Sunday, June 17, 2018

JUNE 2018 DESERT OF THE REAL ECONONMICS INVESTMENT NEWSLETTER


TRY TAKING THE QUANTUM LEAP!

LEAPs (Long Term Anticipation Equity Participation securities) are essentially options with longer expiration dates. The have expiration cycles of one to two years. Determining the expiration cycle for LEAPs is a little complicated and is beyond the scope of this Newsletter But here is a link to a good resource.  Also, your broker or your online trading firm can assist you in sorting out the cycles.

LEAPs, like options, are derivative instruments. LEAPs are available for larger stocks and some ETFs. Options, and LEAPs, which are essentially longer-term options, allow you to control more shares of stock with far less capital at risk. If a hundred share of ABC stock trade at $38 per share, options on ABC stock might trade for $1.04 per contract. And options contracts are sold in units of 100, so to control 100 shares of ABC will only cost you $104. If you instead bought 100 shares of ABC, you would be out $3,800.

There are many LEAP strategies LEAPs can be attractive for growth stock investors. If the investor believes that the stock will increase in price over the next year or so, the investor can purchase LEAP calls and earn a far greater return that owning the stock outright. Of course the regular risks that come with options are present. A large unanticipated fall in the stock price can wipe out the call position. And in the case of LEAPs, since you do not own the stock itself, you will not receive dividends.

STAB YOUR FRIENDS IN THE BACK AND HAND YOUR KNIFE OVER TO THE ENEMY.

Engaging with a trade war is a policy that exceeds all collective idiocy. World tariffs are at record lows, averaging about 3.1%. But perhaps even more idiotic are rules that permit an American president to impose tariffs on a ludicrous claim that aluminum and steel imports threaten “national security.” For a country for which the Founding Fathers intended for the legislature to be the dominant branch of government, how in Hades could a president have the unilateral and unchecked ability to impose tariffs? Here’s how…

In February of this year, the US Commerce Department (an agency that some republicans wish to eliminate, sent trump a ginned-up report saying that steel and aluminum imports did, in fact, threaten national security and recommending he impose steep tariffs on both.

“The report recommended that Trump invoke Section 232 of the Trade Adjustment Act of 1962, which allows the president to block imports that he deems threatening to national security. Unlike other trade laws, it doesn’t require him to get congressional approval or a review by the independent U.S. International Trade Commission.’

Continuing, the Forbes article states: “The national security argument is a sham and everyone knows it. Not even Defense Secretary James Mattis bought it. He read the Commerce Department report before it went to Trump, and this is what he said about it in an undated memorandum to Commerce Secretary Wilbur Ross:

“The U.S. military requirements for steel and aluminum each represent only about 3% of U.S. production. Therefore, Dodd does not believe that the findings in the reports impact the ability of Dodd programs to acquire the steel or aluminum necessary to meet national defense requirements.”
WTO rules do permit nations to impose tariffs when the nation’s national security is threatened. But clearly, US national security is not threatened and the claim that it does is a fraud.  These matters will likely be fought out in the World Trade Organization (WTO) and under the General Agreement on Trade and Tariffs (GATT).  

IS THERE MONEY OUT THERE IN THE WEEDS?

The Author Rob sometimes get asked how can a person make money investing in the burgeoning marijuana industry, both medical and recreational.  The short answer is he does not know and is extremely suspicious of any marijuana investment at this time. There are several reasons. First, the industries are illegal under federal law and debt financing is not meaningfully available. Also, the states heavily regulate their statewide systems and many states’ industries operate more like cartels or government monopolies. And finally and most importantly, the industry is filled with scammers and “consultants” looking to separate unsophisticated investors from their money. But he did find this article that can give potential ideas to those whom are interested.

NEW PRODUCT LAUNCH

Last month Desert of the Real Economics Strategic Investments announced that we had become an unregistered agent for Uzbeckisham, a “reversal of fortune” fund. Sales have gone well so far because we have secured our Dark Web Assets with the best type of a security arrangement possible. We have a hit contract on Petrov “Potemkin Village” Vasilovitch, the fund manager.  If he fails to live up to performance expectations, Petrov will be completely reversed.
 
This month we are proud to announce that Desert of the Real Economics Strategic Investments is now registered as Broker-Dealers in the Cook Islands, Somalia, South Sudan, Mongolia and Yemen. This will allow us to broaden the range of investment products we can deliver to our clients, Facebook Friends and click bait suckers. 

So in confluence with this auspicious event, Desert of the Real Economics Strategic Investments announces that it can now offer HoweyCoins*. 

 “[By] Combining the two most growth-oriented segments of the digital economy – blockchain technology and travel, HoweyCoin is the newest and only coin offering that captures the magic of coin trading profits AND the excitement and guaranteed returns of the travel industry. HoweyCoins will partner with all segments of the travel industry (air, hotel, car rental, and luxury segments), earning coins you can trade for profit instead of points. Massive potential upside benefits like:
  • HoweyCoins are officially registered with the U.S. government;
  • HoweyCoins will trade on an SEC-compliant exchange where you can buy and sell them for profit;
  • HoweyCoins can be used with existing points programs;
  • HoweyCoins can be exchanged for cryptocurrencies and cash;
  • HoweyCoins can be spent at any participating airline or hotel;
  • HoweyCoins can also be redeemed for merchandise.

So if you want something for nothing, just remember that there is someone else on the other end of the deal that will make sure you get nothing for something. 

YOU WERE WARNED HERE FIRST, IN THE DESERT OF THE REAL. 
       
* HoweyCoins is a parody site with a fake investment product. It was created by the Securities and Exchange Commission to demonstrate how easy it is for scammers to defraud investors with official looking websites. The term “HoweyCoins” comes from the seminal case of SEC v. W.J. Howey Co., [in which] the Court defined what is an investment contract.  If “a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party,” it is a security and subject to federal regulation.

If you click on the link “Buy Coins Now” you are directed to an SEC site that warns people of the risk of getting scammed by one of these bogus products.