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The FAANG-nary In The Coal Mine

The long-awaited breakdown in sentiment is finally here
Friday, July 27, 2018, 6:48 PM

Two weeks ago, I issued a report to Peak Prosperity's premium subscribers, warning of an immiment downwards re-pricing of the FAANG stocks. I even made a rare recommendation for taking an active short position against them (one now up 18%).

That report proved quite timely. Over the past 10 days:

  • Netflix (NFLX) is down 10% after issuing disappointing subscriber growth and Q3 guidance
  • Facebook (FB) is down 20% after  delivering lower user and revenue numbers than the Street was expecting
  • Amazon (AMZN) is flat despite posting blowout Q2 EPS, offset by a revenue miss
  • Google/Alphabet (GOOGL) has managed a meager 3% rise, as earnings & revenue beats were tempered by rising costs and a record $5 billion EU anti-trust fine

This sudden weakness among key FAANG members is extremely significant. Much more so than most investors realize. » Read more

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Dreamstime

The Case For Starting To Build A (Small) Short Position

Why I just took on a new short trade in my portfolio
Tuesday, July 10, 2018, 3:01 PM

So, we're in the midst of (yet) another rally in the markets. But this one feels different...

For those sitting on large cash positions, it's increasingly looking like the long-overdue and long-awaiting end to the secular bull market may indeed arrive this year.

There is NOTHING wrong with remaining 100% in cash and simply letting your cash appreciate realtive to stocks/bonds/etc when the correction hits.

But, if you want to have some upside exposure to the correction, now is a good time to consider how much of your portfolio to allocate to that strategy. And what to put it in. And to start putting small positions in place.

Technically, it continues to look like something broke at the start of 2018. The ruler-straight run-up in the major stock indeces seen over the past decade suddenly stopped as the year began. Since then, we've seen more price volatility than in the past several years combined.

And despite the most recent price action, both the Dow and the S&P 500 remain below their all-time-highs set in early January. And while the NADAQ is now higher, there are many reasons to be concerened about its ability to rise much further -- a rationale I'll lay out shortly below.

Technical Red Flags

This latest rally is rising two important red flags.

The first is volume-related. This most recent rally has occured on exceptionally low volume, near the lowest levels seen over the past year.

This indicates that the optimism represented by today's buyers is not widespread across market participants (i.e., there's not a horde of buyers eager to keep pushing prices higher). This hints that the rally may soon run out of steam.

Low volume driving a rising market also suggests fewer buyers willing to step in to defend today's price levels if they start falling.

The second warning sign is that we're seeing Rising Wedge formations appearing in the major equity indices as we see in this chart... » Read more

Insider

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I Just Added To My Short Position

Keeping you updated on my portfolio positioning
Wednesday, August 16, 2017, 2:01 PM

Last year, I detailed out my personal investments in the report How My Portfolio Is Positioned Right Now. It turned out to be one of our most popular articles over the past few years.

In it, I mentioned that I'll do my best to update our subscribers when I make a material change to my portfolio allocation.

Well, I just did. » Read more

Blog

Boosting Our Message

3 easy steps that really do help
Thursday, December 31, 2015, 2:06 PM

Our new book Prosper!: How to Prepare for the Future and Create a World Worth Inheriting has been out for a little over a month now. All in all, it's off to a very good start. » Read more

Insider

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Off The Cuff: Over Our Skis

Why a wipe-out is likely soon
Thursday, December 24, 2015, 6:31 PM

In this week's Off The Cuff podcast, Chris and Mish Shedlock discuss:

  • More & More Bad Data
    • Recent economic metrics are terrible
  • Over Our Skis
    • A return to recession is pretty much baked in the cake for 2016
  • Signs Of A Consumer Slowdown
    • Chris shares some intelligence from Amazon
  • The Big Short
    • A good reminder of the risks we're living under
Blog

Peak Prosperity

Our New Book: Prosper!

The long-awaited sequel to The Crash Course
Friday, October 30, 2015, 7:37 PM

It offers a blueprint for taking control of and improving your destiny. » Read more

Blog

The Siren Song of the Robot

It may not be the boon we're counting on
Tuesday, January 29, 2013, 1:03 PM

The quest for cheap energy and cheap labor is a conquering human urge, one that has played out with notable ferocity starting with the Industrial Revolution. The introduction of coal into British manufacturing and the more recent outsourcing of Western manufacturing to Asia have marked key thresholds in this ongoing progression.

But despite the harvesting of additional productivity gains from the more recent revolution in information technology, the suite of macro data suggests that the rate of advancement in physical production has slowed, notably, in the past thirty years.

Seen in this light, the greatest gains to global industrial production were probably enjoyed from the late 18th century (when coal extraction and use began in earnest) into the mid-20th century (when oil reached broad distribution). In contrast, computers, the Internet, and the leveraging of developing world labor might eventually be seen as the finishing touches on this great industrial wave. » Read more

Daily Prep

Introducing Amazon Supply

A source for tools, materials, and more
Monday, October 22, 2012, 6:48 PM

I recently discovered AmazonSupply.com while looking for parts for my grain mill/exercise bike connection project (pedal-powered grain mill) and I thought it would be good to share the resource.  They have almost anything you can imagine for tools, parts, and supplies (for me it was sprockets).  Great for small business looking to order everyday office products or for parts for DIY home projects. They also have a 365-day return period. 

From the Amazon Supply Website:

AmazonSupply.com is dedicated to serving the needs of a wide range of business customers and consumers. From lab researchers to robot builders to machinists and fabricators to product developers and engineering students, AmazonSupply.com has over 500,000 products to fit their specific needs.

Products sold on AmazonSupply.com include lab and scientific supplies, metalworking tools, measurement and inspection tools, raw materials, fasteners, tubing, power transmission products, janitorial supplies, and occupational health and safety products.

Brands sold on AmazonSupply.com include 3M, Go-Jo, Hanna Instruments, Kimberly-Clark, Kimble, Mitutoyo, Norton, PanaVise, Parker, Sandvik-Coromant, Starrett, WD-40, Wheaton and hundreds more.

Visit Amazon Supply