By David Galland, Managing Director
It has become tradition at La Estancia de Cafayate for Casey Research to host an intimate conference in conjunction with the Harvest Celebration. In the most recent of the series, Bill Bonner, editor of the Diary of a Rogue Economist and a friend of long standing, kicked the program off with a thought-provoking discussion about the nature of information.
With a nod to Nietzsche, Bill dissected the nature of information into two categories.
The first sort is that which is derived from direct observation. For an example, Bill pointed to the tangible information that comes from living in a tribal village. As a member of the tribe, you knew your neighbors, you knew what sort of crops would grow in the different seasons, where and when to hunt, etc.
Paraphrasing Bill, "If a member of the tribe came running into the village yelling that an enemy tribe was about to attack, you would have direct knowledge that there was an enemy tribe residing in the area and that the fellow doing the yelling wasn't the sort to just make it up. So you could be certain an attack was likely."
Given this high quality of information, Bill continued,
For subscribers of the SK OptionTrader service, 2013 has been phenomenal. All of the trades that we have closed have been winners, and we have added to our streak again as gold has collapsed. We were held the belief that the gold bull market had finished its run for the current cycle in February, and therefore have been profiting from the deteriorating gold prices ever since.
Last Thursday, March 11th, we recommended to our subscribers to “buy GDX Sep 21 '13 +$30/-$25 Put Spread at $0.80”. The end of the bull market would trigger an absolute capitulation in gold stocks; we had set a target of 300 for the HUI, which has now been reached. Through Friday and Monday’s trading periods the HUI crashed and fell 14.87%, resulting in a drop of 17.78% in GDX. This drove the value of our Put Spread from $0.80 to 2.20, that’s a 175% gain in just 2 trading days!
Gold has taken its biggest 1 day fall in COMEX history, gold mining stocks are down even more, silver has lost nearly 18%, and junior miners have lost nearly 20%. Even the S&P 500 is also showing a loss. However, our subscribers are not down; in fact the SK OptionTrader portfolio is up a massive 10.03% in one day!
We believed that the bull market may well be over, and voiced our views
By International Man,
"In this world nothing can be said to be certain, except death and taxes.”
– Benjamin Franklin
In most cases, Mr. Franklin's statement would be correct. However, as you will see below, there are some countries in the world where you can be certain you won't pay taxes.
With the year 2013 marking the 100th anniversary of the income tax and the Federal Reserve in the US (two of the most powerful tools the government uses to extract wealth), I thought it would be useful to look at when Tax Freedom Day occurs across the world to gain some perspective.
Tax Freedom Day (TFD) is the day of the year that the average person has in theory earned enough money to pay his or her annual tax bill.
If TFD falls on January 1, that means you are a milk cow for ZERO days out of the year for the government. If it falls on June 30, it means you are working 181 days each year to pay off your taxes.
Unfortunately, most of us will spend some time during the year acting as a milk cow in some fashion for a government.
Below is a table showing when TFD hits in the countries within the EU.
The government of Hungary, Belgium, and France are the worst offenders in the EU, keeping their citizens in tax servitude astoundingly until around August each year.
If you are unlucky enough
Over the last 10 years, gold bulls have had a fantastic run as gold rose more than 475% to its August 2011 highs. Even after the recent collapse in gold prices the metal is still up more than 350% in the last decade; the simple strategy of “buy the dip” has yielded enormous profits.
Gold bulls have been able to make gains for years by merely buying gold whenever the price dropped as the next rally would result in new highs before a great deal of time had passed. This however raises the question of “what happens when gold does not make new highs?” The answer is that those who have been employing this strategy lose money; gold dips and the perma-bulls buy, gold dips again so the perma-bulls buy again, gold continues on a downward trend and the once profitable strategy of “buy the dip” soon eats away at the profits that it once generated.
The difference between being bullish and a being a perma-bull is that a perma-bull will always buy the dip. This difference makes being a perma-bull a reckless, dangerous, and unprofessional trading strategy, and the result is potentially devastating to a portfolio. We have no issue with one using a bullish or bearish strategy, provided that it comes with a plan B in case they are wrong. The problem with being a perma-bull is that they do not have a plan B or a contingency plan, and believe that they cannot be wrong.
It is safe to say that last week for SK OptionTrader subscribers was at the very least, a good one. We closed two separate trades that made money due to the falling prices of both silver and gold stocks. We have long been of the belief that these stocks are a big “no-no”, when it comes to investments, if you want to make a profit that is. Therefore we have taken positions that benefit from this consistent underperformance, and have banked gains as a result.
Silver prices look to be continuing where they left off on Friday as early trading in the southern hemisphere has silver down about $1.00 as the chart indicates. It’s going to be a white knuckle ride with volatility being the order of the day.
2013 has been a year of milestones for SK OptionTrader thus far. We have closed our largest winning trade to date, a winner of 212.50%. We have closed over 100 winning trades, and have made over a 500% return since the beginning of our service. With our latest trade we are celebrating the milestone of having closed 120 trades closed.
SK OptionTrader recently closed a trade on Silver Wheaton; using puts to take advantage of the plummeting stock price. This particular trade pushed our overall returns since inception to a total 506%! These returns have been generated over the 3 years and 8 months that our service has been operational. This means that if one had invested $10,000 in 2009 and followed our signals, this would now have been worth approximately $60,599.55.