A Personal Note From The Editor
I began publishing the Financial
Trend Forecaster newsletter in 1995 upon the death
of James Moore the creator of the Moore Inflation Predictor.
I have continuously published the Moore
Inflation Predictor© every month since.
The Financial
Trend Forecaster specializes in predicting trends and profit
opportunities resulting from trends in Inflation, the Stock Market,
Gold and Bonds. In January of 2003 we created InflationData.com
to specialize in all forms of information about the nature of
Inflation.
Personal Financial Background
At the age of
15, I began investing in the stock market in earnest after reading my grandfather's financial
newsletters. He subscribed to several "Hard Money" newsletters
of the time so I was steeped in an admiration for Gold, and an aversion
for "Public Debt". My grandfather was an old German who
had lived through the hyperinflation days and was a firm believer
in a strong currency, Gold and Swiss Banks.
By the time I graduated from High School, I had invested
my college money in South African gold stocks (long before South
Africa became prominent in the popular press and investing there
became "politically incorrect"). These stocks paid off
handsomely over the next four years and the dividends earned returned
many times the original principal invested. So the dividends paid
for a good education at a private engineering college in New York.
By the time I graduated with a Major in Management and a Minor in
Engineering the value of my stock and my hard money education had
grown greatly.
One Christmas while still in College, I made
my first foray into option trading. I sold some covered call
options against some Canadian gold stocks I owned (in addition to
the South Africans) because I firmly believed the price of Gold
was temporarily headed down. I successfully picked up a few
hundred dollars for Christmas presents that year and was able to
keep my stocks intact.
Over the many years since, I have had many other successes
and a few failures too, but I have always tried to learn from my
mistakes. Anyone who claims to never have had a loss is either
a liar or has never made a trade. The key to investing is to know
your investment, maximize your gains, limit your risk and keep your
losses small.
The day of the crash of 1987 I made several
thousand dollars shorting the market, but my most spectacular success
to date has been in the currency arena. I felt that the Yen had
peaked against the dollar and was about to fall off a cliff.
I "splurged" and bought about $400 worth of put options
on the Yen and put them away.
I didn't watch the market too closely because sometimes
it makes you too jumpy and you "leave too much profit on the
table". In general I knew the Yen was heading down but didn't
follow the day to day fluctuations. I only had $400 to lose so I
just let it ride.
As the options neared expiration I checked on their
price and my meager $400 investment was up a whopping 1500% or now
worth $6000. At first I thought there must be a misprint in
the paper. But after a bit of checking I realized it was correct
so I entered a sell order. The day I sold was the exact top of the
market and somehow I received more than the highest quote in the
paper. According to the "Wall Street Journal" I
should have received a maximum of $7200 and instead my account was
credited almost $10,000!
So in three months, I had made 2,500% and turned $400
into $10,000!!! These options were extremely far "in
the money" and therefore were extremely thinly traded. I assume
someone wanted to close out a position very badly and I probably
couldn't have done the same thing on a large number of contracts.
Another time, in 1991, the Moore
Inflation Predictor© was predicting a major drop
in inflation, so I decided to invest heavily in bonds. Rather than
take a conservative approach and invest in a bond fund (which eventually
made about 24%) I found an individual bond (Unisys) trading at a
steep discount to Par. The computer industry was currently "out
of favor" and Unisys was not doing well financially, but the
company could easily cover the small bond issue out of petty cash.
The bond had a short maturity, so it really was a very low risk
trade. By the end of the year however, Unisys was back in favor,
the bonds were at par and interest rates had fallen like a rock.
So instead of making 24% I had made close to 40% on my money.
Since then I have seen extremely hot markets and market
crashes. In 1997 I began looking for a top in the market and told
my subscribers that the market was taking on the proportions of
a mania. And although the market continued upward for another year
and a half the resulting crash is now history. My philosophy is
to let someone else have the first 10% and the last 10% of any given
rise and I will take my 80% out of the middle.
I have now been actively studying the market for over
33 years. I have read hundreds of investment newsletters and scores
of books. Over the years I have traded Stocks (foreign and domestic),
Bonds, Mutual Funds, Currencies, Options, and Metals. In addition
I have been licensed by the National Association of Securities Dealers
to sell Securities and Mutual Funds. (I received a 92% and a 98%
score on my first try on two exams that many professionals require
two or three tries just to pass.)
I gave up my Securities License because I did not
like what I saw in the Securities Industry. This was in early
1987 and the industry wanted dealers to get their customers to Buy,
Buy, Buy! The market was HOT! I felt it was TOO HOT and customers
should be selling and taking their profit, but the industry wouldn't
let me say that, so I quit.
I have spent the last few years as a licensed
Microsoft Professional learning the skills necessary to computerize
my investment models and developing web publishing skills. All the
while I have been installing computer networks around the
world in exotic places like Ecuador, Thailand, Germany, Kenya, Ivory
Coast, S. Korea, Guatemala, Zimbabwe, Hong Kong, Brazil and
London.
All this traveling has given me a broad perspective on the world.
Throughout this time I have continued to hone my investment skills
and publish Inflation and Investment trend information at Financial
Trend Forecaster. In 2003, we expanded our services to include Inflationdata.com
and YourFamilyFinances.com
Hope you find our information helpful.
Sincerely,
Tim McMahon, Editor
Financial Trend Forecaster
InflationData.com
YourFamilyFinances.com
|
