Up 400+ ES Points for 2013

I made over 400+ ES points this year!! I made close to 100 points per month swing trading ES... They were times I was stucked 12x in a horrible position but everytime the market always cost average me out!

This method works but is very painful to hold for weeks or months. My longest hold  was 2 months. I bet 100% return per 100 es points I make per contract!!

10 Surprises for 2014

10 Surprises for 2014

December 31, 2013

BROAD MARKET

The world market has 2 models for 2014.

Model 1:

The new fed Yellen will continue to keep printing money. The bank of japan continues to print money. The whole world continue to print money. Stimulus has been good for the world markets. Every market is up in 2013 due to all this easy money lining the wealthy pockets. I think we are beginning to continue this Bull market into 2014, normally bull markets last 6 years so from 2008 low to 2014-2015 will be the end of the 6 year cycle. The question is will this bull market continue longer and I may just as well do that. The headwinds for 2013 really didn't affect the markets for a long period of time.

As you can see all dips were bought this year. I made allot of money buying calls. The puts were very difficult to scale into.  I think this year I called 3 of the major lows this year. I am very proud of my trading with over 600% on options and another 400% on futures.

I still don't think we are in a bubble yet, certain sectors such as Solars, 3D printers and Technologies(TWTR, FB, PCLN) are bubbles. We need more broader sector bubbles before the market crashes.

In 2014, we may slowly start rising. I see a nearly quarter selloff to maybe 1700 for a rest. I am trying to not boldly call tops because the trend is your friend and hurts trying to be a hero. Companies are doing well, lots of cash on the books, unemployment has been dropping, housing is coming back this is all the underbelly to a nice year where opportunities become narrow and the broad indexes stable out until the next bad news events change the bull trend. S&P could hit 1950-2000.

Inflation, cheap money, growing population, industrial expansion in emerging markets, and the capitalist mindset continue to increase the values of everything under the sun by nature. This is how the world has worked for the past 400 years. P/Es should continue to expand as well as trade and budget deficits

I continue to be a bull for the next 20 years.

Model 2:

Sometime in 2014, The two headwinds I see is the FED and Geo-Political news. The fed taper's and stop the bond buying program. Interest rates move higher, I still don't think interests going from 0-5% will have a major effect on asset valuations. I think when we cross 4-5% that is when it hurts the economy.  The higher rates have a negative affect on equities and we have a massive haircut (-20%). Investors may also flee to Bonds for fixed income and we finally go back to a market where everybody is playing in different ponds. Right now everyone is playing in Equities because nothing else pays better in annual returns. The fed leaving the Treasury market WILL affect the whole markets and everything WILL selloff. We have had a none stop rally since March 2008, stopping the fuel will effect markets big time.

There could be some bad news that could come from abroad and quickly affect earnings projections. It could be oil related, financial or war related. As investors we cannot predict these black swan events so its foolish to try to quantify them.

I think we could get one major flush in 2014. Its more possible now than in 2013 but to predict where markets will end I have no clue. We are sitting on multi-year highs and the cheap sales are long gone now. I rather sit on the sidelines and wait.

10 Surprises of 2014

Surprise No 1: Apple’s next product

Sometime in 2014, AAPL may begin to get its act together. It is still a great company but shrinking margins and higher competition is really hurting AAPL's bottom line. The company needs to make a game changer product, possible a competitor to GOOGLE's Glass. The company lost its CEO so it needs to revamp the cult following by doing some type of spectacle. 

The company may launch the I-Watch, and I-Glasses. The company may not be able to out compete Samsung who has done an amazing job at its products.

AAPL is still in big trouble as far as I see it for now.  The prices may stay in this range all year next year.

Surprise No 2: TSLA continues higher

Tesla has done well this year but the company is trading too high and growing too fast. The stock took a beating late this year after 3 cars caught on fire. But the stock is still up allot of points. I still think the company will do well in 2014, they will sell more cars and this will continue the stock price higher. It may get a nice flush out before the next big wave up sometime in 2014. The electric car is here to stay and the industry is still very young. Upside targets 300+

This is also good for F, GM as well who are working hard to deploy electric cars to the retail public.

Surprise No 3: GOOGLE Glass

The google glass should be launched this year and it will be a game changer. The tablets will be replaced by the GOOGLE Glass. It is the next evolutionary shift in mobile computing. The project will be a major success for google and I think it may push GOOGLE even higher. The company is doing well, and is in the position to do well for many years to come. The company has become a conglomerate of technologies. 

This is a very good company. The company should approach 1500 now.

The only risk I see to GOOGLE is the advertisement revenue begin to dwindle again and the earnings projections change.

Surprise No 4: 3D Printing industry grows, stocks should crash

The industry will grow in 2014. I still am not sure all these stocks will follow the industry growth. I think many of these companies are bubbles that are trading to insane P/Es. These companies have no earnings and is built on hype. This generally never ends good for stocks like these. I still think the industry will grow and a standard must be developed for retail 3-D printers. Currently no standards exist and its the wild wild west in 3D printing technologies.

Its great technology, I am a bull on the industry but a bear on the stocks

Surprise No 5: Exon Mobile should continue higher

Now I said that oil may be going into a bear market last year but what I am seeing is the local US production on OIL has made us totally independent to oil already. We have so much new oil coming out the ground the story for oil will last allot longer than the alternatives.

Oil will be around for another 30 years and this is why I think XOM will be the leader. XOM is a great company originally owned by Mr. Rockefeller. I was on the last conference call and learned that XOM has over 20+ wells in development all over the world. If you add up all the revenue found in the new wells you can say the company is on a good path to grow. 

With all the local wells found in the USA in places such as the Baken and other wells, you can safely say that XOM will do well in the next 10+ years if they double there production. This will also double the company in size and is great for value investors. 

XOM has always been a leader for premium gasoline and I suspect that it will continue being a leader next 30 years. Maybe this is why buffet bought 5 Billion worth near high of year ($86.42 - $95.2) average $90.22

When oil is the core to the modern world, it will always be in demand for years to come. So picking the best horse for the next 30 years out is a safe bet that the bet is correct. Oil is used in heating, cars, plastics, toys, housing products. It is essential to life. XOM is also producing Natural gas products as well.

Surprise No 6: Natural gas grows in demand

Recently, America has produced allot of natural gas and we have so much supply it has killed natural gas prices. Storing the natural gas was a problem for years but now we can transport the product to other countries and sell it. 

This means that if we can get cars, more homes and other uses for the energy it will also help our reliance on oil. 2014 may be the first year where the demand starts to eat into the massive supply we have in the USA that will help cause prices to rise for the commodity.

Surprise No 7: Housing picks up

 

In 2014, the housing market will pick up and prices will begin to rise. Also production for contractors, building materials and all other related jobs may increase as well. This bodes well for unemployment because many jobs in the economy are construction related.

Soft areas may begin price appreciation, and places like New York will go on fire. The only risk to housing recovery is loan issues with banks, higher credit standards and stability of the economy.

Surprise No 8: Social Networking the Bubble

 

I continue to be a bear on social networking. I think the whole industry is a bubble that is waiting to be popped. The hype of sending messages and posting things is heavily leveraged for advertisers. I still think FB and TWTR are bubbles. I was dead wrong on GOOG for years thinking it was a bubble. It may still be, but they have moved away from just advertisements to make money. 

This social networking fad will fade as teens grow sick of these silly tools. Online advertisement may be growing but I see it as a bubble continue to expand until one day all these online ad related companies get destroyed by a massive re-evaluation. 

Online impressions has a flaw. The fundamental flaw will creep up and hurt many people one day. Mark my words!

Surprise No 9: Market Enthusiasm

 

Emotion will trump logic as investors trade momentary comfort for long-term security. I think the markets will continue to trade form a short term perspective. Things will move faster and faster due to Weekly Options. We will also have some nice moves in 2014 on both sides. 

I think eventually allot of people will get hurt on any major reversals in the economy because many of the money on the sidelines will eventually be too late buying at these current levels. The people buying on the highs will be the ones who get crushed first.

Surprise No 10: Bitcoin Grows stronger

 

I think even thou FIAT currencies are blowing up due to Fed printing all over the world the need for an alternative FOREX currency may take hold. This new currency is very similar to GOLD, or a minor pair currency. I think the need for a global currency that is not controlled by governments may be the biggest threat to all industrialized nations. The general population are tired of massive government debt, runaway spending and would support something that has better stability. 

Now bitcoin is a baby currency and must first be more popular in circulation before it actually become something that has legs.  Currently its all speculation and that is very dangerous.  If more exchanges are built and you can actually trade it on the FOREX market it may turn into something as a world alternative.   We need more products and services using the coins, allot more liquidity and less volitility for Bitcoin to grow. I think in 2014 it will continue to grow but will it survive the long hall, I have no clue!

 

10 Surprises of 2013 RECAP (What I said in 2013:):

Surprise No 1: Apple’s next product

Apple (AAPL) computer unveils apple TV and it tremendously adds to the stock’s valuation. I think this year selloff in apple was a good chance to buy apple for cheap. I still think apple will continue its ramp to the $700+ target. If model two occurs apple will easily hit $750->$800 per share. They are some concerns on apple’s future earnings stability but I still think we have one more year of Mobile growth in Smart phones, Tablets and Smart TVs. If America bounces back, the technology sector will continue to outperform the broad market. Apple is directly connected to the consumer and retail so it’s tied directly to the recovery.

 

Result: I was DEAD wrong. AAPL has been a wet dog. The stock did nothing but I was able to call the sell-off early on this year and made allot of money from the disappointments of the company.

Surprise No 2: Google’s new game changer

Google (GOOG) unveils its Project Glass and it revolutionizes the mobile world. Soon Samsung, Apple and Microsoft will unveil a similar product. This will be a game changer for mobile connectivity and the next generation for mobile platforms. This will tremendously give Google the edge and its stock will head to new highs. I still think Google will hit $800->$900 soon as these new technologies will continue to make the company a strong beast. Now many argue that the profit margins on Add impressions are dwindling and the company may have some head winds ahead. I feel this may be somewhat true but the industry and the market is so big they should continue to do fine for another year even thou I think the online advertising business model is a speculative bubble.

Result: I was 100% correct. I am still early on my Project Glass call, but my targets were hit because the advertisement revenue and the tablet rave has propelled GOOGLE into an amazing year.
   

Surprise No 3: FB will recover

Facebook (FB) may actually feel the wind of more mobile growth and the stock actually heads higher. The investors who got killed during the IPO are able to recoup losses as the stock heads back to $40 per share. Ultimately, I think Facebook will get there advertising revenue up because they are still the 2^nd most popular website in the world. They should increase earnings revenue and the stock should begin to rally and head to possibly a $100+ per share over the next 2 years. I think the massive sell off in Facebook was a great sale for long term holders. Although I was bearish during the IPO of Facebook I have changed my views because I feel the sector is so hot that even mediocre companies will still do okay for another year. The idea is a rising tide lifts all boats!!

Result:  I was 100% correct 

Surprise No 4: Microsoft makes a bid for RIMM or AMAZON makes a bid for RIMM (Taken from 2011 Surprises)

Microsoft has experienced the lost decade just as the Japanese did because after Bill Gates left the company it was left with a poor creative leader Steve Ballmer. Bill Gates was the creative force behind Microsoft’s major leap in being a market pioneer in the technology sector. In the past 10 years apple came from way behind and took space from Microsoft by dominating the Mobile space. In early 2000 I remember Microsoft was the first in the Mobile space by unleashing Windows CE 1.0 and Pocket PC 1.0. For some odd reason the company did not put much quality in developing the new space properly and Apple came and gobbled it up like a turkey. Microsoft has had major problems transforming there business model to the CLOUD and is desperately trying to find new ways to innovate there business by launching Microsoft Synch, Bing and Windows Phone. The windows phone is way behind and needs population to grow. The only way to catch up with Android and IOS is by acquiring RIMM and there usage space.  If Microsoft does not acquire RIMM some other company will do so in the near future.

Amazon has also made an attempt to buy RIMM because they recently launched 3 versions of their E-book Reader. They need internet connectivity via 3G and 4G LTE and may look to acquire RIMM to help grow there space. RIMM made many mistakes and allow Apple and Android to eat up all there market space in the past decade. Amazon is trying to move into mobile information. The software business is a very turbulent business model.

Result:  I was 50% correct, somebody else made a bid for the company. But still the company was up for sale and the price continued to die which I was calling for years now!


Link:
http://money.cnn.com/2013/09/23/technology/mobile/blackberry-private/

Surprise No 5: AMAZON and online retailers must pay up in Taxes (Taken from 2011 Surprises)

Amazon continues to be the market leader for online shopping and is imposed with an online tax for out of state sales by many other states. The loop hole in online sales tax may begin to become a theme in congress to rebalance the economy local businesses by taxing online business with an internet federal flat tax. This is something online business dread but the internet is not some geek driven specialty product anymore. It is main stream and out of control. Many states will begin to impose taxes on internet commerce to help balance state wide budgets.

Amazon should continue to do well with the creation of their new Amazon Phone that will directly compete with Apple. Amazon is the number one market place for online retail. This gives it a great position in the industry.

Result:  I was 100% correct. They started making everybody pay taxes this year and the stock had a great year.
Link:
http://blogs.wsj.com/digits/2013/11/01/amazon-passes-tax-milestone/

Surprise No 6: Heavy 3D Gaming goes Mobile (Taken from 2011 Surprises)

I see major advances in hardware that online social gaming will become heavy in graphics and power. This may be the beginning of the Mobile 3D gaming world. Sony will possibly release a device for 4G LTE with heavy 3D capabilities as well as Microsoft and Nintendo. Apple and Android will also be the early leaders of this new space. N-Vidia will supply the technology for the graphics processors. The world will now transform from 3D heavy consoles to 3D heavy mobile devices.

I still think that this industry it’s about to blow up and become big in the next 2 years.

Result:  I was 100% correct. The mali hardware by ARM holdings is now in the new tablets.

Link:
http://www.arm.com/products/multimedia/mali-graphics-hardware/mali-400-mp.php

Surprise No 7: Electric cars take charge (Taken from 2011 Surprises)

I see a major bull market setting up for the electric car space. There will be a huge opportunity in the electric car space because we have so many new products coming to the table. The vehicles will be so valuable that auto makers and dealers will do very well in the years to come. These cars will be gobbled up by people who live in the cities. The automakers will struggle to keep up with demand for the electric cars they produce. This will be one of the legs that will help revitalize America in the next 10 years. This space is a huge goldmine. The Nissan Leaf, Chevy Volt and Toyota Prius will be the leaders. 

Result: I was correct but due to more supply of oil found recently in America the change-over to other energy forms has slowed. This means that it will take longer for these new products to become main stream. In 2012 Tesla motors had a pretty good year with the release of its Model-S car.

Result:  I was 100% correct. TSLA is up 300+% this year


Surprise No 8: Person to person mobile credit transactions.

With the invention of the new ways to transfer money via Square and Pay Anywhere for mobile to mobile money transfers I think this will continue to be a big thing for 2013. The user base may double in the next 12 months as more people will rely on credit to pay people and do business. By allowing people to become merchants and consumers at the same time it has allowed more borrowing and credit related charges for products and services. This is created a new market similar to Paypal in 1995 but for mobile computing and with the growth of mobile it should feel the wind of growth from the sector.

Result:  I was 100% correct. It grows
Link:
http://theshazamnetworkblog.typepad.com/the-shazam-network-blog/2013/07/growth-of-mobile-payment-transactions-and-person-to-person-payments-expected-to-continue.html

Surprise No 9: Ford does well

As ford borrowed special loans from the fed helped the company to grow its way out of bankruptcy. By having an all star CEO who has certainly showed he can lead a dying company back to life has given Ford great prospects for 2013. This stock may continue its way back up to $20 per share over the next 12 months. The auto industry is growing and US automakers have finally gotten their act together by actually competing using technology in their products against the Japanese and German automakers.

Result:  I was 75% correct. It grows from 13-17. It still did not hit $20 per share

Surprise No 10: The airlines may rally as a long shot

I think the airlines have been beaten down so bad over the years we may get a nice rally in this sour sector for over 2 decades. The reason this sector has lagged and never resulted in a profit is because of high fuel costs curbed profit margins.  I think that with the recent discover of oil in the US we may actually see lower oil prices in the near future. We may also get some more consolidation in this industry. I think that if energy prices drop it will be good for this high risk sector.

 Result:  I was 100% correct. The whole industry expanded.

Happy new year and may 2014 be fruitful.

I am up 600% for 2013 on Options trading

I started the year with 100,000 and ended the year with 600,000+. over 600% gain. That is what I am talking about.... First big win was betting on AAPL collapsing after earnings, and I was right, next JNJ and multiple SPY swings!! 2013 I abused the markets!!