according to latest reliable data, almost 800 million Indians live on less than a dollar a day!!

Value arbitrage strives to be a science, not an art. Therefore, there is need for a certain minimum level of exactness when creating a value arbitrage special situation.

Nobody disputes that third world investment strategies must incorporate exponential growth in shareholder value in the chosen business segment, if only to allow for impaired statistics. “But investors must go one step further when seeking above-average profits in the emerging markets, they must adopt a dual approach, identified by a thorough, independent analysis of the supposed facts presented by various government agencies on one hand and by a wide margin of error to compensate for the lack of historical integrity in statistical determinations,” a senior Geneva-based hedge fund manager explained yesterday. “Otherwise, all arbitrage is at risk, particularly when exit strategies are time-sensitive.”

Then there is the all-important demand for specificity, i.e. raw data which directly impacts the subject investment, both in the near term and over the longer term.

Not surprisingly, the current across-the-board turmoil in pricing, influenced by sub-prime debt and the volatility in oil prices, is leading an increasing number of shrewd asset managers to conclude that GDP is one big fallacy, an abstraction devoid of any link to the real world. How can a growth rate of 10% assist an investor who is only interested in profits and losses?

In the simplest of terms, GDP is computed by calculating the total market value of all goods and services generated in a given year, plus the value of exports, less the value of imports. At first glance, GDP appears to adequately mirror a national economy and, even today, the overwhelming majority of mutual fund and asset pool managers use GDP as an early-stage selecting tool while picking one developing economy over another.

However, the GDP framework fails to tell us what causes fluctuations in government spending, consumer activity, private investment or, in the case of countries like India, agricultural production which is dependent, in the final analysis, on the vagaries of the weather. Moreover, GDP which itself is subject to one or more revisions, does not enable a reasonable assessment of boom-bust cycles.

That said, industry-specific data is generally much more reliable for decision-making purposes. And interestingly, for arbitrage traders, countries with relatively low GDP growth can, at times, offer better industry-specific investment profiles than high-growth markets. It should not be forgotten that the value arbitrage prism is extremely technical in nature, and is conditioned not only by potential returns but also by the timing of those returns.

Continue reading this post…

So here is an important piece of stock trading advice. Do not chase sudden move stocks. Very important rule to remember. The idea is to buy stocks before movement. Stock prices go up because there are usually large amounts of people buying the stock. A slow, upward trending stock is different than a rapid uptick in price. Rapid upticks have a tendency to correct very quickly. Or to plummet very quickly. Always be suspect of rapid shifts in price.

Stock chasers tend to make a habit of it. They look for rapid movement and jump on the bandwagon. It’s a very bad habit to be in because what goes up quickly can fall quickly. Don’t buy late.

Typically late buying stock chasers are operating off greed. The greedy investor is setting themselves up for a major downfall.

My advice is to be patient and look at another stock. Never jump on the bandwagon. Never purchase on a rising stock price alone. Stick to a sober, patient stock investing plan.

One exception to consider is a rise in price based on major company news that catches the market off-guard. A good example is a highly profitable merger that comes out of nowhere. A few months ago I purchased stock when a sudden announcement that a construction and engineering giant was being purchased by another construction giant making them the largest player in their industry. Historically in business only the top two or three players in a field survive. The small firms go under or are acquired. So a merge creating the market leader is normally a great sign the stock price is going to have a profitable, healthy future.

Continue reading this post…

After Years Of Trading, I’m Really Cynical About Most Newsletters!

This is a review that comes from my personal experience with Marl “The Stock Trading Robot”.

The Doubling Stocks newsletter provides stock picks that are chosen by an extremely expensive, and very high tech automated trading system that sells for $28,000 dollars (US). No, that’s not a typo, $28,000! At that price and sophistication level, its definately a system for the “big kids”. There is however a way to play. For only $47 you can subscribe to the newsletter, and get the picks that were done by Marl in time to place a trade for the opening bell. Once you’ve subscribed, you get Marls picks in your email at regular intervals.

Over the past 15 years, I’ve worked with a lot of trading systems, both manual and automated. After having traded stocks on all the major exchanges as well as options and commodities, and holding several licenses within the financial services industry, I consider myself a pretty well informed guy. Over those years I have had some minor success with automated trading systems, but never anything that would allow me to take a trip to Tahiti, and not come back. When I found Doubling Stocks, my ego had to take a couple of steps backward. There is no way this can work, or so I thought.

Do Automated Trading Systems and Stock Bots Work?

Frankly, as a general rule, NO! The amount of data that has to be analyzed is extremely complex, and gets more complex every day. There are thousands of trading programs out there, from consumer level to professional. Most are indeed scams, and the ones that aren’t, the ones the pros use, are to expensive for the average trader the even consider.

These systems require an incredible amount of knowledge to program. Not just an absolute understanding of technical analysis, but also of advanced mathematics, statistics and statistical analysis and advanced programming skills. That’s why these guys make big bucks. They are geniuses in several areas.

More About Marl The Stock Trading Robot

So, when your a genius, and develop a program like Marl, where do you go from there. After all, guys like Carl and Michael, who had been with Goldman Sachs, don’t just site around on their hands. Marl was an incredibly successful project, and they wanted to move on to something else.

I found the Doubling Stocks newsletter when I was looking at some information on market analysis and ways to analyze more stocks faster. Being the cynic that I am, I dont usually trust information at first glance, so I did a lot of research and found that there are some who are critical of the concept of Marl, giving an advantage to the big trading firms. Well in my mind, that’s the kind of criticism that I don’t mind seeing. In my trading efforts, I really want an unfair advantage. But I certainly didnt want to spend $28,000 on this!

The Doubling Stocks newsletter allows subscribers to see the signals and picks generated by Marl, and share in the profit. It really is the way to go for those of us who are not working for a large Wall St. firm. These are some of the claims made by Carl and Michael about Marl:

* Average returns above 100%, often within first 3 hours of market opening

* Very high rate of success of picking winning stocks

* Marl can analyze 7 stock charts per second (I’m lucky if I can truly analyze 7 in a day)

* Marl can process 1,986,832 mathematical calculations per second

* Feedback loop allows Marl to constantly be perfecting its trading formula (all that means is that it learns, and improves)

* It means that Marl can be extremely selective

* One lifetime fee of only $47

* 8 week, 100% money back guarantee!

Learn More About Marl The Stock Picking Robot

With all of the positive news being reported about the Doubling Stocks newsletter, it was worth my time and money to check it out. And I had nothing to lose with the 8 week money back guarantee. That was definately enough time to evaluate the program. If it worked, I would be able to make back the $47 cost on my first trade. If not, I would get my money back. I Made My Money Back, And Then Some

After my first trade, I knew this was for real. I made my money back and then some on my first trade. I average 2 trades per week, and while Marl isn’t right 100% ( who is? )of the time, the upside profits are enough to keep a smile on my face, and a rapidly increasing amount of cash in my trading account.

I was thinking about making a video so people could watch the program in action, but then I noticed that they actually have one, that shows an actual trade and the profit created on the Doubling Stocks site.

I have nearly replaced my monthly income using the Doubling Stocks newsletter. I’ve spent years making other people money, now its my turn, and yours. The Doubling Stocks newsletter has given me the opportunity to do what I really love, trade stock successfully, and spend time with my family.

Its great to be skeptical, I was. But with nothing to lose, its definately worth a try. Option 1 is you make your money back on the first trade, like I did. Option 2 is you find that its not for you ( I kind of doubt this), and you have 8 weeks to try it out, and get a 100% money back guarantee. Thats plenty of time to make a decision with no risk!

Heres is what I recommend you try -

* Get the newsletter (its a one time, lifetime fee)

* Dont put any money into the first 4 or five trades, but watch them as if you had money in them.

* Once you see the potential, put a few hundred in one of Marls tips.

* Relax, pour a cup of coffee and enjoy the money!

Continue reading this post…

Concerned investors are, shall we say, paying close attention to 2008 scenarios and the domino effect the home mortgage mess may have on stocks, toppling real estate, gold and the economy in general.

Sweating bullets may be more like it. Many in-the-know investors are now sweating bullets about what 2008 holds.

And rightfully so. The order of magnitude of the housing-ignited financial crisis-and its potential to widen and deepen-is far greater than the typical TV news-watching man and woman in America ever suspects. If they suspect anything at all.

So what could happen? How bad could it get? Are we in for a mere shake? Or a severe shake and bake?

Or could it, as with countless “paper dangers” in the past, somehow pass us by?

Ever see one of those domino-toppling exhibitions? Someone pushes a domino over, just one mind you, and it leads to a fascinating chain reaction that eventually topples each and every domino in the complex design. Well, if we can get away with comparing our complicated economy to one of those neat designs, here’s one domino effect that (as plausible as it may turn out to be) we hope never happens.

The Trigger Domino

Could consumer spending be the trigger domino, the one that knocks all the others over? Yes, and for good reason. American consumer spending is the engine that drives the world economy. Our enthusiastic buying of cheap imports keeps China happy, and our tanking up with ridiculously high priced gas keeps Saudi sheiks in silk.

Which may, surprisingly enough, be a very good thing since both nations (plus other Gulf States), have nearly $3 trillion in cash reserves and are, needless to say, pretty disgruntled over the direction those dollars have been heading these last few years. Threats have even been made of the nuclear option, of China and the Middle East dumping their dollars in favor of the euro and a basket of other currencies.

So far, the great antidote for that nuclear option has been the American consumer-as long as Americans are eagerly spending, China and Saudi don’t seem particularly trigger-happy. They show little interest in burying the very people who are buying their stuff.

But if that spending grinds to a halt, all bets are off.

The Fed’s Hail Mary Pass

So…what is the 2008 outlook for the American consumer? Here’s the one-word answer: Housing. With housing in historic trouble, America’s home-based “ATMs” are effectively shut down. There will be no more borrowing against the formerly lofty appraised values of our homes, not when, in some areas in Florida for example, houses are already selling for half their 2005 values.

This is serious business. The president of Wells Fargo, John Stumpf, certainly didn’t mince any words: “We have not seen a nationwide decline in housing like this since the Great Depression.” Stumpf is by no means a lone voice in the wilderness. “I’ve never seen the market as bad as this. And it could get worse,” said veteran Wall Street analyst, Ivy Zelman. Similar dire quotes could fill up this article.

The Fed’s answer to this cataclysm in the making is arguably its answer for everything else these days: cut and print. Cut rates and print more dollars. The thinking here is that cut and print will lead to even weaker dollars, subsequently cheaper looking stocks to foreigners and-the Fed earnestly hopes-an eventual rising stock market. And that would include the average Joe’s and Jill’s 401ks.

Will this Hail Mary pass work? Will stocks go up and, even with housing crashing all around us, will we be encouraged enough to keep spending until the crisis is effectively over?

Question: Do most Hail Mary passes work?

The Dreaded Domino Effect

Okay, just so we cover the bases here, let’s look at, worst case, what could happen in 2008.

In the third quarter 2007, foreclosures rose to their highest level since the Mortgage Bankers Association began keeping records back in 1972. Just as ominously, homeowners behind in their payments rose to a 21-year high. That frightening trend continues well into 2008.

With so many people either losing their homes or working at second or third jobs at McDonald’s just to make their payments, buying the latest big screen HDTV not only isn’t a priority, it isn’t even a consideration. Neither is a new dining room set, fishing boat, next-generation computer or digital sound system. These are all discretionary purchases, luxuries hard-pressed folks can do without.

Consumer spending tanks.

The Fed keeps up with its cut and print strategy but, like drugs given to an addict, it seems to have less and less effect on the markets. Maybe that’s because a credit crunch is now going on-nobody’s borrowing and nobody’s lending-not to mention the fact that banks are in terrible shape. Some estimates put their coming sub-prime losses at up to half a trillion dollars. Some estimates put it even higher than that. It’s hard to throw a party for the latest rate cut when the house is burning down.

As hoped for by the Fed, with the dollar setting record lows virtually every week, foreign money is now moving into America’s “cheap” stocks. But it’s not happening fast enough and, burdened by negative consumer sentiment, the market isn’t rising high enough. People aren’t exactly thrilled over their meager 401ks.

Meanwhile, China and the Gulf States are now getting hit with a double whammy: their $2.7 trillion in cash reserves is losing value almost by the minute, thanks to the Fed’s excessive rate cutting, AND their revenue from American consumer spending is plummeting.

Frighteningly enough, the nuclear option is now back on the table.

What happens if China and Saudi play that option? That’s another story for another day. Suffice it to say, with a floundering economy and a decimated dollar, people are desperately searching for another means of savings and exchange. Something universally accepted by both sellers and buyers, that, unlike paper money, has never, ever been worth nothing, no matter what banks or governments throughout history have tried to do.

Gold.

By that time, an ounce of the shiny stuff could be worth well over $1,000. Maybe even over $2,000 or more. Who knows? What you should know, whether the domino’s topple like this admittedly dark scenario or there’s just the chance that this could happen to you, your family, your stocks or your home, is that gold still serves as both the ultimate money and the ultimate diversification… particularly if your portfolio only contains, well, paper.

Continue reading this post…

After Years Of Trading, I’m Really Cynical About Most Newsletters!

This is a review that comes from my personal experience with Marl “The Stock Trading Robot”.

The Doubling Stocks newsletter provides stock picks that are chosen by an extremely expensive, and very high tech automated trading system that sells for $28,000 dollars (US). No, that’s not a typo, $28,000! At that price and sophistication level, its definately a system for the “big kids”. There is however a way to play. For only $47 you can subscribe to the newsletter, and get the picks that were done by Marl in time to place a trade for the opening bell. Once you’ve subscribed, you get Marls picks in your email at regular intervals.

Over the past 15 years, I’ve worked with a lot of trading systems, both manual and automated. After having traded stocks on all the major exchanges as well as options and commodities, and holding several licenses within the financial services industry, I consider myself a pretty well informed guy. Over those years I have had some minor success with automated trading systems, but never anything that would allow me to take a trip to Tahiti, and not come back. When I found Doubling Stocks, my ego had to take a couple of steps backward. There is no way this can work, or so I thought.

Do Automated Trading Systems and Stock Bots Work?

Frankly, as a general rule, NO! The amount of data that has to be analyzed is extremely complex, and gets more complex every day. There are thousands of trading programs out there, from consumer level to professional. Most are indeed scams, and the ones that aren’t, the ones the pros use, are to expensive for the average trader the even consider.

These systems require an incredible amount of knowledge to program. Not just an absolute understanding of technical analysis, but also of advanced mathematics, statistics and statistical analysis and advanced programming skills. That’s why these guys make big bucks. They are geniuses in several areas.

More About Marl The Stock Trading Robot

So, when your a genius, and develop a program like Marl, where do you go from there. After all, guys like Carl and Michael, who had been with Goldman Sachs, don’t just site around on their hands. Marl was an incredibly successful project, and they wanted to move on to something else.

I found the Doubling Stocks newsletter when I was looking at some information on market analysis and ways to analyze more stocks faster. Being the cynic that I am, I dont usually trust information at first glance, so I did a lot of research and found that there are some who are critical of the concept of Marl, giving an advantage to the big trading firms. Well in my mind, that’s the kind of criticism that I don’t mind seeing. In my trading efforts, I really want an unfair advantage. But I certainly didnt want to spend $28,000 on this!

The Doubling Stocks newsletter allows subscribers to see the signals and picks generated by Marl, and share in the profit. It really is the way to go for those of us who are not working for a large Wall St. firm. These are some of the claims made by Carl and Michael about Marl:

* Average returns above 100%, often within first 3 hours of market opening

* Very high rate of success of picking winning stocks

* Marl can analyze 7 stock charts per second (I’m lucky if I can truly analyze 7 in a day)

* Marl can process 1,986,832 mathematical calculations per second

* Feedback loop allows Marl to constantly be perfecting its trading formula (all that means is that it learns, and improves)

* It means that Marl can be extremely selective

* One lifetime fee of only $47

* 8 week, 100% money back guarantee!

Learn More About Marl The Stock Picking Robot

With all of the positive news being reported about the Doubling Stocks newsletter, it was worth my time and money to check it out. And I had nothing to lose with the 8 week money back guarantee. That was definately enough time to evaluate the program. If it worked, I would be able to make back the $47 cost on my first trade. If not, I would get my money back. I Made My Money Back, And Then Some

After my first trade, I knew this was for real. I made my money back and then some on my first trade. I average 2 trades per week, and while Marl isn’t right 100% ( who is? )of the time, the upside profits are enough to keep a smile on my face, and a rapidly increasing amount of cash in my trading account.

I was thinking about making a video so people could watch the program in action, but then I noticed that they actually have one, that shows an actual trade and the profit created on the Doubling Stocks site.

I have nearly replaced my monthly income using the Doubling Stocks newsletter. I’ve spent years making other people money, now its my turn, and yours. The Doubling Stocks newsletter has given me the opportunity to do what I really love, trade stock successfully, and spend time with my family.

Its great to be skeptical, I was. But with nothing to lose, its definately worth a try. Option 1 is you make your money back on the first trade, like I did. Option 2 is you find that its not for you ( I kind of doubt this), and you have 8 weeks to try it out, and get a 100% money back guarantee. Thats plenty of time to make a decision with no risk!

Heres is what I recommend you try -

* Get the newsletter (its a one time, lifetime fee)

* Dont put any money into the first 4 or five trades, but watch them as if you had money in them.

* Once you see the potential, put a few hundred in one of Marls tips.

* Relax, pour a cup of coffee and enjoy the money!

Continue reading this post…