• run with the bulls

    get your first month

    of hedgeye free



TODAY’S S&P 500 SET-UP – November 6, 2013

As we look at today's setup for the S&P 500, the range is 20 points or 0.68% downside to 1751 and 0.46% upside to 1771.                                              










THE HEDGEYE DAILY OUTLOOK - 10                                                                                                                                                                  



  • YIELD CURVE: 2.36 from 2.37
  • VIX closed at 13.27 1 day percent change of 2.63%

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, Nov. 1 (prior 6.4%)
  • 7:30am: Challenger Job Cuts, Oct., y/y (prior 19.1%)
  • 10am: Leading Index, Sept., est. 0.6% (prior 0.7%)
  • 10:30am: DOE Energy Inventories
  • 11am: Fed to buy $2.75b-$3.5b in 2020-2023 sector
  • 1:10pm: Fed’s Pianalto speaks in Ohio


  • Election results:
    • Chris Christie, Terry McAuliffe win gubernatorial contests
    • Christie’s landslide victory may bolster White House run
    • N.Y. votes to allow more casinos; Colorado approves pot tax
  • 8:30am: Treasury to release qtrly refunding plan, may comment on debt limit, plans to issue floating notes
  • 10am: HHS Sec. Kathleen Sebelius testifies before Sen. Finance Cmte on plans for fixing health insurance exchange website
  • 1:30pm: Labor Secretary Thomas Perez, former Rep. Patrick Murphy, D-Penn., attend discussion on veterans’ employment
  • 2:30pm: Sen. Lamar Alexander, R-Tenn., testifies before Commerce, Science, Transportation Cmte on science, U.S. economy
  • 2:30pm: HUD Secretary Shaun Donovan, FEMA Administrator Craig Fugate testify at Senate Homeland Security and Governmental Affairs Cmte hearing on recovery from Hurricane Sandy


  • Twitter IPO means more scrutiny of exchanges after FB debacle
  • Wells Fargo said among banks facing U.S. mortgage-bond probes
  • Former crude traders claim proof that oil market is rigged
  • Boeing seeks labor peace with offer to keep 777X in Seattle
  • Washington governor assembles perks to keep Boeing in-state
  • Google may scrap plans for HK data center, Apple Daily says
  • Tesla CEO Musk says battery supply constraining production
  • Revamp of U.S. military force planning delays contract awards


    • Ariad Pharmaceuticals (ARIA) 7:35am, $(0.44)
    • Brookfield Infrastructure (BIP) 7:30am, $0.26
    • Carlyle Group (CG) 6:30am, $0.60
    • CenterPoint Energy (CNP) 8:15am, $0.35
    • Chesapeake Energy (CHK) 7:01am, $0.42 - Preview
    • Cimarex Energy (XEC) 6am, $1.55
    • Clean Harbors (CLH) 7:30am, $0.65
    • Coeur Mining (CDE) 8:30am, $(0.22)
    • Devon Energy (DVN) 7am, $1.19 - Preview
    • Duke Energy (DUK) 7am, $1.51
    • Enbridge (ENB CN) 7am, $0.36 - Preview
    • Geo Group (GEO) 7:30am, $0.43
    • HollyFrontier (HFC) 7:30am, $0.62
    • Hospira (HSP) 7:30am, $0.44
    • Humana (HUM) 6am, $2.16
    • ING US (VOYA) 5:50am, $0.65
    • Intact Financial (IFC CN) 6:55am, $0.28
    • Lamar Advertising (LAMR) 6am, $0.18
    • Marsh & McLennan (MMC) 7am, $0.46
    • Molson Coors Brewing (TAP) 7:30am, $1.39
    • NPS Pharmaceuticals (NPSP) 8am, $(0.03)
    • OGE Energy (OGE) 7am, $0.93
    • Penn West Petroleum (PWT CN) 6:31am, $0.06
    • PennyMac Mortgage Investment (PMT) 8:30am, $0.69
    • Pepco Holdings (POM) 6:03am, $0.44
    • PHH (PHH) 8:30am, $0.12
    • Ralph Lauren (RL) 8am, $2.20 - Preview
    • Sinclair Broadcast (SBGI) 7am, $0.24
    • Starz (STRZA) 7:30am, $0.44
    • SunEdison (SUNE) 6am, $(0.13)
    • Time Warner (TWX) 7am, $0.89 - Preview
    • Vonage Holdings (VG) 8am, $0.03


    • ACADIA Pharmaceuticals (ACAD) 4:01pm, $(0.12)
    • Activision Blizzard (ATVI) 4:05pm, $0.04
    • Alnylam Pharmaceuticals (ALNY) 4pm, $(0.40)
    • American Water Works Co (AWK) 4:05pm, $0.85
    • Antero Resources (AR) Aft-mkt, $0.20
    • Atmos Energy (ATO) 5:01pm, $0.12
    • Brookdale Senior Living (BKD) 4:43pm, $(0.03)
    • CBS (CBS) 4:01pm, $0.76 - Preview
    • CenturyLink (CTL) 4:05pm, $0.63
    • Chambers Street Properties (CSG) Aft-mkt, $0.18
    • Concho Resources (CXO) 5pm, $1.03
    • Concur Technologies (CNQR) 4:15pm, $0.26
    • Continental Resources (CLR) 5:47pm, $1.49
    • Corrections Corp of America (CXW) 4:15pm, $0.62
    • EOG Resources (EOG) 5:11pm, $2.05
    • Genpact (G) 4pm, $0.26
    • Giant Interactive Group (GA) 5:05pm, $0.23
    • Hersha Hospitality (HT) 4:30pm, $0.13
    • Integrys Energy Group (TEG) 5:07pm, $0.46
    • Mid-America Apartment Communities (MAA) 4:05pm, $1.22
    • Mondelez Intl (MDLZ) 4:01pm, $0.40 - Preview
    • Oasis Petroleum (OAS) 4:15pm, $0.75
    • PDL BioPharma (PDLI) 4:02pm, $0.39
    • Prudential Financial (PRU) 4:07pm, $2.11
    • Qualcomm (QCOM) 4pm, $1.08 - Preview
    • SolarCity (SCTY) 4:01pm, $(0.51)
    • Solera Holdings (SLH) 4:08pm, $0.56
    • Sun Life Financial (SLF CN) 5:10pm, $0.64
    • Tempur Sealy Intl (TPX) 4:03pm, $0.68
    • Tesoro (TSO) 4:30pm, $0.49
    • Transocean (RIG) 4:30pm, $1.07 - Preview
    • US Silica Holdings (SLCA) 4:30pm, $0.41
    • Western Gas Partners (WES) 4:09pm, $0.40
    • Whole Foods Market (WFM) 4:02pm, $0.31 - Preview
    • YY (YY) 4:01pm, $0.31


  • Tin Exports From Indonesia Seen Jumping as Buyers Adapt to Rules
  • Platinum Giants Ready to Stare Down Union Over Pay: Commodities
  • WTI Rebounds From Five-Month Low Before U.S. Fuel Supply Data
  • Copper Rises Before U.S. Reports Seen Signaling Further Growth
  • Wheat Climbs on Signs of Demand From Egypt to Iraq; Corn Steady
  • U.S. Cotton Supply Seen Higher as Growing Conditions Improve
  • Gold Sales at Perth Mint Advance in October as Prices Tumble
  • Rebar Futures Fall for Second Day as Construction in China Slows
  • Coal Seen Rebounding in China on Indonesia Curbs: Energy Markets
  • Palm Production in Malaysia May Drop First Time in Eight Months
  • Oil Industry May Invoke Trade Law to Challenge U.S. Export Ban
  • China Targets Steel, Aluminum Overcapacity to Boost Profits
  • Traders Face Curbs on Speculation With CFTC Vote on New Limits
  • Floods to Drought Seen Curbing China’s Corn Harvest: Commodities


























The Hedgeye Macro Team














What's new Today in Retail (11/6)

Takeaway: Athl. FW recovers from stormy 2012 led by Brand Jordan,flat out ugly ANF update, SKS exec takes over at VRA, VNO discloses losses on JCP



ADS - Earnings Call: Thursday 11/7 4:00 am

FNP - Earnings Call: Thursday 11/7 10:00 am

COH - Annual General Meeting: Thursday 11/7




Athletic Footwear Data


Takeaway: This 11.5% jump is partially impacted (helped) by tough weather last year -- when sales were down 12%. That said, take a look at Brand Jordan… Up 80% this week??? Units up 48% and ASP smoking every other athletic brand. Amazing momentum.


What's new Today in Retail (11/6) - chart1 11 6

What's new Today in Retail (11/6) - chart2 11 6

What's new Today in Retail (11/6) - chart3 11 6

What's new Today in Retail (11/6) - chart4 11 6

What's new Today in Retail (11/6) - chart5 11 6







  • "Net sales for the thirteen weeks ended November 2, 2013 decreased 12% to $1.033 billion from $1.170 billion for the thirteen weeks ended October 27, 2012."
  • "Total comparable sales for the quarter, including direct-to-consumer sales, decreased 14% with comparable U.S. sales decreasing 14% and comparable international sales decreasing 15%. Total direct-to-consumer comparable sales increased 11% for the quarter."
  • "Excluding these charges, the Company expects to report adjusted non-GAAP earnings per diluted share at the higher end of prior non-GAAP guidance of $0.40 to $0.45. This expectation now reflects lower sales and gross margin rate than anticipated offset by expense and other favorabilities."
  • "Based on a projected low double digit decrease in comparable sales for the fourth quarter, the Company expects full year adjusted non-GAAP earnings per diluted share to be in the range of $1.40 to $1.50. This projection also assumes significant gross margin rate erosion in the fourth quarter as the Company clears through excess inventory."
  • "The Company also announced that it plans to close all of its stand-alone Gilly Hicks stores. The Company expects to substantially complete the closures by the end of the first quarter of Fiscal 2014."


Takeaway. Comps down 14%? We're so often temped to get involved here, but something makes us pause. Usually that something is our concern about the relevance of the concept. This print validates our concern.


JCP, VNO - Vornado Loses $256.2 Million on Investment in J.C. Penney



  • "Vornado Realty Trust  lost a total of $256.2 million over the course of its three-year investment in the J.C. Penney Co. department store chain, the company said today in a regulatory filing."


Takeaway: They sold too early. In a year, we think the stock will be a teenager.


M - Macy’s appeals to tech-savvy consumers with new app



  • "Macy's has integrated NantMobile’s iD visual recognition technology into its Star Gifts app to allow customers to shop on the go from catalogs, billboards and magazine ads."
  • "As retailers gear up for the holiday shopping season, Macy’s — which is pushing its omnichannel initiative — is reaching out to tech-savvy mobile customers. The iD-powered app’s visual recognition technology allows mobile shoppers to scan items from a catalog, magazine ad or even from an outdoor billboard and purchase them."


Takeaway: Really progressive move by Macy's. To be clear, the Star Gifts app is not new, but the enhanced functionality is. Let's see if it helps boost e-commerce revenue.


VRA - Vera Bradley Names Robert Wallstrom Chief Executive Officer



  • "Vera Bradley, Inc. today announced that Robert T. Wallstrom has been appointed President and Chief Executive Officer and a member of the Board of Directors, effective November 11, 2013. Mr. Wallstrom succeeds Michael C. Ray, who previously announced his intention to retire as CEO."
  • "Mr. Wallstrom brings 30 years of retail experience to Vera Bradley, most recently serving as President of Saks Fifth Avenue's OFF Fifth division…"


Takeaway: We don't like VRA one bit, but this is a pretty good score for the company. We like Wallstrom's pedigree. Also, VRA is trying to broaden wholesale distribution with national accounts. This guy knows how to do it.


KER - Volcom Rolls Out New Store Format



  • The Kering-owned surf, skate and snowboard apparel brand returned to the Los Angeles area after a two-year retail absence with a 2,200-square-foot store on the Third Street Promenade in Santa Monica, Calif. The store introduces Volcom’s updated retail concept...to the West Coast after it was unveiled in March when the brand finished remodeling its New York flagship. 


What's new Today in Retail (11/6) - chart6 11 6


Takeaway: I still can't believe that Kering actually owns Volcom. It made as much sense as when it bought Puma. Last I checked, Puma was not exactly a home run.







The Health Department of Guangdong Province has confirmed that a three-year-old boy living in Dongguan, Guangdong, has been infected with the H7N9 bird flu virus. 

get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

Breaking Bad

This note was originally published at 8am on October 23, 2013 for Hedgeye subscribers.

“Someone has to protect this family from the man who protects his family.”

-Skyler White


Who is Bernanke’s family? Who is Ben Bernanke? Who is John Galt? The People getting jammed with a trashed currency and 0% rate of return on their savings accounts want to know, “yo.” And they want to know now.


Yesterday’s all-time highs in the US stock market put a bloody pit in my stomach. I will not mince words about that and why this morning. Standing up to the tyranny of an un-elected-anti-dog-eat-dog-government-man is my Canadian-American patriotic duty.


Ben, seriously. If you aren’t going to taper, ever, why? Who do you represent? Is it the people in the business of being long bonds? Or is it the government that appointed you to lead this ongoing fear-mongering campaign? Both of our leading indicators on US #GrowthAccelerating (#StrongDollar + #RatesRising) are breaking bad, again. This one is all on you.


Back to the Global Macro Grind


“You clearly don’t know who you are talking to, so let me clue you in. I am not in danger, Skyler. I am the danger. A guy opens his door and gets shot, and you think that of me? No! I am the one who knocks!” –Walter White


That’s right Bernanke, I’m the one knocking. And it’s going to get louder if you keep this up. You can cart out everyone from PIMCO to Zervos at Jefferies to parrot whatever you think you are accomplishing here. I don’t buy it. You’re suspect.


I respect David Zervos’ penmanship and market views, so let’s break down why I think this could break bad versus what he thinks. We are two of the only consistent US stock market bulls of 2013 who have been bullish for completely different reasons:

  1. ZERVOS  - he thinks US stocks up in 2013 is all about QE and that we cannot afford to taper as that would end it all
  2. MUCKER – I think the most important part of the 2013 rally was on expectations of ending QE; not tapering is a disaster

Bernanke and the entire levered long bond bull lobby agree with Zervos. And I actually have no idea who agrees with me, which is probably why our call on US #GrowthAccelerating from 0.38% in Q412 to 2.5% now was the only one of its ilk. Our growth model called US #GrowthSlowing in October 2007 too. US Dollar Devaluation back then was my leading indicator.


So which one is it?


Oh, by the way, all of US economic and market history agrees with my view that:


1.       Strengthening currency + Rising Interest Rates = Pro-Growth Signals

2.       Devalued currency + Falling Interest Rates = #GrowthSlowing signals


In buckets of time, you only have to look past your nose and go beyond the #EOW (end of the world) stuff (2008) and look at the last 40 years of US economic history to understand my point. Both Reagan and Clinton understood this. Nixon/Carter (1970s) and Bush/Obama (last decade) did not. Markets can go up when growth slows; especially slow-growth styles like Gold and Bonds.


For those of you who think “the stock market going up reflects the economy, so Bernanke is nailing it”, I’ll remind you that’s a crock. Venezuela devalued its currency by 32% this year; its stock market is +312%; and its economy sucks – a Policy to Inflate via currency debauchery is not growth. It’s called inflation.


From Nero (50 AD) to 1920s Germany to whatever Chavez left in Venezuela, do not get me wrong, Zervos is quite right that keeping your government stimulated with a meth market can take you for quite a ride, yo! But, again, do not confuse the kind of move we saw yesterday with the one we saw before Bernanke decided not to taper on September 18th.


Rewinding the tapes, here’s what happened yesterday:

  1. US monthly payroll number missed by enough to validate Bernanke’s bs storytelling that we don’t need to taper
  2. US Dollar got smoked to a fresh YTD low
  3. US Treasury Yields snapped my 2.58% TREND line on the 10yr
  4. Gold ripped
  5. Slow growth sectors like Utilities (XLU) had triple the intraday move of the SP500

Is that what you want, yo? Another epic 2007 style US stock market bubble? If you do, we can go right back to reflating the Housing, Gold, Bond, Utility, Foreign Currency, etc. Bubbles. Kinder Morgan can trade at 85x earnings on that too. Rock on, yo.


So what do you want? As my man Walter White would say, “you all know exactly who I am. Say my name.” That’s right. I’m the guy who believes in fiscal conservatism, monetary tapering, a strong currency, and rising interest rates. “Now say my name.”


I’m the guy who went to net short yesterday (6 LONGS, 9 SHORTS in #RealTimeAlerts) and 54% Cash. Timestamped, yo. He’s Heisenberg. I’m going to roll with him, book gains, and protect my family and firm’s hard earned savings.


UST 10yr Yield 2.47-2.58%

SPX 1723-1765

VIX 11.55-14.96

USD 79.02-80.12

Euro 1.36-1.38

Gold 1317-1341


Best of luck out there today,



Keith R. McCullough
Chief Executive Officer


Breaking Bad - Chart of the Day


Breaking Bad - Virtual Portfolio

Buy the EURO: #EuroBulls

Takeaway: We believe now is a great opportunity to get long the EUR/USD on weakness [etf: FXE].

This note was originally published November 01, 2013 at 17:00 in Macro

We believe now is a great opportunity to get long the EUR/USD on weakness [etf: FXE].

Buy the EURO: #EuroBulls  - euro currency 1920x1200 

Draghi and some of his lieutenants (including ECB Governing Council member Ewald Nowotny) talked down the common currency mid-week, suggesting that the ECB was ready to issue liquidity measures to spur the broader economy.  We heard whispers of another round of LTRO, and then the manic media ran with headlines that the ECB is going to cut rates, all of which sent the EUR/USD correcting over 2%.


By our score, the first two LTROs that Draghi issued were complete failures – banks either quickly repaid these loans and/or capitalized playing the spread on these cheap 1% loans, but in any case, did not lend to the real economy. This time around, we believe Draghi has 1). learned his lesson and will not issue another failed LTRO program to boost liquidity, and 2). has suggested in press conferences and other commentary that the data he’s tracking shows initial positive signs of a recovery across the Eurozone, which therefore suggests to us that neither liquidity measures nor a rate cut (why waste the powder now?) would be warranted over the near term.  


Our #EuroBulls Purview:  as we discussed as one of the team’s Q4 quarterly macro themes, #EuroBulls, we’re bullish on German and UK equities (see Keith’s latest video for that update) and bullish on the EUR/USD, built on a few central factors:

  • Bernanke/Yellen continue to burn the USD via delaying the call to taper (note: we do not expect any update in the December meeting), #EuroBulls
  • EUR strength reflects country strength: recent data continues to reflect that the Eurozone economy has stabilized and is beginning to accelerate, #EuroBulls
  • The deflation of inflation across the Eurozone equates to more consumer purchasing power via lowering the consumption tax,  #EuroBulls
  • The ECB’s hawkish policy, which we believe is the decision not to cut rates or issue imminent liquidity, is #EuroBulls
  • The Data: as we show below in a number of updated charts from our #EuroBulls Q4 themes deck, from PMIs and Confidence to Auto Sales and Factory Orders, the trend in the data is positive : this supports our conviction to be overweight European equities over U.S. equities.
  • Further, we see a strong positive correlation between the EUR/USD and the DAX, encouraging us to be long the German DAX via the eft EWG.  [We’re also bullish on the UK’s FTSE, via the etf EWU]

By the Charts:

  • Our levels in the sand:

Buy the EURO: #EuroBulls  - hed1

  • PMIs bouncing:  across the Eurozone, the majors have broadly held above the 50 level indicating expansion.  While we don’t expect gangbuster moves in PMIs over the intermediate term, we expect them to indicate the acceleration in growth we’re seeing from low levels.

Buy the EURO: #EuroBulls  - zz. pmis


  • Confidence Up: as we look out across Economic, Consumer, and Business Confidence, an upward trend is solidified. We expect this improvement to continue.

Buy the EURO: #EuroBulls  - zz. consumer conf


Buy the EURO: #EuroBulls  - zz. bus conf


  • Retail Sales: as a sign of the consumer’s health, and confidence, retail sales are even going up across the periphery: Italy Business Confidence 97.3 OCT vs 96.8 SEPT; Spain Retail Sales 2.2% SEPT Y/Y vs -4.4% AUG; Greece Retail Sales -8.9% AUG Y/Y vs -14.1% JUL

Buy the EURO: #EuroBulls  - zz. italy retail


  • Even Autos are getting a bounce:  New Commercial Vehicle Registrations for the EU just recorded +6.1% Y/Y in September. Any increase in big ticket items is a signal to us of confidence.

Buy the EURO: #EuroBulls  - zz. clunkers


  • Deflating the Inflation: anchoring improving retail sales and confidence is deflation of the inflation.  While Draghi has “failed” to meet his 2% CPI target (currently at 0.7% Y/Y vs 1.1% in September), deflating the inflation equates to a lower consumption tax, which will boost real inflation adjusted growth.

Buy the EURO: #EuroBulls  - zz. inflation target


  • The CPI Turn Matters: the year over year changes are huge!

Buy the EURO: #EuroBulls  - zz. inflation comp


  • German Preference: we continue to like the DAX, on a positive correlation to the EUR/USD. Fundamentals remain grounded with a low unemployment rate (6.9% vs 12.2% in the Eurozone), CPI at 1.3% Y/Y, strong PMIs and consumer and business confidence, and an inflection in factory orders to the upside. [Long German DAX via the etf EWG]

Buy the EURO: #EuroBulls  - zz. eur vs das new


Buy the EURO: #EuroBulls  - zz. germany factory



Enjoy the weekend!


Matthew Hedrick


SEC Tweets - Caveat Accredited Emptor

Takeaway: You can now purchase lots more risk for one million dollars than you could in 1982.

In yet another example of the disconnect between economic reality and government policy, the SEC has put out an Investor Education tweet on the topic of Accredited Investors.  Suffice it to say that we remain unimpressed.


In September, new rules eliminated the prohibition against general solicitation and advertising on certain private offerings – for regulatory geeks, offerings made in reliance on exemptions under Rule 506 of Reg D, and Rule 144 of the Securities Act of 1933.  This affects such offerings as hedge funds, private equity or venture capital funds, and the direct offering of certain privately-held securities.  


SEC Tweets - Caveat Accredited Emptor - 1mill 


Exempt private placements provide investors less information than IPOs and other publicly traded securities, and they often offer illiquid securities or otherwise higher-risk investments.  The private placement exemption relies largely on the investors being more risk tolerant and savvier than the average stock buyer – and wealthier.  And of course neither the issuer nor the SEC is responsible for providing investors with an analysis of the varying success rates of the broad range of private offerings, which cover everything from hedge funds participations, to seed capital for start-up ventures.


Under the rules permitting general solicitation these offerings will continue to be available only to Accredited Investors – the wealthier ones, remember.  What’s missing from the mix now is the previous gatekeeper requirement that the offering entity, or its placement agent, have a pre-existing relationship with the individual investor.  The theory was that investors would be shown deals that were appropriate to their situation, and the placement agent or adviser would take into account the individual’s overall financial picture, risk profile and other unique aspects of their situation.


We will not dive into the debate about whether this is a good idea – or, as some have called it, “open season” on unsuspecting individuals.  But we note that the fuzzy economics of the Accredited Investor standard pushes more of the risk in these investments lower on the investor food chain.


The release provides the following definition:


“An accredited investor, in the context of a natural person, includes anyone who:

  • earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year, OR
  • has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

On the income test, the person must satisfy the thresholds for the three years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse.”


The big change in the definition, as the release points out, is that under Dodd-Frank the value of the investor’s primary residence has finally been excluded from the net worth calculation.  This means, hypothetically, you could lose your summer house in the Hamptons to pay an equity call in a private equity fund, but not your pricey co-op hovel on Manhattan’s Upper East Side.


The release goes on to provide a sample template to help you calculate your net worth, to see whether you qualify to invest in one of the new hedge funds or venture funds that will soon be plastering banner ads across Twitter.  For our nickel, if you need an SEC release to teach you the concept of net worth, you probably don’t qualify to invest in anything (except maybe a third-grade education). 


When the general solicitation rule first came out back in September, we went after the Accredited Investor standard.  Once more, for good measure: the standard covers individuals with $200K in annual income ($300K jointly with spouse) or $1 million in net worth.  This financial standard was introduced in 1982.  The only change to the financial test for Accredited Investor is the removal of the primary residence form the net worth calculation.  The baseline net worth test, though, has not.  As we noted back in September, the 2013 equivalent of one million 1982 dollars is over $2.4 million. 


SEC Tweets - Caveat Accredited Emptor - dr5


This means that the SEC has actually increased your buying power in one key area: you can now purchase lots more risk for one million dollars than you could in 1982 when the standard was first introduced.  We recognize that the Commission is not traditionally home to high-level “quants,” but even without a degree in differential calculus you can see that your dollar now buys nearly two and one-half times the risk it did in 1982, for no greater likelihood of return.


This dismal message is brought to you as a public service – something the Commission wasn’t able to provide.

Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.