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Opening Statement from the November 2014 Intelligent Investor (Part 1)

First published on November 5, 2014 for subscribers to the Intelligent Investor

Over the past several months economic headwinds from around the world have materialized largely as we anticipated. From our perspective there have been very few if any surprises to speak of. As a result the capital markets have behaved in a fairly predictable manner.

Even in circumstances whereby the capital markets responded irrationally, most of these responses were either largely predictable or not so difficult to interpret. Thus, we feel it has been an easy road to profits over the past few years.

Others are likely to disagree, but prior to giving your attention to their side of the argument it is important to note their bias, their credentials, their track record and prior performance. The key question to ask yourself is whether they are truly credible sources of investment insight and analysis.

Looking past all of the details, we have kept our research customers in the US markets close to 100% of the time over the past several years. This remains as the most important result because the stock market has soared over the past several years. In addition we have accurately forecast every market selloff since 2009. Indeed this is a rare circumstance and one to treasure, as the capital markets are almost invariably fraught with uncertainty even for the most competent investment strategists, analysts and fund managers.

Our economic forecasts have also been quite accurate. For instance, we detected the causes of what would later materialize as deflationary forces in Europe. In response, we recommended near-0 interest rates in the EU several years ago as a way for this region to mitigate deflation. Finally, we predicted Europe would initiate quantitative easing which was recently launched.

Our Latin American research has also yielded excellent results. For instance, we forecast the economic problems in Brazil from the onset a little over three years ago, all while having predicted many of the nation’s interest rate changes and other issues. More important, we have provided accurate trading guidance for the Brazilian iShares market ETF, EWZ. In fact, more than three years ago when EWZ was in the high-70s/low-80s, we stated that we expected EWZ to bottom in the high to mid-30s once Brazil’s economy showed the full symptoms of weakening.

We have also been ahead of the curve on India. We identified issues in India several years ago and pointed to a bearish stance for the Indian market ETF, IFN. In contrast, one year ago we stated that India was the best positioned of the three emerging markets we cover. IFN has significantly outperformed the other emerging market ETFs over that time frame.

We have also discussed numerous risks in China’s economy, all while making sure not to allow these risks to spook us out of the US stock market. We remain on the lookout for issues from China. But rather than allow fear to paralyze us as has happened to other industry professionals, we have struck a nice balance between risk management and performance.

We have also remained ahead of the curve regarding the US economy and capital markets. In short, we have consistently deciphered key economic and earnings data in a manner that has led to profitable investment strategies. Most important, we have navigated the US stock market with near perfection ever since the launch of this publication.

Over and over again we have led the way when forecasting accurate data from the US, EU, China, India and Brazil, while the IMF and Wall Street firms have only matched our forecasts several months later once the opportunities faded.

Finally, we have accurately forecast the commodities, currencies and precious metals markets ever since adding these assets to our research publications.

As discussed in the supplementary audios (released on October 31, 2014), gold and silver...