RF's Financial News

RF's Financial News

Sunday, January 26, 2014

This Week in Barrons - 1-26-2014


This Week in Barrons – 1-26-2014

The Day After Tomorrow… starring Dennis Quaid & Ms. Janet Yellen

As I look outside my window in Pittsburgh, PA. – the scene looks and feels like it came right out of the movie: “Day After Tomorrow” starring Dennis Quaid.  But I digress.  Currently, the DOW is sitting at 15,879.  I remember just 3 weeks ago (approaching the end of 2013) the DOW was 16,576.  For the past 3 weeks we have peeled off about 250 DOW points per week, all leading up to Friday’s loss of 318 points in a single session.  All of the regular questions surface: Why the soggy performance?  Why the big down days?  Why no earnings run?  I suggest that there are several ‘excuses’ (but only one answer) that I will toss on the table:
1)    The news out of China is not good.  We’re finding that the visible side of their economy is just as horribly corrupt as other developing nations.  Their bad loan portfolios are loaded with junk.  For many years we have sent China our dollars in exchange for ‘every day low prices’ on goods that Americans did not need and could not afford.  It was a twisted form of vendor financing for the entire U.S.  This exchange has become so much a part of our fabric, that any malfunction there causes a stir.
2)    The Emerging Markets are just that – emerging.  The emerging markets are so completely dependent upon the U.S. ‘printing money’ that as our economy hiccups – theirs takes a punch to the stomach.  You need to look no further than the currencies of Argentina and Puerto Rico (a U.S. territory) – as they are both facing Greek-type defaults.
3)    The ‘Dry Shippers’ have all but ‘dried up’.  The movement of goods around the globe via ship is called ‘dry shipping’.  The dry shipping pricing rates have fallen 71% year over year, and the index (which measures the volume of material being shipped) is also down 43% year to date.  Logic dictates that if our economy was running on all cylinders, then the demand for shipping goods would be high, and prices would be increasing.  Factually: more capacity did come on line, but not enough to see an almost 50% drop in prices year to date.
4)    Housing continues to take a hit.  A shout out to S. Forbes for bringing to our attention plummeting pending home sales in California.  In December 2013, pending home sales in California fell 25.2% versus November.  The second consecutive monthly fall is being attributed to (a) a shortage of homes for sale, (b) rising interest rates, and (c) higher home prices.  There's no question that affordable housing was a driving force in the U.S. economy from 1950 right through 2006.  But despite low interest rates and a build up of the amount of people that would like to have a home, we simply don't have the jobs, or the income to support a thriving housing market.  The Blackstone purchase of 30,000 houses for rental purposes is NOT indicative of a strong housing market.  Strong housing happens when people have jobs, are comfortable in their situations, and are willing to sign on the dotted line.  With 92 million Americans out of the work force, this simply cannot happen.
5)    Let’s not forget gold.  Gold futures surged to $1,262.30 this week while the Dollar Index plunged to its largest daily percentage decline since mid-October.  If India does relax it’s draconian import curb on gold, as recommended by Congress party leader Sonia Gandhi, the pent-up demand for gold would help gold prices this year.  But be careful here as it could only be a matter of time until JP Morgan beats it down again via naked shorting.
6)    The jobs situation is now at the mercy of Obamacare.  It’s becoming very clear that our Wall Street cheerleaders and politicians do not understand basic math.  Assuming the published inflation numbers are correct (and they’re not) – they fail to take into account the compounding effect associated with 2+% inflation for the past 40 years.  To demonstrate this effect you simply need to walk down the aisles of a grocery store to find that prices are ‘out of sight’ for the things that we need.  Doing some basic arithmetic, according to the Bureau of Labor Statistics, of the 109 Million full-time wage or salary workers:
a.    $40,872 / year is the average, annual, gross paycheck.  Remove the bare minimum of 25% in taxes (federal, state, local, FICA, Medicare, etc.) =
b.    $30,000 / year          By converting this to a monthly amount =
c.     $2,500 / month.        By subtracting the average rent and automobile =
d.    $700 / month to pay for: food, insurance, utilities, cable, cell phone, clothes, repairs, entertainment etc.  Therefore, the average person really needs to ‘live with someone’ in order to make ends meet. 
The low level of job creation combined with the accumulated ‘compounding’ of inflation has culminated in an atmosphere where we have priced ourselves out of the luxury of having a middle class.

I think all these elements added together are more than enough to toss the ‘Fear of God’ into the markets.  But the truth is, we've had these issues for years and the market blindly moved higher and higher.  So, if we're really going to get a big correction, I think that the real reason is The Fed (FOMC) meeting that begins: ‘The Day After Tomorrow’.    The ONLY reason this market has marched relentlessly higher year after year was QE1, QE2, the Twist, and QE3.  But now that the Fed is truly going to taper, the market is questioning whether the economy is strong enough.

The first taper (last month) – was really a ‘slight of hand’.  Most people realize that as they were tapering, the Fed was also ‘pushing back’ some maturing debt so that the net amount was a virtual ‘wash’.  But if they do another taper – taking us down to $75B per month – there is nothing else to inject from the other side.  Now $75B is still a lot of money, but this market was based upon $85B flowing into the system.  When that amount is reduced by 12% ($85B to $75B), the corresponding stock action will be reduced accordingly.  So it is my suggestion that the 318-point drop on Friday is much more over the worry of what happens ‘The Day After Tomorrow’ (a Fed tapering) than any news from China, or emerging markets.

Which begs the question: Will the Fed cut another $10B next week?  I think they will.  If only because they told everyone that the program of cutting would continue. The Fed has sent its henchmen out over the past weeks to talk at symposiums and preach the glory of cutting back the stimulus.  But, I tend to think that this taper comes with a laundry list of commentary about how it isn't written in stone that any additional tapers will be forthcoming.  They may continue to say that if the data continues to weaken, they can stop or even reverse the taper.  If the Fed’s commentary mentions a ‘slowing’, a ‘stoppage’ or a ‘reversing’ of the tapering program, the market will breathe a big sigh of relief and go back to pushing overpriced stocks higher.  But if they taper and hold the line on their rhetoric about further cuts, I can finally see us facing our first 7 to 10% correction.


The Market:

How important is the Fed in the grand scheme of things? You can say what you'd like, but as I look around:
-       HSBC (a major British Bank) won't let people withdraw their money unless they have a signed paper from the person the money is going to.  If you just want to take your money out, the answer is ‘NO’.  This is ‘Cyprus-Lite’, happening in a major British bank.
-       Gold has begun to move higher as physical demand has gone parabolic (in the shape of a hockey stick).  On Thursday, JP Morgan's vaults saw the second biggest draw down in history.
-       The Chinese ‘shadow banking system’ is a bigger Ponzi scheme than ours, and major cracks are showing.
-       Japan is printing money like crazy, but the people are seeing none of the benefits.
-       So what else is there if not The Fed?

I've said for years; if the Fed continues to print, we will collapse on ourselves.  If the Fed removes the stimulus, we will collapse on ourselves.  So, it is simply a matter of which medicine we take.  I think we will be given the ‘Fed printing’ medicine.  That means, that while I do think they will taper on Wednesday, that very well could be the last taper – and in fact the next move could be some new program designed to ‘jam money’ back into the system.

Friday we were down 318 points on the DOW.  It was almost a mini panic.  Currency markets were going crazy, and it was the first real whiff of fear I've seen in many months.  And, the market makers have every right to be afraid.  I took profits on all of my short-term positions within the first half-hour of trading.  While this market was set up for a pullback many times during the past year, each time it was met with a ‘buy the dip’ reaction.  On Friday, there was no sign of that.  In fact Friday's action said: ‘GTFO’ – Get The ‘Heck’ Out.

Technically, we have broken through many support levels.  On the DOW our next ‘light’ support level is around 15,757, and that’s another hundred points down from here.  The S&P has some loose support around 1,775, but it wouldn’t take much to lose both of those levels of support.  While the market makers could pull a rabbit out of the hat, the picture right now is bleak.  The S&P is off about 3% from its highs, and the DOW is off about 4%.  This is as deep as they've allowed any correction for a year.  Maybe ‘the powers that be’ can halt the bleeding here, but frankly it doesn’t look like it.  Which brings me right back to the Fed.  If Monday is ugly and there's market follow through to the down side, if there's more currency disasters in emerging markets, then what The Fed SAYS on Wednesday will be absolutely vital.  If The Fed talks strongly about monitoring the data and halting the taper, then the market will firm up.  If The Fed does not, then we could finally see our first big drop.  Please be very careful here.


Tips:

I almost forgot, a story that broke out of L.A. this week talks of $6.6B (in cash) that has come up missing.  It seems that the man Congress put in charge of auditing the billions of dollars dumped on Iraq after Saddam Hussein was toppled – has told the Los Angeles Times that he can't rule out the possibility that the missing $6.6 billion (in cash) (sent from the U.S. to Iran) was stolen.  This is somewhat humorous, as it would take approximately 12 separate C-130 flights to carry this much cash.  But with a ‘straight face’ the special inspector general for Iraq reconstruction Stuart Bowen told the Times the missing money may represent "the largest theft of funds in national history."  This money came from a special fund set up by the Federal Reserve Bank of New York with Iraq's own money – funds which were withheld from the nation during a decade of harsh economic sanctions under Saddam.  Now, the real ‘kicker’ is that Iraq would like it’s money back, and has threatened to take the U.S. government to court to reclaim it.  The last known holder of the funds, before they mysteriously disappeared was the U.S. government.  "Congress is not looking forward to having to spend billions of our money to make up for billions of their money that we can't account for, and can't seem to find," said Rep. Henry A. Waxman (D-Calif.) told the Times.

The good news:       This week I sold all of my UNG (natural gas) holdings for a huge profit.
The bad news:         I sold it too soon, as it continues to go up. 
The other news:       I was stopped out flat on virtually everything else: MDLZ, MOS, PFE, and EMC.  The currency situation with Japan is troublesome – and my nearly flat FXY position reflects that.

I’m not comfortable blindly buying the stock indexes at these levels.  But (at the same time) I’m scared of shorting this market.
-       One of the asset classes that I like right here is Gold (GLD) and Silver (SLV).  With Gold (GLD) moving over $1,260 / ounce – it should get to 1,300 fairly quickly.
-       Another group that I like (but want to see rebound) are the Bio-Techs, and names like: GILD, INCY, CELG, REGN, and BIIB are definitely on my radar – despite the recent turmoil.

My current short-term holds are:
-       USO – April 2014 $37 Calls – in USO at $34.51 (currently $34.58)
-       FXY – March 2014 $97 Puts – in FXY at $96.47 (currently $95.47)
-       SIL – in at 24.51 (currently 12.38) – no stop,
-       GLD (ETF for Gold) – in at 158.28, (currently 122.29) – no stop ($1,264.50 per physical ounce), AND
-       SLV (ETF for Silver) – in at 28.3 (currently 19.16) – no stop ($19.90 per physical ounce).

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

Please be safe out there!

I'd like to recommend a website - http://www.simpleroptions.com    It's an excellent resource and 'honestly' - I've been following them for over 6 months and they're more right than they are wrong with their predictions, and that's a rarity in this climate.  Please check them out on my recommendation.

Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. 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 Mr. Culbertson at: <rfc@culbertsons.com> to inform him 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 his thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is the 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, January 19, 2014

This Week in Barrons - 1-19-2014


This Week in Barrons – 1-19-2014

What’s wrong with this picture?
  
As I look over the past month, I’m still struggling with reality versus fantasy.  Here are a couple examples from this week’s data: 

1.    Despite a small December rebound, the 2013 U.S. export container volumes were below those in every month for the past 3 years.
a.    In a world where everyone tells us that the U.S. economy is recovering, this is very bad.  Countries create wealth by exporting goods.  When export volumes fall, wealth is being drained from that country.
2.    Wells Fargo expects Q1 2014 mortgage originations to decline substantially from Q4 levels.  Bank of America’s mortgage originations decreased in Q4 by 49% from Q3 levels.  Citigroup says that the U.S. mortgage business will continue to drag down corporate results in the first half of 2014.
a.    But Jim Cramer is telling me that the economy is moving ahead, and that the housing market is driving this recovery.  Are falling mortgages a signal of a strong housing market?
3.    November’s retail sales results were revised lower.
a.    The ‘talking heads’ told me that the issue with December’s number was the weather – it got too cold in December.  But with November’s numbers being revised lower – does that mean our economy is in trouble?
4.    24% of U.S. corporate bond issues in 2013 were rated: ‘Junk’.  This is up from 8% in 2008.
a.    If I understand this correctly:  Corporations borrow money at virtually zero percent interest, and then sell this debt (that is rated ‘junk’) to the people in the bond market.  These same corporations then take the proceeds from the sale – buy back their stock – which increases their earnings per share and correspondingly – their salaries.  Swell.  Who’s protecting the ‘suckers’ in the bond market who bought this ‘junk’ debt?
5.    Gallup announced Wednesday that 42% more Americans say they are financially ‘worse off’ now than they were a year ago.
a.    This is the same week that President Obama told me that he has created 8 million jobs, the recovery is strong, and the future is bright.  How then could almost half of all Americans say that they are financially worse off?  Someone is lying to me – yes?
6.    The NSA is collecting over 200 Million text messages per day.
a.    But wasn’t I just told that the NSA doesn’t spy on me?   And that all of this was just them collecting ‘meta data’ – little squiggles that don’t really mean anything.  Now I find that it’s entire texts and phone messages.  I need to assume that ‘Big Brother’ is always watching, but why?
7.    The CEO of the Marriott Corporation says that Marriott needs the immigration bill so that he can staff his resorts.
a.    There’s nothing more that I can add to this comment.

I'm sure that this phenomena it not unique to me.  But, wouldn't it be a real breath of fresh air to hear the truth now and then?  The bottom line is: No matter what you hear on CNBC, from your politicians, or on your local TV station about the economy – you are only hearing what they want you to hear.  Cheerleading the market and the economy has evolved into a ‘full-time’ job.  Don't take anything at face value.  And never stop doing your homework.

Thanks to Bob Lefsetz for reminding me of Jay Leno’s manger (Helen Kushnick’s) quote to Jay:  I've been serving you steak dinners for the last eighteen years.  I just haven't bothered showing you how I slaughtered the cow."  Unfortunately – in this day and age, all of us need to continue to look under the covers.

The movie ‘American Hustle’ told it best.  From Amy Adam’s outfits, to Bradley Cooper’s perm, including an unannounced cameo by Robert DeNiro – the ‘hustlers’ constantly adjusted their winning formula.  Not once did they consult a ‘playbook’ written by some ‘professor’ who had never ‘walked the walk.’  They were writing the playbook as they went along.  They were experiencing the thrills, the distrust, and the ambiguity mixed with lies.  It was an era in the 1970’s when you won by not getting caught, and very few won big.  I sure hope that history isn’t repeating itself – 40 years later!


The Market...

This was a ‘Wild, Wild West’ week for sure. 
-       Monday we dropped 177 points.
-       Tuesday we gained some of that back.
-       Wednesday we ‘lit it up’ and closed almost 30 points above Monday's open.
-       Thursday we couldn't hold the gains, and fell 60 points.
-       And Friday, the markets did their best to put on a good show, but couldn't recover Thursday’s entire drop.

After all of this week’s ups and downs, the DOW ended 24 points higher than where it started.  The problem (however) is that the DOW is only 30 stocks.  The S&P (a larger market indicator) was slightly negative for the week.  A couple other indicators, the DOW transports and the XLF (the financial institution ETF) also fell on Friday.

This means that the market is struggling.  It means that the animal spirits are still alive and ‘want’ to push things higher, but unless you're a criminal bankster – the earnings just aren’t there to support such a move.  The retailers are hurting, housing is weak, and even casual dining is on a gradual decline.  Nobody wants to admit that the only reason the market is up is because of Fed money.

But how many times have we seen the market set-up for a correction, only to see it blast higher and set new highs?  Why would this time be any different?  The louder I hear people screaming about it ‘not being a bubble’ – the more of a bubble that we’re in.  For example: symptoms of a strong economy do NOT include:
-       1/3 of the population being out of the work force.
-       42% of Americans saying that they are financially ‘worse off’ than a year ago,
-       The Fed pumping $80+ Trillion a month into an economy,
-       And having retailers shut stores by the hundreds, and lay off people by the thousands.

The investing philosophy that has worked best for the past 18 months has been to smugly say: "The trend is my friend, and the trend is to buy the dips".  It has been proven to be correct, and it could very well be correct this time.  The issue is that if ‘reality’ had any bearing on the market – we would have had a true 10% correction many times over.  Unfortunately reality isn't part of the current equation.  So, just like everyone else, we need to assume that the ‘trend is our friend’, and the Fed will be coming in to jam the market back up to the highs set on the last day of 2013.

We are overdue for a monster correction.  To a person, the talking heads predict that the market will continue to do a little shake-n-bake – where it dips 1 or 2% and you simply ‘buy the dip’.  However, right now the market appears vulnerable to some selling.  The transports are weak, the financials didn't follow through, and earnings have not been stellar.  I’m fearful of years like: ’73, ’78, ’82, ’88, 2000 and 2008 – when the air did come out of the market.  Or maybe this is the ‘new normal’, and we’re never going to see a down year again.  In which case, I’m potentially better off sending Goldman Sachs a check with all of my money right now – because they’ll get it eventually.

Enjoy your Holiday and be careful!


Tips:

I was stopped out of DDD and SSYS this week at +$11 and +$5.50 profits respectively.  We’ll dive back into them this week – now that they’ve had their mini-correction.

There is a war brewing – involving some major asset classes:
-       The S&P’s (SPY):    It continues to churn – not getting all that far away from 183.70.  The question is: are we consolidating here to head higher, or is it time for a pullback?
-       The Yen (JY):            The correlation between the Yen and the U.S. stock market is very clear.  When the Yen goes lower – stocks move higher, and when the Yen goes higher – stocks move lower.  Currently the Yen is moving higher, and has reached an inflection point where it needs to make a decision over the next several days.  If the Yen breaks above 0.9616 our markets could be in big trouble; however, if the Yen breaks below it’s previous low of 0.9531, then our markets could be off to the races.
-       The Bond market:    We’re still asking the question will bonds go higher?  Part of the reason that the stock market has been consolidating is that the Bond market has been fairly strong as of late.  Again – it will show it’s true colors this week.
-       The Dollar Index:     The dollar index is looking ready to rally – and if so – this could very well turn into a ‘risk off’ type of move where stocks will be negatively impacted.

Therefore, I’m not comfortable blindly buying the stock indexs at these levels.  But (at the same time) I’m scared of shorting this market.
-       One of the asset classes that I like right here is Gold (GLD) and Silver (SLV).  If Gold (GLD) can move above 1,260 – it should get to 1,300 fairly quickly.
-       Another group that I like are the Bio-Techs, and names like: GILD, INCY, CELG, REGN, and BIIB are worth an investment.

My current short-term holds are:
-       EMC – in at 24.74 (currently 26.33) – stop at 25.85,
-       PFE – in at 31.11 (currently 31.15) – stop at 31.00,
-       MOS – in at 48.06 (currently 48.50) – stop at 48.60,
-       MDLZ – in at 35.50 (currently 35.70) – stop at entry,
-       USO – April 2014 $37 Calls – in USO at $34.51 (currently $33.65)
-       FXY – March 2014 $97 Puts – in FXY at $96.47 (currently $93.98)
-       SIL – in at 24.51 (currently 12.29) – no stop,
-       GLD (ETF for Gold) – in at 158.28, (currently 120.99) – no stop ($1,252 per physical ounce), AND
-       SLV (ETF for Silver) – in at 28.3 (currently 19.50) – no stop ($20.30 per physical ounce).

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

Please be safe out there!

I'd like to recommend a website - http://www.simpleroptions.com    It's an excellent resource and 'honestly' - I've been following them for over 6 months and they're more right than they are wrong with their predictions, and that's a rarity in this climate.  Please check them out on my recommendation.

Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, R.F. 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 Mr. Culbertson at: <rfc@culbertsons.com> to inform him 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 his thoughts - please feel free to sign up as a Twitter follower -  "taylorpamm" is the 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>