Looking at an Oftentimes Forgotten Trading Pattern

As a technical trader, I spend a good amount of time looking for repetitive patterns that re-occur over and over and over again. With the help of data-crunching software, anyone can easily write a few scripts and perform their own analysis to find highly repetitive setups.  

When it comes to repetitive patterns, we often talk about chart patterns such as breakout confirmation, bullish and bearish reversal pivots, and continuation patterns that occur frequently with a high degree of accuracy.  However, we often overlook ONE type of highly repetitive pattern that occurs every year.

This pattern is very easy to trade.  

It is not s-e-x-y, which is why I consider it “The Forgotten Pattern”, but it works!

~Seasonality Patterns~

Seasonality is simply a period of time when an asset (i.e., stock) tends to move in the same direction every year. That’s it!  So, if XYZ stock moved up from November 2 to November 22 over 17 of the past 20 years, the assumption is that it is also likely to move up this year as well. 

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Ed Rempel Org

What is The Cash Flow Dam?

What Is The Cash Dam and How Does It Work?

 The Cash Dam (sometimes referred to as a “cash flow dam”) is a simple but powerful concept, and it’s an especially attractive option for those who are familiar with the Smith Manoeuvre or other tax minimization strategies. Cash Dam can help you with tax optimization if you have a mortgage and own either a small business or a rental property.

What is cash damming?

 The Cash Dam allows the owner of a small business or rental property to more quickly pay down their non-deductible mortgage on their home. It’s a variation on the Smith Manoeuvre, but without additional investing. The Cash Dam is essentially an expedient way to change bad debt into good debt.

For someone who’s using the Cash Dam, what it involves is using a line of credit to pay for business expenses. Then, while using the increased business cash flow, you pay down a non-deductible mortgage or loan. This, in turn, produces an increasing tax-deductible business loan, while paying down a non-deductible mortgage or loan. Be advised that the Cash Dam as described above will only work for those who own a non-incorporated personal or partnership-based small business or a rental property.

Example:

 If you own a small non-incorporated business that has $2,000 in expenses each month and you also have a readvanceable mortgage, then the $2,000 per month expense would be paid by the home equity line of credit (HELOC). You then use the additional $2,000 you have in your business expense account to make a payment on your non-deductible mortgage. Interest paid on money that’s borrowed for business expenses is tax-deductible; by using the Cash Dam, you’ll be left with a tax-deductible business loan and a non-deductible mortgage that’s been quickly paid down.

One of the keys to the Cash Dam, however, is capitalizing the interest on the business line of credit. That way, you avoid using any of your own cash flow and you keep the business line of credit tax-deductible.

How does the Cash Dam differ from the Smith Manoeuvre?

The Cash Dam relies on using a tax-deductible business loan to allow you to pay down a non-deductible debt, while the Smith Manoeuvre allows you to buy investments. Investing from your credit line is why the Smith Manoeuvre has much higher risk and return than the Cash Dam.

Potential applications

 Say that you’re a rental investor, instead of using your own cash flow to pay for rental-related expenses, you can use the Cash Dam and a line of credit. In this instance, using the Cash Dam would help you pay for your personal mortgage and help you satisfy your tax obligations as well.

And if you are a small business owner, the Cash Dam can be extremely advantageous. The strategy gives you a way to quickly pay down your non-deductible mortgage and convert that debt into a tax-deductible business loan.

Investment Opportunities – Why is Regenerating Urban Centres Crucial?

Worldwide, the most important element for renewing declining urban areas is investment participation by the private sector, according to a World Bank and Public and Private Infrastructure Advisory Service (PPIAF) report at the World Cities Summit, in Singapore, last year.

Projects focused on urban regeneration seldom receive public sector funding exclusively. According to investment experts Maritime Capital. It requires substantial financial resources, and most cities do not have these funds. The participation of private investors is crucial to determine if a regeneration scheme will work; that is, if it will create urban areas which provide for citizens’ needs in terms of living, working and thriving as individuals.

Why urban regeneration is necessary

In every city, there are pockets of underutilised or urban areas in crisis, most of the time as a consequence of changes in development of urban growth. Countries which are developing are responsible for 90 per cent of urban population growth on a worldwide scale, and declining urban centres are home to citizens suffering from rising poverty and vulnerability. Such areas have a tendency to marginalise and exclude citizens, and can lead to long-term adverse consequences in terms of social and economic upward mobility of such persons.

Success stories signpost the way

The report reviews the regeneration schemes of eight cities around the world – Ahmedabad, Buenos Aires, Johannesburg, Santiago, Singapore, Seoul, Shanghai, and the city of Washington – and documents the path that these have had to travel to face the main challenges in this area.

Drawing on actual, cases of cities in different regions of the world, a review of various projects for urban centres, former industrial or commercial sites, ports, coastal and historic neighbourhoods is presented. Although the cases studied vary in many respects, they have in common an important factor; the participation of the private sector in the regeneration and rehabilitation of deteriorated urban areas.

The report highlights the policy and financial instruments that were successful in each case study, and highlights the problems and challenges faced by each city during their transformation. Four distinct stages are identified for successful schemes involving urban regeneration: scope determination, planning, funding and implementation. Each of these phases involves a set of specific mechanisms that can be used by local governments to develop a systematic design for successful regeneration projects.

City-specific solutions are key

However, when it comes to finding solutions for declining urban areas, there exists no single solution. The report also emphasised that with strong political leadership, any city can initiate a process of urban regeneration, and that the successful utilisation of financial instruments and land management depends on the existence of adequate zoning as well as appropriate property tax systems, and that such systems are properly implemented.

No city is the same as another and, as a response, the World Bank has developed an online tool that focuses on city-specific problems, and its current economic and regulatory circumstances, to assist in decision making. Local governments can access the online resources presented in the report to begin to address the process of economic, social and physical deterioration of urban areas, promoting the sustainable and inclusive future urban development.

The involvement of private sector investment in the regeneration of urban areas is essential, and actively encouraged. It is beneficial for governments, citizens, and individual investors.  If you are interested in investing in urban renewal projects, consult expert advisers in the field to fully understand the opportunities and risks before making your final investment decision.

Colored Diamond Auctions in the Last Year Show Market Growth

Over the last fifteen years, fancy colored diamonds have become more popular as an investment vehicle and have exhibited higher profit margins over time than other hard assets. As noted in this recent Wall Street Journal article, a wealth report by Knight Frank, a property broker in London, stated that the prices of colored diamonds have risen by 122% over the last decade. And in just the last year, there have been a number of auctions of colored diamonds that provided clear indications of continued market growth.

At the beginning of April this year, the Pink Star, a 59.60-carat fancy vivid pink diamond mined by De Beers in South Africa in 1999, was purchased for $71.2 million at a Sotheby’s Hong Kong auction by Hong Kong-based jewelry retailer Chow Tai Fook. The chairman of Chow Tai Fook, Dr. Henry Cheng Kar-Shun, phoned in the bid for the stone, which was sold five minutes into bidding.

Later in the same month, a 5.26-carat fancy purplish pink diamond was up for auction at Christie’s New York. The colored diamond was set in a platinum ring and flanked by tapered-cut diamonds. The ring sold for $1.9 million.

In May, a pair of mismatched earrings, containing fancy colored diamonds–one blue and one pink–sold for more than $57.4 million. The 14.54-carat Artemis Blue, which is an internally flawless fancy vivid blue diamond and the largest one of its type ever to be offered at auction, sold for more than $42.08 million. The 16-carat Artemis Pink, a fancy intense pink diamond, sold for more than $15.3 million.

Meanwhile, an extremely rare 2.11-carat fancy red diamond, dubbed the Argyle Everglow, was shown by the mining company Rio Tinto in July. In an article on CNN, Tobias Kormind, the managing director of 77Diamonds.com, estimated that the stone would sell for more than $10 million. Rio Tinto does not report on the amount of winning bids, but bidding closed in mid-October 2017.

In London this September, at Bonhams Fine Jewellry sale, a fancy intense blue diamond that had been held privately for almost 30 years sold for $3.6 million. The pear-shaped diamond is 4.03 carats.

The Raj Pink, which is the world’s largest known fancy intense pink diamond at 37.30 carats, will be on sale in mid-November at the Magnificent Jewels and Noble Jewels sale in Geneva. The Raj Pink has a clarity grade of VS1 and is mounted on a platinum ring. The estimate for the sale of the Raj Pink is $19.7 million to $29.7 million.

Finally, later this fall, an enormous fancy vivid pink diamond, named the Pink Promise, will be auctioned at Christie’s in Hong Kong, with a price of $42 million. The Pink Promise weighs 14.93 carats and is set in a diamond-studded ring.

With various mining companies, like Rio Tinto, set to close some of their mines in the near future, the scarcity of fancy colored diamonds could increase, in addition to their value.

MONEY News

MONEY News: Mergers and Acquisitions- AT&T and Time Warner Inc.

AT&T’s Stock Could Be a Great Bargain for Investors

AT&T Inc. (NYSE:T) reached a new 52-week low on Tuesday as the company released its third-quarter earnings which failed to impress investors. AT&T’s revenue of $39.67 billion fell short of the $40.10 billion that was expected. Year-over-year, sales were down 3% as the company saw a decline in its legacy wireline services as well as its consumer mobility segment. Earnings per share of $0.74 also fell short of estimates, just narrowly missing the $0.75 that was expected by analysts.

AT&T also add less wireless customers than was expected, although their postpaid churn rate of 0.84% was well below the 1.08% estimated by analysts.

Despite a soft quarter, AT&T did not adjust down its guidance for 2017.

The stock was only down 1% on the disappointing results, but this is because earlier in the month AT&T’s stock declined 6% when the company sent out a warning stating that it was going to show a net loss of 90,000 video subscribers in the coming quarter.

Had the company not sent out that warning, we likely would have seen more of a decline in the share price. However, there is reason for optimism with the company still working on closing its acquisition of Time Warner Inc (NYSE:TWX), which will further expand its offerings and solidify a stronger grip on the market.

With a dividend of 5.6% and a price to earnings multiple of just 16, AT&T might be a great buy coming off a poorer than expected earnings result. Over the long term the future should present plenty of opportunities for growth that will more than offset any short-term struggles.

Robo Advisors and Their Impact on the Investment Landscape

For years, Canadian investors and others around the world have relied on traditional practices for gauging market sentiment, placing trades, building financial portfolios. For many of us, it is disheartening to deal with financial gobbledygook such as investment terminology, financial advice, or simply waiting for a consultant to process transactions. That’s where Robo advisors come into the picture. This dynamic, interactive, and AI-based algorithm is smart enough to simplify the most complex trading and investment transactions.

The financial landscape is undergoing tectonic shifts, and Robo advisors are leading the charge. Otherwise known as Robos, these technology-based systems offer feasible financial solutions for quick and easy access to the Canadian markets. Based on the available technology, it is possible to spend just 600 seconds per month to implement and integrate Robo technology into your trading activity. For young folks, Robo advisors offer great value when compared to traditional investment gurus. They are available at a mere fraction of the cost, and they always prioritize their clientele, 24/7.

Humans Don’t Pick Your Stocks

A cursory description of a Robo advisor will not do justice to the high-quality range of services these technological marvels provide. Before describing what Robo advisors are, it’s important to highlight what they are not: They are not automated mechanisms that do not personalize their services to their clients. For starters, Robo advisors are not robots at all.

The only ‘Robo’ aspect of their functionality is that human beings are not tasked with selecting stocks for your portfolio. This is a good thing since it means that bias will be avoided, and only the best performing stocks based on your preferences will be selected. If human beings – financial advisors, investment gurus, financial analyst etc. – were so good at picking stocks and investments, there would be millions of millionaires running around.

Unfortunately, only a handful of folks can lay claim to that prestigious reality. It is far more beneficial to avoid the human element when selecting stocks. But here’s where things get a little more complicated: Robo advisors are not humans, but they are operated by humans. All your interactions through the Robo advisor take place through human engagement channels such as email, telephone, Skype etc. For the most part, it’s unnecessary to have the human interactive component with Robo advisors, but it’s available if you need it.

And since these Robo advisors are not entirely autonomic, cold, and clinical gadgets/devices, there has to be a degree of warmth and human emotion involved in their functioning. Human beings are reluctant to do anything detrimental to their nest egg, and entrusting their hard-earned money to a cold robot is disingenuous. Robo advisors are also strictly regulated in Canada, and they are just as safe and secure as the bricks and mortar investment brokerages and the people who populate them.

The Best Robo Advisors in Canada

It’s always challenging labeling companies with superlatives. However, time-tested techniques for evaluating the quality of a company’s products and services wins out in the end. For example, user reviews, sign-ups, brand presence, and the ubiquity of a company’s market share are telltale signs of its success in the industry. In Canada, one of the premier Robo advisors is Wealthsimple.

 

An in-depth Wealthsimple review by Young and Thrifty confirms precisely what key market participants already know: Robo advisors are the way of the future, available now. This company owns the title of the largest Robo advisor in Canada, and clients can get by with a $0 minimum. Canadian traders can easily register for an investment account with this mobile app, and fractional shares investing is also available. Other features of this Robo advisor include the following:

  • Statements, current balances, details of buy/sell orders, capital gains, deposits/withdrawals etc.
  • Automatic reinvestments of dividend income
  • User-friendly interface and socially responsible investing practices

The company offers exchange traded funds across the spectrum, including Global stocks, Canadian stocks, emerging market economy stocks, clean energy stocks, fixed income exposure through Canadian government bonds and so forth. The cost for a basic account valued up to $100,000 is 0.5%, including all transfer fees, trading costs and account fees. Once the account value increases beyond $100,000, the fee reduces to 0.4% and other benefits are available to traders. Various accounts include corporate, lira, joint, RRIF, personal accounts, RRSP, and TFSA accounts.

What to expect from the Forex market?

When traders are trading in Forex market, they think that they cannot make money if the market is not going to trade in their favor. It is right that when the market is not going in their favor, traders may lose their money in Forex. If you think that you are going to trade in the market and make some money, you are right. Most traders do not expect to make small money as it is the most significant markets in the world. If you look at the volume of money that is being traded in Forex, you will see that the most significant stock markets like the Tokyo stock exchange and the Shanghai stock exchange are tiny. Traders believe they can make more money because they think all this money are going into the trader’s pocket.

If you expect really from Forex that you want to make money, you will have to know where the money is flowing in Forex. You also need to understand how professional traders expect. You can find all of your answers in this article.

Expect that you will lose

Do not expect that you are going to be productive like the CEO of Amazon. You are going to need a lot of trading before you make your first money. Most traders think they can make money if they place many trades. They also believe if they spend time in this market, they can make money in Forex. You are not going to make money if you do not work hard. Losing is one way to start your trading in Forex. You will lose some money and also make money.

Do not overdo your trading

Many trades overtrade their trading in Forex. They begin to see Forex market as a casual market, and they place many trades at the same time. When the market trend is not going in their favor, they pull out their trades off the market and make a loss. Do not be like them. You have to know that overtrading will not make money. You can make money by placing trades which are good and go with the market trend. The reason that many people lose their money in Forex they place many trades. You do not know if the pattern is going in your favor. Trade the market and place trades to make money in Forex. But make sure that you are not taking too much risk in your online trading account as it might even cause enormous loss.

Don’t expect big winners

Many traders often think that trading is the perfect profession to get rich within a short period. But if you do so online research then you will never find a single trader who has mastered the art of trading within a few months. Every single one of them has spent more than years only to learn the necessary trading skills. You need to think this profession as your business. Every single company needs a strategic plan to execute its standard functions. Similarly, as a currency trader, you need to develop a robust trading strategy so that you can easily trade the extremely volatile nature of this market.

Though we have many different trading yet, you should develop your system based on your trading knowledge. Try to incorporate price action trading system with your trading system since it will significantly improve your winning edge. Those who are trading the Forex market for an extended period always trade the critical support using the reliable candlestick pattern. It’s true that you can also trade the market with other trading system but when it comes to price action trading, everything becomes extremely simple. But always remember the importance of fundamental analysis. If you trade this market based on technical skills only then you are going to have a tough time in near future. Developed a balanced trading system based on the technical and fundamental analysis.

Ed Rempel Org

Ed Rempel – Not Sold on ETF’s and Index Funds

Why I Won’t Own an Index Fund or ETF

 Skilled Fund Managers

Many investors are skeptical that there exist fund managers who have skill and who can beat the index over the long-term. Other investors believe that there are fund managers who have skill, but that it’s impossible to identify them ahead of time.

There are skilled fund managers that can be identified ahead of time. I know quite a few of them. You just have to look using the right criteria.

Identifying Skill

When looking at funds, many investors take an objective approach and study recent returns, look at ratings or statistics, or try to forecast which sectors will perform well.

Other kinds of skill evaluations are more subjective and rely on insider judgments, e.g., doctors assessing other doctors, or even actors judging performances of their peers.

The evaluation of a fund manager falls somewhere in between those two approaches, the objective and the subjective. I believe that, to find the best fund managers, you have to study them, not the fund.

Start by finding fund managers that have beaten their index over their career or long periods of time. This could be in more than one fund. They do not need to beat the index every year – just over time. Then study them to find out how they do it. Is it because of stock-picking skill?

Outperforming the appropriate indexes is just one factor in the criteria. Top fund managers are usually not trying to secretly follow the index–they’re more likely to have an effective style (like value investing), and have high “active share,” which means that they’re investing in a way that differs from the index; they also often have great experience and have their own money invested in the funds that they manage, i.e. “skin in the game”.

My All-Star Fund Managers

One of my special skills is identifying all-star fund managers — it’s essentially my main focus related to investments. I’ve found around 50 fund managers over the years who I would characterize as having superior skill, and all of them have beaten their index over long periods of time.

Most of those 50 managers are on my “watch list”. I own only a handful of those funds. Although I’m resistant to the idea of sharing statistics about my own personal investments, mostly because my investment style may not be suitable for every investor, I want to emphasize that it’s possible to identify skilled fund managers early and ahead of time.

Why I Will Never Own an ETF or Index Fund

I won’t ever own an ETF or an index fund because I’m not happy with below-index returns. I choose investments based on the fund managers–I want to invest with the Albert Einstein of investors, the absolute best. ETFs and index funds don’t have fund managers, so I’m not interested. The goal of investing is to obtain the highest long-term return after fees, and a skilled fund manager provides enough value to pay for those fees and more.

Above-Index Returns

There are really two options when you’re pursuing above-index returns: one, you can find yourself an all-star fund manager, or, second, you can choose a portfolio manager who’s paid by performance fee. When portfolio managers are paid by performance fee, they’re motivated to beat their index. If they don’t beat the index, the fees are similar to ETFs. If they do beat the index, the fee pays for itself.

Getting above-index returns is all about finding skill.

Allergen Stock Falls 0.39% Over Patent Deal with Native American Tribe

Allergen (AGN) stock is down over 0.39% to close on Wednesday after lawmakers take aim at the company over a patent deal they made with a Native American tribe. The pharmaceutical company struck a deal with Saint Regis Mohawk Tribe in September.

The patent deal would transfer Allergen’s patent for Restasis, an eye drug, to the Native American tribe.

Lawmakers state that the deal is an attempt to leverage the advantages that tribes have with patent challenges. Sovereign immunity allows the tribe to maintain exclusive rights to the drug through 2024, shielding the company from generic competition.

Allergen – known for their Botox drug that is used for anti-aging purposes, hyperhidrosis, muscle stiffness, spasms, eye disorders, wrinkles and uncontrolled blinking – is accused of using the workaround to protect the drug from competition.

The company’s September press release states that it entered into a “sophisticated” opportunity. The deal, transferring the patent rights to the tribe, allows the company to protect 15% of their profits.

Botox helped the pharma company boost their revenue by 10% annually, offsetting the falling revenue of older drugs the company offers. Botox is also under pressure as alternative medicines, and treatments, like iontophoresis, continue to threaten the company’s blockbuster product.

Restasis accounts for $1.5 billion of the company’s sales. St. Regis’ deal allows the tribe to receive up to $15 million per year in royalties and a $13.75 million payment. Tribes, along with universities, have patent protection.

The tribe said that the deal was a way for them to diversify their income.

“We realize that we cannot depend solely on casino revenues and, in order for us to be self-reliant, we must enter into diverse business sectors to address the chronically unmet needs of the Akwesasne community; such as housing, employment, education, healthcare, cultural and language preservation,” states the tribe’s council.

Legal professionals and lawmakers state that anyone who cares about drug prices should be worried about the deal.

Allergen’s move will keep generic drugs from reaching the market, allowing the company to maintain no competition. The drug’s prices will remain unrivaled by competition.

The Hatch-Waxman Act, enacted in 1984, allows generic competition to enter the market faster. The generic version of drugs will go through FDA approval faster. Allergen’s attempt to safeguard their patents will keep the drug’s prices higher by keeping competition stagnant.

The Act allows the original drug maker, in this case Allergen, to be able to have exclusive rights to their drugs for a specified period of time. This right is an attempt to help manufacturers recuperate their research and development costs.

Generic drug makers can challenge these limits, not set in stone, and force companies to allow generic versions of their product on the market.

Tribes and universities are immune to these challenges, allowing Allergen to keep generics out of the market for an additional four years. Allergen is in the middle of a federal patent trial.

The judge ordered the company to file briefs by October 13 “addressing the question whether the Tribe should be joined as a co-plaintiff in this action, or whether the assignment of the patents to the Tribe should be disregarded as a sham.”