RF's Financial News

RF's Financial News

Sunday, July 28, 2013

This Week in Barrons - 7-28-2013

This Week in Barrons – 7-28-2013

“I’m mad as hell, and I’m NOT going to take this any more…” Networkthe Movie’

Sometimes I get the feeling that plain old common sense left the building 100 years ago.  Money is being silently stolen from us everyday – and we go through our lives like nothing ever happened.  When Bernie Madoff was convicted of stealing billions of dollars, most people yawned and said something to the effect: “So what, the rich can afford it".  Over the past few years:
-       We've seen Sentinel steal customer money – and the courts looked the other way.
-       We've seen J.P. Morgan manipulate the price of silver – and the SEC/COMEX looked the other way.
-       We’ve seen John Corzine co-mingle a few billion of his investor’s money (with his own), steal it – and the courts looked the other way. 

But this isn't a new situation.  We (as a people) have been robbed for years on end and just "take it" as if we deserve it.
-       When the Federal Reserve was criminally created and forced upon us – no one fought back.
-       When Roosevelt confiscated everyone's gold in the 30's – no one fought back.  In fact, when the NY Times ran the story it didn’t even make the front page.  The fact that the gold confiscation was timed at the exact moment that beer was legalized (prohibition was abolished) was probably just coincidental.
-       Recently in the late 90’s, our Government stole millions of acres in the Grand Canyons via the Desert Wilderness Protection Act.  The reason they gave was that the beauty of the desert had to be protected.  Probably the fact that the land also housed some of the richest gold veins in North America – estimated to hold between 2B and 25B ounces of gold – was probably just coincidental.
-       Have you noticed how so many of our oil and shale discoveries are on national lands?  This is not a coincidence.  This enables the U.S. to use these holdings as collateral against our fiat currency.
-       In Detroit, many people put in 30 years of government service – expecting to get the retirement that they were promised.  They were surprised that after spending money that they didn’t have, their savings were reduced to potentially just seeing 10 cents on every dollar.  Didn’t anyone ever ask the question: “How are we going to pay for all of these promises?”
-       And right now, 10,000 Baby Boomers a day are hitting retirement age. Most of them used Wall Street’s investment return thesis of 8% return per year.  But The Ben Bernanke had to step in and cut interest rates to 0% - effectively handing the banks all the money they could ever want, and robbing the elderly of their savings income.

We as good Americans went right along with all of these events – just as planned.

The moral to the story is that if you listen to 99% of the talking heads on TV (especially CNBC) they will tell you the economy's rebounding, and the future is bright.  They want you to feel good and go spend money.  But the economy isn't fixed, the global financial structure isn't sound, and things cannot continue the way they're going.  Something must change. 

My bet is still on a ‘global reset.’  Just about every country is tired of the US debasing its currency, and they're willing to move away from having to use it for global commerce.  China is leading the way, making deals with over 27 Countries to deal in their own home currency of the Yuan.  My guess is that when they feel they've amassed enough gold to back the Yuan on a percentage basis, they are going to push to have their currency be the new reserve currency, or at least be a major part of a new Global reserve made up of several currencies.  If I’m right, the reason for the gold price ‘smash’ falls into place.  They had to get more supply, and by beating the price down, all the hot money speculators sold. 

China is buying all the gold it can get.  And when they tell us how much they have, then they will WANT the price to rise.  But China will keep a lid on the gold price until they fill their coffers.  I'm still convinced that gold sees $2,500 dollars an ounce, and people much smarter than me, like Jim Rodgers think $5K is more likely.  Therefore, you can listen to the media, you can rely on dollars that the Fed uses to steal your wealth, or you can continue to buy gold and know you've got something that has NEVER been worth zero.  Don't get robbed, and don't buy the lies.

It’s going to take all of us ‘getting mad’ in order to right many of these wrongs.  You remember the movie “Network”: “I want you to get mad.  You’ve got to get mad.  You’ve got to say: I’m a human being – god-damn-it.  My life has value.  I want you to get up right now, go to the window, open it, and stick your head out and yell: I’m as mad as hell, and I’m not going to take this anymore!”


The Market...

It is hard to find the words to describe what has been happening in the markets lately.  Each day the market has been pushed to all time highs, despite ever worsening economic numbers.  In the last few days we've seen MOST of the major companies miss on the revenue line.  We've seen mortgage applications fall for 10 weeks out of 11.  We've seen China admit that growth is slowing.  We've seen multinationals like Caterpillar miss earnings and warn that the entire globe is slowing.  Yet the market just keeps getting pushed higher.

Currently, over a quarter of the homeowners in the government program are in default – AGAIN.  Over 306,000 of the 1.2M delinquent homeowners who have received loan modifications under the Home Affordable Modification Program (HAMP) since it was introduced in 2009 – have Re-Defaulted!  The cost to the taxpayer is $815M.

Last month – the average new home sale price had the largest 2-month drop since the Lehman collapse.
  
While the average investor is desperately trying to get into the market at these lofty levels, institutional investors have sold more stock in the last 4 weeks than EVER.  The "smart money" is selling the stocks that they've already profited from.  We know how this is going to end – the average investor is going to get fleeced. 

This week, Face Book beat earnings, blew away the numbers and jumped 20% to beat it’s IPO price for the first time – since it’s IPO.  One thing to keep in mind is that the S&P index has slammed into the 1,700 level before and couldn’t take it out.  If we try again and it still holds firm, I suspect we'll see a pull back.  So watch the 1,700 level on the S&P.

Also – did you see the ‘stick save’ on Friday?  It was like watching a hockey game and Masterpiece Theatre combined.  After Japan had an almost 500 point drop, our market was acting weak at best.  At one point the S&P even lost the 1680 level, an important "support" area.  It looked for all intents that we were going to end the day seriously red – down almost 150 DOW points.  But then, in the last hour of trading, the market started to rise – and from being DOWN over 140 points – we ended the day UP 4 points.  That simply goes to show you the level of manipulation we are dealing with.

This week, The Ben Bernanke will be having a two-day FOMC meeting to discuss monetary policy.  Considering that this market is completely dependent on the Fed’s printing of money, I think that there will be no serious mention of ‘taper’ in his meeting announcement later this week.  He's will say that one might be necessary, but ONLY if the data dictates it.  He will also leave the door open for "endless QE" if the data deteriorates.  If we get past this two-day meeting, and there is no clear worry of taper coming, I think that this market runs right back up and through the S&P 1,700 level.

So as usual, we can't make our investing decisions based on earnings, or book to sales, or margins, or any other normal metric of investing.  We have to base our buying and selling on whether or not the Federal Reserve is willing to debase our currency some more.  I won’t be doing a whole lot in front of the Fed’s decisions this week.  But please be careful out there.   


Tips:

This week we purchased some miners, some materials, and some metal(s) – mostly bottom feeders.  We were stopped out flat on: SRPT, NXPI, ED, & AMAT.  But we’re up nicely on some of these others:

My current short-term holds are:
-       FB – in at 25.61 (currently 34.00) – stop at 33.00,
-       JNJ – in at 89.00 (currently 92.74)  - stop at 91.50
-       BTU – in at 16.27 (currently 16.80) – stop at entry
-       ACI – in at 3.95 (currently 4.21) – stop at entry
-       SLW – in at 21.64 (currently 23.03) – stop at entry
-       FCX – in at 28.47 (currently 28.91) – stop at entry
-       SIL – in at 24.51 (currently 13.55) – no stop
-       GLD (ETF for Gold) – in at 158.28, (currently 128.75) – no stop ($1,321.70 per physical ounce), AND
-       SLV (ETF for Silver) – in at 28.3 (currently 19.33) – no stop ($19.76 per physical ounce).

To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. 

Please be safe out there! a

Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews.  You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com> .

Please write to <rfc@culbertsons.com> to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference <rfcfinancialnews.blogspot.com>.

If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is my handle.

If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing:http://www.youtube.com/watch?v=K2Z9I_6ciH0

To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations.  Mr. Culbertson and related parties are not registered and licensed brokers.  This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document.  Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://
rfcfinancialnews.blogspot.com/> 
Until next week – be safe.

R.F. Culbertson
<http://rfcfinancialnews.blogspot.com>


Sunday, July 21, 2013

This Week in Barrons - 7-21-2013

This Week in Barrons – 7-21-2013

Why Aren't We Saved?

As you may know, I’m no fan of the Federal Reserve.  I think they’re unconstitutional and we would be much better off without them.  That being said: after all of this Fed stimulus, why isn’t this recession over and growth back to normal levels?  After all, we just spent the past two days hearing The Ben Bernanke deceiving us about the economy.  But there was one item of truth that came out of the hearings: The Government isn't helping the situation.   

The Ben Bernanke spent 2 days this week, talking to Congress in what used to be termed: the "Humphrey Hawkins" meetings.  Here's a remark from The Ben Bernanke that should have red flagged all the NSA computers: "Wall Street hasn’t benefited from the Fed’s actions any more than Main Street.”  Sir, how incredibly smug and arrogant of you?  While most of "Main Street" is scared to death of losing their part time jobs – and figuring out IF and HOW they’re going to have healthcare benefits in the New Year – bonuses and salaries at Wall Street Banks have been soaring.  Citizens that have had the good fortune to be able to hold stocks have seen their fortunes increase; meanwhile, those living on Main Street only see their expenses go up!  Didn’t The Ben Bernanke buy up all the ‘toxic sludge’ mortgages that Wally Street bankers had on their books?  Doesn't The Ben Bernanke buy all of the bonds from the Wall Street Primary Dealers giving them massive profits?  Doesn't The Ben Bernanke still allow "Mark to Model" fantasy accounting for banks, turning those banking losses into fictitious profits?  In return – ‘Main Street’ receives Debt Payments.

Consider for a moment the Fed’s statement: “We would like to maintain 2% inflation.”   For years they’ve been successful in selling ‘Main Street’ on how wonderful it is that our currency devalues at a couple percent each year.  Inflation literally means that our currency is "worth less" each year, and we’re being convinced that we should want ‘more of it’?  Economists will tell you that currency devaluation is good for growth.  I disagree.  It’s good for bankers.  It’s good for debtors.  It stinks for ‘Main Street’. 

In years past, the Fed appeared to be the savior to our economy.  If things were too slow, they'd change the interest rate picture, inject some liquidity, and in due time the economy would perk up and begin to grow again.  If things then got a little too hot, they would pull back on the reigns, tighten rates and slow down the train.  Many thought they had it all figured out, and nothing bad could ever happen again.  So why can't our economy seem to gain any traction this time?  Why are we going on 5 full years of incredible stimulus, trillions printed, and the economy is just barely alive.  It is my notion that in the past, we HAD an economy – rather than the fa├žade of one that we’re currently experiencing. 

Think for a minute about the last ‘business friendly’ regulation that has been passed in the last 25 years.  Hummm – let me think:
-       The EPA and DEP are attempting to put coal mining – completely out of business.
-       To open a new WalMart, on average it takes 6 years and millions of dollars worth of studies – just to get to the point of breaking ground.
-       I have friends that spent tens of thousands of dollars on permits just to get a small manufacturing business created.  Just prior to the first shovel of dirt being turned, the EPA changed the rules – delaying their project another 18 months.  They eventually abandoned the project – and the jobs that would have gone with it.

Between an increase in taxes, mandatory health care, much tougher EPA and OSHA regulations, more required types of Insurance along with an increase insurance rates, mandatory disability insurance, an increase in legal and filing fees – is it any wonder that owner-operated small business is at it’s lowest level since records began?  One reason we aren't seeing a booming economy is because our Government (and it’s over- abundance of regulations) is killing the engine for growth.

Next up we have demographics, and they aren't pretty.  If you go back to the 60's and 70's when America was the creditor to the world and anyone that wanted a job could find one in a matter of 5 days – the demographics were much different than today.  After the WWII the GI's came home, went to college via the GI Bill, bought houses, and opened all manner of businesses.  Many created wealth and had children.  But we (as a society) tend to go overboard, spend too much, and take on too much debt.  Today, thousands of baby boomers are trying to retire and can't.
-       Each day almost 4,000 boomers reach the retirement age of 65 (and that number will grow for the next 8 years).  But due to the Fed’s 2% inflation policy (which is really closer to 8%) everything costs too much.  Baby Boomers are finding that they didn't save enough, and can’t retire.
-       45% of all working households have NO retirement assets.  Another 20% don't have enough to last a year.  Now add on to that the age factor, the loss of productivity, the accompanying increase in medical expenses – and it’s not a pretty picture.
-       Lastly, in the 60's, 70's, (and especially through the bulk of the 80's and 90's) people considered their home as their savings account.  Today, we still have over 7 Million homes ‘upside down’ on their mortgages.  We have millions of foreclosures still lurking in the shadows.  So at a time when millions of baby boomers are facing old age, they have no money and their homes can't save them.  

The biggest demographic "group" in our country is rushing headlong into a working retirement, which squeezes an already lousy job market.  21 year olds shouldn't have to fight with a 70 year old over a cashier job at Kmart. 

So, why isn't the Fed pulling levers and pushing buttons in order to fix this recession? They can’t.  This is not solely a monetary problem.  This is a much bigger problem.  No longer will printing money and cutting rates spur big jumps of economic activity.  The economy has been changed at its core, and QE can't fix that. 
-       We’ve never had 50 Million people on food stamps.
-       We’ve never had so many on disability.
-       We’ve never been this far in debt (as a nation).
-       We’ve never lost so much manufacturing.
-       We’ve never had this much regulation.
-       We’ve never had an entire generation (as big as the Baby Boomers) all facing retirement with no means to retire.
-       We've never had a housing market drop so far, and recover so slowly.
-       We've never had prices so high with wages so stagnant.
-       We’ve never had a stock market that cares not about earnings or valuations but simply ‘stimulus’. 
-       We’ve never had bankrupt cities.
-       We’ve never had soaring medical and energy costs.
-       We’ve never had a debt load that ‘mathematically’ is impossible to repay.
-       We’ve never had our top prescription drugs (as a nation) be tranquilizers, antacids, and erectile dysfunction pills!

I still think that the only way past this is thru gold and silver.  For 12 years now I’ve been preaching that buying gold was the single best thing anyone could do.  In 2007 I added silver to that list.  If the dollar is going away, if the entire global financial situation needs a reset – then replacing fiat dollars with a precious metal still sounds responsible to me.

This recession is not over.  The stock market only reflects Bernanke Bucks being jammed into a system that allows Wall Street and the bankers to get bigger bonuses. Detroit has just declared bankruptcy (the biggest city so far to do so), and joins 35 other municipalities that are also bankrupt.  Chicago (for example) has seen it’s ratings slahed 3 notches.  Chicago’s outlook is “Negative", and they recently announced the lay-off of an additional 1000 teachers.  

The Ben Bernanke can keep us alive on a respirator, but he can't fix the underlying disease, and that makes for dangerous times.

The Market:
 
I’m seeing major things happening in gold and silver.  The major banks are dramatically changing their futures contracts from being ‘net short’ to ‘net long’.  Recently J.P. Morgan (JPM) has demanded physical delivery for its silver contracts, something quite rare in the futures business.  (FYI - most commodities are bought and sold for the dollar gains, not really to take possession of the underlying asset. By demanding delivery, the supply system will indeed be in for a shock if this persists.)  JPM has one of the biggest gold warehouses on earth.  Yet for months the amount of eligible gold on hand has fallen.  Late Friday evening, it fell once again, leaving less than a single ton of the metal available.  Two years ago JPM had 3 Million ounces of gold available for delivery – today they have 46K ounces.  Along that same line, I’m seeing multiple countries now requesting their gold to be delivered back to them from the various Central bank vaults.  There is currently a shortage of the physical metal.  All the while, China and several other countries are adding to their gold stockpile.  Something is in the wind.  There is a tremendous "get what you can grab” going on by both Central banks and Sovereigns, and the rigged "paper gold price" take down of the metal was clearly a way to get speculators to sell their gold.  We are approaching a critical mass, where the physical metal may not be available for delivery.  What happens then?  My guess is that they the price will start to rise as those that didn't sell, look at this as an opportunity to "make some fast dollars".  

Look at the miners.  This group was ‘given up for dead’ – but recently Morningstar came out with a 5-Star rating on the group due to their extremely limited downside.  AUY for example, was trading at $8.60 on 6/27, and it closed Friday at $10.50. That's 23% in two weeks of trading.

This week the market was held hostage by The Ben Bernanke testimony.  Next week, I think that the traders will come back thinking that nothing has changed, and Benji’s going to keep the presses oiled and running hot.  If I’m right, there's no reason (other than the wildly overbought technicals) to keep everyone from buying more.  The big discussion is surrounding ‘tapering’ and honestly – it just doesn’t matter!  Even if The Ben Bernanke does announce and then commence to taper back from $85B to $65B – the market will most certainly drop an easy 1,000 points.  But then he will reinstitute  and (potentially) increase QE from the current $85B to $100B. 

Remember there are only two choices.  The FED either “prints forever” or pulls the plug and lets the global markets crash.  Unless those at the very top of the food chain have all agreed that the current global system can't be saved and are willing to start over, history says we will print and print until the weight of inflation takes us down by itself.  And what we heard from The Ben Bernanke during his testimony (twice) was that ‘if the data supported it, they may have to do even MORE accommodation.’  So, if the plan was to ‘crash the system’ – I don’t think he’d be talking about increasing QE.  So I’m on the side of continuing to print – and print no matter what. 

What about stocks?  Stocks are over-extended.  Today’s S&P is trading over 30% above it’s 200-week moving average.  We’ve never been 30% above that moving average before.  Secondly, the angle of ascent is showing that it’s climb is picking up the pace.  From April into May the S&P increased 128 points in just 23 trading sessions – before the market got shaken-up over "tapering".  Then from a low of 1560 on June 24, we gained an incredible 132 points in just 17 trading days.  The ascent is almost vertical.  Being this far over the 200-week average, and seeing a run this blistering, I could easily make the argument the market is going to need a break.  However, there seems to be no end in sight. 

We are cautiously long the market.  If they're going to manipulate it higher, we want in.  But don't forget, going back to November – we have not had any corrective pull back.  We are so overdue it is silly.  Yet they continue to take the daily POMO money and jam it into stocks and push them higher.  This will end one day, and it won’t be a fairy tale ending.

Tips:

This week we purchased some miners – and not just of precious metals – examine the following:

Company                              Description              2009 P/E        2013 P/E (est.)
Agnico Eagle (AEM)            Gold Miner                37.0                8.7      $28.20/sh.
Penn Virginia PVA)             Coal Miner                3.3                  1.0      $5.11/sh.
Barrick Gold  (ABX)              Gold Miner                6.8                  2.4      $16.56/sh.
Petrobras (PZE)                   Oil Producer             3.7                  2.9      $4.37/sh.
Peabody Energy (BTU)       Coal Miner                4.4                  3.8      $16.48/sh.
Ultra Petroleum (UPL)        Oil & Gas                   7.0                  5.1      $21.65/sh.
Newmont Mining (NEM)     Gold Miner                4.9                  4.2      $28.73/sh.
Kinross Gold (KGC)            Gold Miner                9.9                  4.0      $5.14/sh.
PetroChina (PTR)                Oil Producer             7.6                  4.0      $118.63/sh.
Arcelor Mittal (MT)                Steel Producer         6.8                  2.8      $12.72/sh.

The point being – these companies have been ‘beaten senseless’ by the market … and their downside is extremely limited (in my view) – while their upside is 300 to 400% in many cases.

My current short-term holds are:
-       SRPT – in at 41.08 (currently 44.25) – stop at 43.75,
-       NXPI – in at 32.51 (currently 32.69) – stop at 32.40,
-       ED – in at 59.01 (currently 60.49) – stop at entry,
-       FB – in at 25.61 (currently 25.93) – stop at entry,
-       AMAT – in at 16.02 (currently 16.56) – stop at entry,
-       JNJ – in at 89.00 (currently 92.42)  - stop at 91.50
-       BTU – in at 16.27 (currently 16.47) – no stop just yet
-       ACI – in at 3.95 (currently 4.12) – no stop just yet
-       SLW – in at 21.64 (currently 21.15) – no stop just yet
-       FCX – in at 28.47 (currently 28.51) – no stop just yet
-       SIL – in at 24.51 (currently 12.62) – no stop
-       GLD (ETF for Gold) – in at 158.28, (currently 125.21) – no stop ($1,293.30 per physical ounce), AND
-       SLV (ETF for Silver) – in at 28.3 (currently 18.90) – no stop ($19.45 per physical ounce).

To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. 

Please be safe out there! 

Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews.  You can learn more and get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com> .

Please write to <rfc@culbertsons.com> to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference <rfcfinancialnews.blogspot.com>.

If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is my handle.

If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing:http://www.youtube.com/watch?v=K2Z9I_6ciH0

To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations.  Mr. Culbertson and related parties are not registered and licensed brokers.  This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document.  Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog: <http://rfcfinancialnews.blogspot.com/> 
Until next week – be safe.

R.F. Culbertson
<http://rfcfinancialnews.blogspot.com>