The Tasgall Group

Ok, so the definition of maudlin is “drunk enough to be emotionally silly”.? Not sure that really applies to John Mauldin but I couldn’t pass up the obvious similarity between the word and his name.? I’m a sucker for puns.? But my general purpose is served to use some sort of adjective with a negative spin.? Do I have negative thoughts about John Mauldin?? The jury is out.? But I wanted to talk about some interesting data collected about his newsletter that does little to shine a positive light on the man’s market opinions.? (more…)

Yes, Virginia, you can time the markets. It begs more careful research but this is an interesting read for the more passive investor. You have to be careful about ever-changing cycles and transaction costs etc. but I like the idea that this is based not just on observed correlations but on a logical explanation for the occurance of this correlation.

I was visiting my commercial mail drop today to collect my mail.? All my mail is sent there and all my accounts show that address as my home address.? Nowhere is my name linked to my home address except in the records of utility companies, something I couldn’t avoid easily (though it is possible).? As I was leaving the maildrop, the proprietor informed me that a Durham County Sheriff had come in looking to serve me with papers.? (more…)

Check out the International Networks Archive, a project at Princeton University attempting to “map” globalization in new and creative ways.? I had particular fun with the Infographics (I thought the indication that the IRS?was the only non-police government agency?authorized to carry a firearm was hilarious) and Interactive Maps sections.? There?is plenty of data and links to data also.? While at first glance this doesn’t jump out as investment-related, I think this project might provide some interesting inspiration or clues that could aid in financial outlooks.

So there is talk of removing some or all tax on gas now that prices are getting high again.? Sounds reasonable enough: lower taxes and gas is magically cheaper.? Assuming for the moment that the US doesn’t rely on this revenue, why should be pay all of this extra money on top of the true value of gasoline?? Simple math states that $3 – $1 = $2.

But for the life of me, I can’t get that answer from my trusty Econo-Calc 3000.? Every time I punch in $3 – $1, I get…$3.? WTF!?? Well, when technology fails, go back to good ol’ pen and paper.? Where’s a good envelope when you need one?? Ah, here’s one.

Scene: Somewhere on the back of an envelope. (more…)

Time to check in with our density theory again.? Today was significant because the S&P 500 reached the top of the value range it has been trading in for a while, pierced it and then faded back down.? So what does the density concept tell us is the most likely event?? Probably a return to the middle of the bell curve that prices have painted recently.? This is around 1256.? The most popular price recently however is more around 1270 and could provide early support or a launching pad if the bulls can win.

What today has done is bring us to an inflection point.? Price has already made many moves back and forth across the face of the bell curve so it may be getting exhausted and need a breakout to new value.? It seems likely that the market will wait for Bernanke first though.? My personal feeling (not worth much) is that a raise is more likely than people think and, even if it isn’t, the pause concept is probably already priced in.? That would lend some credit to the idea that it might return to “center ice” to await the announcement.? I would venture to guess that uncertainty leads to a retreat to old value while certainty leads to a move to new value.? So I’d assign a good probability right now to a move down to 1256 or so.? If it is to do that by the time of the Fed announcement though it would require a pretty quick drop.? That’s why 1270 may be a better catch-all goal and would be perfectly reachable by the FOMC meeting.? Either way, down is the word because old value is currently below the market.

If price does break up to new value, that is probably going to be around 1306.? A break of today’s high would be a pretty bold statement and should mean the bell is finally broken or at least expanding upwards.

Now we can only wait and see…

Well, on Monday I started trading the Uberman’s Portfolio with real money.? The yield is 10.99% at the current leverage.? I made this move after a month of forward trading (24/7 exposure)?and then completing 3 years of backtesting.? They both confirmed the theory that the porfolio does indeed stay tied to the “index” of the interest rate yield.? Random indexes of currencies did not do this.? This has given me the confidence (and data for position sizing) I need to dip my toe in the water.

Hopefully, this will be exactly what I meant about having an approach that allows you to benchmark your performance.?? By knowing that the portfolio is mathmatically driven to “stay in the lines” as best as possible and the road is mapped out ahead of time (the yield), then I have more confidence about the results and what they mean.? If after a year the return is close to the yield and walked the line the whole way, I can be reasonably sure?that the results were not luck but a result of the model at work.? I know that theory by confirmation isn’t the best form of proof, but in trading that may be all we get.

For those who enjoy learning tips about squeezing every last drop out of your net worth growth, this blog, My 1st Million At?33,?is dedicated to that very goal.? Lots of excellent tips and argument/counter-argument dicussions about matters that affect the bottom line.? I like the analytical approach to “gaming” the system of personal finance.? It just so happens that he just posted a summary of his site for newcomers.? Of particular interest was the link on housing but it’s all good stuff.

You’ve probably heard something like this floating around before,

Fed Funds Futures are currently pricing in about a 36% chance for a 25 basis point Fed Funds rate hike next week to 5.5%.

Ever wondered what they mean by that and how they get that number?? Well here is an explanation by the Fed themselves.

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I’ve devised a new test for traders to weed out the losers before even seeing an account statement.? It’s kind of a taste test, so to speak.? Show them two equity curves for a couple of trading systems and have them pick the one they want to trade.? One has a steep upward slope and the other a milder, upward slope.? Otherwise they look the same with about equal volatility etc.? It’s a simple choice between more profit and less.? The secret is that the system with more profit is actually the result of a random buy-sell rule that was selected for its pretty chart.? The other, less fruitful?curve?is the result of a planned system that attempts to index to a benchmark and was successful in doing so.? In other words, one curve was most certainly luck and the other was most likely not.

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