Got this email this morning. I am so contrary that I don't like to learn of an advisory service that advocates what I think and do. I guess it's the old Groucho Marx syndrome, "I do not care to belong to anything that would have me as a member":
Don't Get Caught Short In Another Bear Market Rally
Date:
Fri, 9 Aug 2002 18:00:00 -0500
From:
The Daily Reckoning <Pop-Ups@agoramail.net>
Reply-To:
dailyreckoning@agora-inc.com
To:
<htkirbys@uncg.edu>
Dear Daily Reckoning Reader,
You don't win a lot of friends when you point out that we're in
the midst of the worst disaster in modern financial history. For
two years we've been saying the bubble on Wall Street is worse
than '29 and the economy is following Japan into deflationary
depression.
We believe that before it's over, this bear market will be the
most costly, destructive and calamitous event you'll face as an
investor.
Yet being a realist about the market doesn't mean you can't make
money. Lots of it, even. Let me share with you a letter we
recently received from a subscriber to Strategic Investment.
"Like many others..." F.W. says, "...I want to thank you for your
early yet oh-so-timely suggestion to acquire these Dow Puts. I
have personally ridden this sled up and down through 3 bear
market rallies, reaping close to $10,000.00." He ads that "Each
time I bailed, it turns out there was some cash left on the table
in further market movement. After moaning about it awhile, I was
reminded of the old saw 'Bulls make money and Bears make money,
but pigs get slaughtered.' I'm $10k ahead and smiling."
And even as financial stocks have been hammered, SI subscribers
have made money. "Just thought I would let you know that when you
recommended shorting Merrill, COF, and JPM, I turned around and
bought puts on each," a subscriber recently wrote. "I made 81% on
Merrill, 603% on COF, and 159% on JPM." And yet another said, "I
have been with you for all of two weeks now and have made close
to $10,000. I shorted COF and MER for nice profits."
Fact is, there are ALWAYS specific ways you can make money, even
if you believe, as we do, that the market is headed for epic
disaster. Wide swings in the Dow like those we've seen this week
and last... suck bullish and hopeful investors back in with a
vengeance. But the fundamentals tell a different story... and the
primary trend is down, down, down. Sell the rallies.
We have said: "panic now, avoid the rush..."
But there's a lot you can do to hedge against a bear market. You
can short vulnerable stocks and make money. You can buy cheaply
priced puts on the Dow and make lots of money. And that's just
the beginning.
Buy When There's Blood Running in the Streets
If anyone tells you that crisis investing is easy, they're lying.
It's not. It's extremely dangerous. Most investors who try to buy
in distressed foreign markets or time their investments in
volatile domestic stocks end up getting slaughtered. They do so
without really knowing what to buy, when to buy it, and how long
to hold it.
Fortunately, the Strategic Investment team includes some of the
most experienced short sellers, contrarians, and successful
foreign investors in the world. For example, David Tice of the
Prudent Bear is on my team. David's Prudent Bear Fund (BEARX) is
up 75% in the last 12 months, compared with a 23% decline on the
S&P. His monthly column is a regular must-read for anyone who
wants to know what the next Tyco, WorldCom or Enron will be.
Marc Faber also contributes his valuable insights to Strategic
Investment. Marc is regularly quoted in Barron's, The Wall Street
Journal - even Money Magazine. His historical understanding of
the market is unmatched. Strategic Investment could have seen a
45% gain in AngloGold in the last 12 months, as much as 86% in
Gazprom (the giant Russian natural gas company), and 48% from TLK
(an Indonesian telecom)...simply by following Marc's advice
Also on the team are your favorite daily scribblers, Bill Bonner
and Eric Fry. And Dan Denning. You may remember Dan from his
commentary in The Daily Reckoning...or from an earlier investment
advisory service. His focus on little-known small-cap stocks led
investors to profits as high as 5,182%...as well as over 570% on
Isle of Capri Casinos, 457% on Big Entertainment, 411% on Gentner
Communications and 130% on Total Research Corporation.
Today, Denning is the architect of Strategic's winning portfolio,
holding up strong in the bear while Wall Street's finest take it
on the chin.
Of course, I'm not promising you that these guys are geniuses -
or that their forecasts always come out right. They've been
investing too long to be arrogant. Modesty is a much better tool
when dealing with financial markets - especially in a market like
this.
But I can promise you will get real solutions to real problems.
And the opportunity to make money...
For example, as the past weeks have shown, bear market rallies
can be powerful and seductive. The most profitable strategy you
can employ in a market like this is being systematically short
the most overvalued indexes.
Under careful direction of the Strategic team, you could have
employed a low-risk strategy to hedge against a falling stock
market. The strategy doesn't expose you to the risk of getting
caught in a "short squeeze" - as is common with stocks during a
violent bear market rally.
The same strategy allowed those readers I quoted at the beginning
of this letter to make a lot of money quickly... in a falling
market. When you subscribe to Strategic Investment you'll get the
latest put recommendation on the Dow - for free. Click here for
details:
agora-inc.com
Cheers,
Addison Wiggin
The Daily Reckoning
P.S. New subscribers will also be immediately provided with an
entire library of useful investment advice. Included in your free
reports when you sign up are:
* Rest Easy in Market Turmoil and Still Make 30% or More. See how
select closed-end mutual funds can provide you with a hedge
against the falling dollar, tax-free income and regular dividends
in a falling market.
* Popular Stocks To Avoid Like the Plague, or You Can Short Them
For Big Gains (Just Updated!). Our latest version of this report
lists 20 popular stocks vulnerable to accounting fraud, the
housing bubble, and a drop-off in consumer spending. We just put
it out two weeks ago and already one of the stocks on the list,
Best Buy, fell more than 36% in ONE DAY as our prediction came
true.
* Get Rich With These Cash Heavy Survivors - the very best
cash-rich companies which can survive a bear market and still
deliver you solid gains. There aren't a lot of them - but the
ones on this list are keepers!
Don't let these vicious market rallies suck you back in...and
don't let them get you down. The best defense is a strong
offense. And that's exactly what you get from Strategic
Investment, click here:
agora-inc.com
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