Dan Amoss, CFA, is managing editor for Strategic Investment and a contributing editor for Whiskey and Gunpowder. He is a Chartered Financial Analyst and joined Agora Financial from Investment Counselors of Maryland, investment advisor's for one of the top small-cap value mutual funds. Dan combines his institutional background with a drive to seek out the most attractive investments within big picture trends.
Last week, market volatility reached record levels. Dan Amoss says the wild gyrations in stocks are the result of hedge funds liquidating assets to cover their highly-leveraged positions. This means some good firms — especially those providing vital functions in the food and energy markets — are now massively undervalued.
It remains to be seen whether fear takes control of the markets again today. So far, global equities have seen a reprieve from the brutal pounding they suffered last week.
The crash in stock prices has most investors spooked. But it’s worth keeping you head while others lose theirs, says Strategic Investment editor Dan Amoss.
Right now, there are some very healthy resource stocks are shockingly cheap. What Dan calls “screaming bargains.”
Let’s observe a moment of silence to mourn the slow demise of capitalism in the US, says Dan Amoss. “Our government is now overtly manipulating the stock market. We have crossed the Rubicon. We can no longer pretend to be a free market capitalist country while also maintaining confidence in the US dollar as reserve currency.” The SEC’s temporary ban on short selling is a case in point.
Crude oil prices are nudging $100 a barrel today. That’s a long way down from oil’s summer high of $147 a barrel.
“It has been a brutal couple of months for commodities investors,” says Dan Amoss in Rude Awakening.
But it’s the type of wild swing that opens up a great profit play for contrarian investors. Whereas prices this summer overshot fundamentals, prices now look like they may overshoot to the downside.
But commodities will take off, says Dan, when the feds cut rates again…
The government’s bailouts of failed banks and its economic stimulus splurge widened the federal budget deficit to $102.8 billion in July.
Bond king Bill Gross would like to see the budget deficit reach $1 trillion.
Last month, he wrote an open letter to Barack Obama asking him, if he is elected, to save the US economy by upping federal spending by a further $500 billion.
According to Dan Amoss, Gross’s prescription for the economy would do more harm than good. For a start it would cause the price of oil imports to spike…
Dan Amoss at The Rude Awakening says financial stocks have not yet reached the bottom. We are still at the early stages of the credit loss cycle, and the Fed’s bailout strategy will eventually dilute shareholdings of financial institutions. Meanwhile, supply constraints will support commodity prices in the long run, and U.S. is rapidly losing its status as a safe haven for capital. For these reasons, Dan says there are still plenty of attractive short-selling opportunities in financials…
Whiskey and Gunpowder editor Dan Amoss says the recent rally in financial stocks has more to do with short covering than regular buying.
Weak institutions were shorted so much that a bounce was inevitable.
Despite an SEC clampdown on shorting, Dan says legitimate shorting is vital for the stock market and is not to blame for the stategic mistakes of U.S. banks.
For those still looking for new short ideas in the sector, Dan says Allied Capital (NYSE:ALD) is a good place to start…
Strategic Investment editor Dan Amoss is sure of one thing: Every paper currency in history eventually fell to its intrinsic value: zero. And the dollar is no different.
Dan says Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) shareholders could be wiped out by debt offerings by next summer.
The alternative is Uncle Sam issuing billions in new Treasuries to back Fannie’s and Freddie’s liabilities, and the Fed then monetizing them. This could lead to double-digit interest-rates and the eventual collapse of confidence in the dollar…
Strategic Investment editor Dan Amoss is sure of one thing: Every paper currency in history eventually fell to its intrinsic value: zero. And the dollar is no different.
Writing in Whiskey and Gunpowder, Dan says that Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) shareholders could be effectively wiped out by endless debt offerings by next summer.
The alternative is Uncle Sam issuing billions in new Treasuries to back Fannie’s and Freddie’s liabilities, and the Fed then monetizing them. This could lead to double-digit interest-rates and the eventual collapse of confidence in the dollar…