A Personal Note From The Editor
I began publishing the Financial
Trend Forecaster newsletter in
1995 upon the death of James Moore the
creator of the Moore Inflation
Predictor. I have
continuously published the Moore
Inflation Predictor© every
month since.
The Financial
Trend Forecaster specializes in
predicting trends and profit opportunities
resulting from trends in Inflation, the
Stock Market, Gold and Bonds. InflationData.com
specializes in all forms of information
about the nature of Inflation
I began investing in the
stock market at the age of 15 after
earnestly reading my grandfather's
financial newsletters. He subscribed to
several "Hard Money" newsletters
of the time so I was steeped in an
admiration for Gold, and an aversion for
"Public Debt". My grandfather was
an old German who had lived through the
hyperinflation days and was a firm believer
in a strong currency, Gold and Swiss Banks.
By the time I graduated from
High School, I had invested my college money
in South African gold stocks (long before
South Africa became prominent in the popular
press and investing there became
"politically incorrect"). These
stocks paid off handsomely over the next
four years and the dividends earned returned
many times the original principal invested.
So the dividends paid for a good education
at a private engineering college in New
York. By the time I graduated with a Major
in Management and a Minor in Engineering the
value of my stock and my hard money
education had grown greatly.
One Christmas while still in
College, I made my first foray into
option trading. I sold some covered
call options against some Canadian gold
stocks I owned (in addition to the South
Africans) because I firmly believed the
price of Gold was temporarily headed
down. I successfully picked up a few
hundred dollars for Christmas presents that
year and was able to keep my stocks intact.
Over the many years since, I
have had many other successes and a few
failures too, but I have always tried to
learn from my mistakes. Anyone who
claims to never have had a loss is either a
liar or has never made a trade. The key to
investing is to know your investment,
maximize your gains, limit your risk and
keep your losses small.
The day of the crash
of 1987 I made several thousand dollars
shorting the market, but my most spectacular
success to date has been in the currency
arena. I felt that the Yen had peaked
against the dollar and was about to fall off
a cliff. I "splurged" and
bought about $400 worth of put options on
the Yen and put them away.
I didn't watch the market
too closely because sometimes it makes you
too jumpy and you "leave too much
profit on the table". In general I knew
the Yen was heading down but didn't follow
the day to day fluctuations. I only had $400
to lose so I just let it
ride.
As the options neared
expiration I checked on their price and my
meager $400 investment was up a whopping
1500% or now worth $6000. At first I
thought there must be a misprint in the
paper. But after a bit of checking I
realized it was correct so I entered a sell
order. The day I sold was the exact top of
the market and somehow I received more than
the highest quote in the paper.
According to the "Wall Street
Journal" I should have received a
maximum of $7200 and instead my account was
credited almost $10,000!
So in three months, I had
made 2,500% and turned $400 into $10,000!!!
These options were extremely far
"in the money" and therefore were
extremely thinly traded. I assume someone
wanted to close out a position very badly
and I probably couldn't have done the same
thing on a large number of contracts.
Another time, in 1991, the Moore
Inflation Predictor© was
predicting a major drop in inflation, so I
decided to invest heavily in bonds. Rather
than take a conservative approach and invest
in a bond fund (which eventually made about
24%) I found an individual bond (Unisys)
trading at a steep discount to Par. The
computer industry was currently "out of
favor" and Unisys was not doing well
financially, but the company could easily
cover the small bond issue out of petty
cash. The bond had a short maturity,
so it really was a very low risk trade. By
the end of the year however, Unisys was back
in favor, the bonds were at par and interest
rates had fallen like a rock. So instead of
making 24% I had made close to 40% on my
money.
Since then I have seen
extremely hot markets and market crashes. In
1997 I began looking for a top in the market
and told my subscribers that the market was
taking on the proportions of a mania. And
although the market continued upward for
another year and a half the resulting crash
is now history. My philosophy is to let
someone else have the first 10% and the last
10% of any given rise and I will take my 80%
out of the middle.
I have now been actively
studying the market for over 35 years. I
have read hundreds of investment newsletters
and scores of books. Over the years I have
traded Stocks (foreign and domestic), Bonds,
Mutual Funds, Currencies, Options, and
Metals. In addition I have been licensed by
the National Association of Securities
Dealers to sell Securities and Mutual Funds.
(I received a 92% and a 98% score on my
first try on two exams that many
professionals require two or three tries
just to pass.)
I gave up my Securities
License because I did not like what I saw in
the Securities Industry. This was in
early 1987 and the industry wanted dealers
to get their customers to Buy, Buy, Buy! The
market was HOT! I felt it was TOO HOT and
customers should be selling and taking their
profit, but the industry wouldn't let me say
that, so I quit.
I have spent the last few
years as a licensed Microsoft Professional
learning the skills necessary to computerize
my investment models and developing web
publishing skills. All the while I have been
installing computer networks around the
world in exotic places like Ecuador,
Thailand, Germany, Kenya, Ivory Coast, S.
Korea, Guatemala, Zimbabwe, Hong Kong,
Brazil and London. All this traveling has given me a broad
perspective on the world. Throughout
this time I have continued to hone my
investment skills and publish Inflation and
Investment trend information at Financial
Trend Forecaster. In 2003
we expanded our
services to include
Inflationdata.com and YourFamilyFinances.com
Hope you find our
information helpful.
Sincerely,
Tim McMahon, Editor
Financial Trend Forecaster
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