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

<mailto:rfc@culbertsons.com>

<http://rfcfinancialnews.blogspot.com>

This Week in Barrons - 1-12-2014

This Week in Barrons – 1-12-2014

In the Short-Term:

Last week I talked about what I feel is coming in the long-term.  I talked about currency resets and other elements that will take years to develop.  But what will happen before we get there?  For the past 6 years, we have seen the Fed ‘make’ the markets go – where they want them to go.  The Fed:

-       Supported the economy enough to keep it functioning,

-       Invented enough economic reports to keep citizens from being afraid, and

-       Pushed the idea of ‘consumption’ to the point of being vulgar.

Not long ago, ‘The Ben Bernanke’ announced that the Fed was reducing their asset purchases of $85 Billion/month by $10 Billion/month.  This was termed ‘tapering’.  This week we found out that the Fed is continuing to ‘invest’ all of the ‘interest’ that is coming due back into the market, and (you guessed it) that amount just happened to be - $10 Billion/month.  Therefore, The Ben Bernanke really didn't cut anything.  He started at $85 Billion/month, added the interest payments that would have made it $95 Billion/month, and ‘tapered’ by $10 Billion to get us exactly where we started.  But that is exactly the problem; we only know what we’re being told.  Remember, a lawsuit had to be filed against the Federal Reserve in order to find out that they had actually printed $16 Trillion and sent it to Europe during the height of the financial crisis.  So telling us the correct information is NOT the Fed’s strong suit.

But, let’s put that aside for a moment.  We all know that a large percentage of the stock market gains in 2013 were as a result of the Fed printing money, pushing it into banks, and the banks investing it into the stock market.  If the Fed curtails printing, then common sense will tell you that stocks will fade-off accordingly.  I know that TV’s ‘talking heads’ will say that the economy is accelerating, and the Fed can cut out ALL their printing by September or October.  But honestly, NO amount of increased economic activity is going to produce $1.1 Trillion worth of ‘free-money’ cash flow – ready for the banks to invest into the capital markets.

This leaves us in a quandary.  While we are seeing pockets of economic strength and activity, it’s just not at the level we need to keep our markets where they are without Fed money.  Last week we heard from FedEx that they are going to borrow more money in order to buy back a couple billion dollars worth of their own stock.  This does two things: (a) It reduces the ‘float’ (the amount of stock available for purchase) – thereby causing investors to pay more to buy the existing stock, and (b) It artificially boosts FedEx’s earnings per share (EPS) – a common measure of CEO effectiveness.  For example:

-       If you’re the CEO of FedEx – you need to show EPS growth,

-       You know that your earnings are going to stink like 3-day old fish,

-       You know that you can’t increase sales, or reduce costs any further,

-       Therefore, the only element you can change is the number of shares outstanding, which allows your existing profits to be divided over fewer shares.

-       So if you reduce the float by 10%, you have increased your earnings per share by 10%, without impacting the economy (jobs) at all.

Well – you say: “So What?”  Consider this:  the Fed’s money has a few intended consequences – the most important of which is to keep interest rates low.  Will interest rates remain low if the Fed continues to ‘taper’?  No.  If the Fed wasn't in the market buying up U.S. debt (and keeping mortgage rates low) – we would NOT be looking at 2.9% rates for 10-year Treasury bonds, or 4.2% mortgages.  We would (instead) be looking at 4.5% 10-year rates, and 6.4% mortgages.  We would NOT be seeing corporations borrow money in order to buy back their own stock (because interest rates would be too high to pay back the loans).  And we would NOT be seeing a DOW at 16K.

In other words, talk is cheap.  The Fed can say that they’re going to stop printing, if the Fed money stops – interest rates rise, and the economy and stock market stall and fade.  It’s my view that the Fed will NOT decrease the amount of their printing this year at all.  As Ms. Yellen takes over the helm at the Fed, she will not be willing to enter into the New Year with a crashing stock market.  I'm fairly confident that she'll keep the monetary spigot wide open.

However, this does introduce another short-term problem.  Stocks are expensive right now.  Because there have been more pre-warnings this quarter than we have seen in 10 years, analysts have reduced their expectations.  Expensive markets at a time when companies are struggling to beat already lowered estimates – means that no company can ‘bluff’ its way higher if the Fed's money supply dries up.  As sad as this seems, I think we need the Fed’s money supply in order to make more ‘goofy’ excuses as to why stocks should be going higher.  It’s sad because we have a stock market at all-time highs, while our nation is seeing:

-       A record number of citizens on disability,

-       A record number on food stamps,

-       A record number on Government assistance, and

-       A record number of Part-Time workers.

Therefore, the stock market and the general economy are tied directly to the stimulus provided by the Fed.  If they keep the spigot open, there is no reason why we can’t see the market at 18K or 19K by year’s end.  Of course that’s not right – but if the banks are going to take in free money, and not lend it out, they will certainly place the bulk of it into the stock market as they’ve done in the past.

So in the short-term, the dollar is debased and the stock market moves higher.  I think a way out of this mess would be to: (a) open the oil fields, (b) build 10 refineries, (c) cut the EPA and other government ‘red tape’ on businesses, and (d) lower the barriers to entry for a small business.  But nobody will do that – not with virtually every year being an election year.

I think that this market moves higher by double digits this year.  One interesting element to make note of – is that during the past couple of months we have seen some ‘major’ selling from the likes of Warren Buffet and other billionaires.  Insiders are selling more of their own stock at the fastest pace since 2007.  All the while J. Q. Public is thinking that it’s time to jump aboard the stock market train (again).   Realize – often when this happens – the train has already left the station and it’s J.Q. Public who suffers.

Next week, I will focus on Gold and Silver.  Many are wondering if the precious metals have had their ‘day in the sun’ and are now going to take a ‘pause’.   Next week I’ll put my cards on the table.

The Market:

On Friday, we received the Government’s take on how many jobs we produced in December.  The expectations were for over 200K new jobs.  The real number came in at an incredibly lousy 74K.  As if to add insult to injury, with 347K people ‘giving up’ looking for work – the unemployment rate actually FELL to 6.7%.  We are now at the point that (out of a total U.S. population of 320 Million) – 91.8 Million are no longer in the work force.  This level of labor participation rate has not been seen since 1978.  Just about one-third of all the people in this country do NOT have a job!  And our stock market is at all time highs.  What’s wrong with this picture?

The ‘talking heads’ are dismissing Friday's jobs report as an anomaly, but I believe it actually tells the correct story.  The jobs we are creating are part-time and low paying.  The good news is – that because the employment number was so bad, it would be hard for even the Fed to support increased tapering.  So as disgusting as this sounds, chances are good that the jobs report will be accepted as a need for a stimulus continuation and will push the markets higher.

Over the past week, a lot of stocks did some ‘backing down’.  A sector that did move higher was the ‘transports’.  One of the old adages of the market is that it can't be a real ‘bull market’ unless the transport sector confirms the move higher.  Well, the transport sector did that – on a decidedly lousy week.  That said, I thought that we’d start this year fairly robust and then trail off during earnings season.  It is possible that the game plan has changed, and we are seeing a bit more backing and filling earlier in the month than I expected.  

The market players are quite expert at making ‘average folks’ believe we're in an economic sweet spot.  While driving the other day, I listened to a talk show where the caller asked the question: “With the stock market at all time highs, and with corporate profits soaring, why does anyone think that Obama's policy aren't working?"  Be careful here, as this is the thinking that gets J.Q. Public investing in the ‘buy high – sell low’ strategy.

You can lean long, just be cautious!

Tips:

Virtually everywhere I look, people are talking about the 3D printing space.  This week’s Consumer Electronics Show (CES) caused some stir surrounding 3D printing companies: 3D Systems (DDD) and Stratasys (SSYS).   One investment firm even raised its estimates on Friday for DDD to $98, and for SSYS to $165.  CES did bring out some interesting announcements – for example:

-       The CubeJet – a sub-$5,000 printer that combines ColorJet printing technology with the ease-of-use of less expensive Cube printers,

-       The Touch, a $499 3D sculpting/design mouse,

-       The ChefJet and ChefJet Pro - for printing edible confections,

-       The CeraJet a sub-$10,000 printer for creating color ceramic objects, and

-       The Cube 3, a sub-$1,000 device that is the first plug-n-play consumer printer.

Rivals to these two market makers were busy launching sub-$1K 3D printers – all emphasizing ease-of-use.  These newer companies can't match the software support and web marketplace ecosystems DDD and SSYS provide, but will provide low-end pricing pressure.  FYI: 3D Systems now trades at 74X 2014’s estimated earnings per share, and Stratasys trades at 57X 2014’s estimated earnings per share.

The parabolic nature of this industry should bring pause to investors.  DDD needs three years of 30% revenue growth and zero stock gains in order to get their existing revenue levels down to even 10X levels.  Even more concerning for DDD investors is that their ratios are now so far ahead of their primary competitor SSYS, that DDD is making SSYS the better ‘value’ investment.  The likely outcome is that DDD will come back to Earth (over time) while SSYS will remain grounded at these levels.  The 3D printing industry remains in a fantastic bull mode, but investments typically don't end well at these lofty multiples.

We previously outlined a ‘covered call’ investment strategy that has certainly helped us in an up-trending market.  Next week we’re going to outline a ‘sister-strategy’ that will add some support in ‘down-trending’ markets as well.

This week I sold my XHB – Mar 2014 $33 Calls for over a 40% gain, but USO, UCO, and even FXY did come under pressure.  I added some ATVI and NVDA this week and put a ‘toe in the water’ with DECK and SINA.

My current short-term holds are:

-       USO – April 2014 $37 Calls – in USO at $34.51 (currently $33.28)

-       FXY – March 2014 $97 Puts – in FXY at $96.47 (currently $93.82)

-       EMC – in at 24.74 (currently 25.35) – stop at entry,

-       DDD – in at 82.60 (currently 94.25) – stop at 93.00,

-       SSYS – in at 126.63 (currently 133.65) – stop at 132.00,

-       SIL – in at 24.51 (currently 11.36) – no stop,

-       GLD (ETF for Gold) – in at 158.28, (currently 120.43) – no stop ($1,249 per physical ounce), AND

-       SLV (ETF for Silver) – in at 28.3 (currently 19.39) – no stop ($20.18 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

<mailto:rfc@culbertsons.com>

<http://rfcfinancialnews.blogspot.com>