How do you world class trading powers in 32 seconds? First things first. Is it possible to get those trading powers in 32 seconds? It really is but let me hopefully give you a little bit of perspective before we really dive into how exactly to get these trading powers. I want to make a little bit of comment first. The reality of life is most everybody would like to go to sleep and wake up rich. I would to. Let’s face it. Most of us don’t like the idea of toiling away 20, 30 years to make our money. It doesn’t make any sense so I think we are all on this quest for short cuts and getting places faster; getting places so we can eventually do what we want to do.

Most of you probably heard the old clique story about the executive who goes to the Caribbean and is supposed to be enjoying himself on vacation and he just can’t seem to do it. He finally is tossing and turning one night. He goes out on a local dock very early in the morning and he is just sort of watching the sun rise and this guy comes in on a boat and he is fishing. So this guy goes into this explanation as to how he can increase his operations, get a boat and another boat and hire people and retire. So the guy asks him well, what do I do when I retire?

He says well, you can go to a tropical island and fish all day. Well the guy said, that is what I am doing right now. So we have got to put some perspective into our life. As you go through this process and you start to know me, you’re going to realize that I am really big on getting rid of excuses. What I find gets in the way of traders in particular, are some of these excuses and I am hopefully going to help you break through a lot of that. What you are going to be introduced to here is that this just isn’t a trading program.

I believe to the core of my being that trading is one of the greatest things that you can do, not just from a financial standpoint but from a personal standpoint.

Mac X is recognized as a forex expert trainer, forex trader and author of three best-selling forex trading books and Home Study Courses including “How To Get Filthy Stinking Rich Trading The Forex” book and Home Study, “How To Trade The Harmonics of The Foreign Exchange Markets”. Mac X has trained over 1,300 students in large forex seminars, one-on-one and small groups. Read Mac’s Forex Blog for more Forex Trading information at TheInsiderCode.com

Unlike some aphrodisiac colognes that claim to work based on unproven ingredients that have only anecdotal or legendary evidence to prove their effectiveness, Pherlure works based on actual scientific principles. This powerfully attractive cologne works by using the chemicals naturally present in human pheromones, particularly dehydroepiandrosterone.

This chemical is found in underarm sweat, and has proven attractive powers. Women who have been asked to sniff fabric treated with the underarm sweat of various men inevitably found those men much more attractive than men whose sweat they didn’t get to sniff. This was true even if the men who didn’t provide sweat samples were much more physically attractive than the men who did provide sweat.

Women perceive pheromones through the vomeronasal organ–a gland inside the nose that is there for the sole purpose of picking up signals from pheromones. Women don’t even notice the presence of pheromones–these chemicals work on a very subtle basis. However, they respond to them each and every time.

It doesn’t even take a lot of pheromones to attract women. Just one spray of Pherlure on a pulse point such as the neck or wrists is enough to do the job. Men who have tried this product and reported their experiences online have stated that multiple women usually approach them within an hour or less of their arrival at a party or event, and that these women tell them they don’t even know why they feel so attracted. Men who are married and who have experienced the inevitable cooling off of their sex lives have reported amazing reinvigorations that have saved their relationships.

Every animal produces pheromones to attract their mates. Both male and females produce these chemicals. In fact, the majority of sexual attraction has nothing to do with looks or personality. It’s all in the pheromone chemicals our bodies produce. Wearing Pherlure enhances and intensifies this natural process, and from real user experiences reported online, it’s obvious it works.

For more details about Pherlure cologne and its benefit go to Pherlure review website.

We do recommend Pherlure if you serious to enhance your relationship with your partners.

An earlier article by this author (”The Secret Bailout of JP Morgan”) summarized evidence presented by John Olagues, an expert in options trading, suggesting that JPMorgan, far from “rescuing” Bear Stearns, was actually its nemesis.[1] The faltering investment bank was brought down, not by “rumors,” but by insider trading based on a plan drawn up much earlier. The deal was a lucrative one for JPM, handing the Wall Street megabank $52 billion in loans from the Federal Reserve (meaning ultimately the U.S. taxpayer). So how did JPM get away with it? Olagues notes the highly suspicious fact that JPM’s CEO James Dimon sits on the Board of the New York Federal Reserve.

In his latest post, Olagues discusses the fate of Lehman Brothers, the nation’s fourth-largest investment bank and the next faltering bank expected to fail.[2] Unlike Bear Stearns, which got decimated by the JPM buyout using Federal Reserve money, Lehman Brothers is probably in line for a massive bailout from the Fed. At least, that’s what its CEO Richard Fuld seems to believe. The June 4, 2008 Financial Times of London quoted him as stating, “The Federal Reserve’s decision earlier this year to lend directly to investment banks should take questions about Lehman’s liquidity off the table.” Whether Lehman can come up with the “liquidity” to meet its debts is no longer an issue, because it expects to be feeding at the trough of the Federal Reserve, just as JPM did when it bought Bear Stearns at bargain-basement prices. The difference between the two “bailouts” is that Lehman Brothers, unlike Bear Stearns, will actually get the money. Why is Fuld so confident of this rescue operation? Olagues notes that Fuld, like Dimon (and unlike Bear CEO Alan Schwartz), sits on the Board of the New York Federal Reserve.

A conflict of interest? It certainly looks like it. Indeed, Olagues points to a statute defining this sort of self-dealing as a criminal offense. 18 U.S.C. Chapter 11, Section 208, makes it a felony punishable by up to 5 five years in prison for members of the Board of Directors of a Federal Reserve Bank to make decisions that benefit their own financial interests. That would undoubtedly apply here:

“Fuld, at last count, owns 1.9 million shares of Lehman . . . . Although Mr. Fuld sold over $320,000,000 worth of stock at near all time highs in 2006 and 2007, received through the premature exercise of his stock options, he still has value in his present holdings of approximately $100,000,000.”

Likewise, says Olagues, “James Dimon holds almost 3 million shares of J.P. Morgan stock worth over $120 million with taxes already paid and executive stock options equal in my estimate of another $70 million. His dispositions of stock equaled $140 million over the past few years.” Olagues adds:

“Fuld, like Jamie Dimon, was at the luncheon on March 11, 2008 with Bernanke, Rubin, CEO of Citigroup, Geithner, President of the New York FED, Thain of Merrill Lynch, and Schwarzman. Some claim that the meeting was about Bear Stearns and how to handle the situation.”

Needless to say, Bear CEO Schwartz was not invited to the luncheon. “Lehman Bros. is one of the original stock holders of the New York Federal Reserve Bank,” Olagues observes. “Bear Stears does not now have any ownership in the FED banks.”

The luncheon was held three days before the March 14 collapse of Bear Stearns stock that led to the bank’s demise. If the luncheon attendees were indeed discussing the Bear problem on March 11, testimony before the Senate Banking Committee in which the principals said they first heard of the problem on the evening of the thirteenth, says Olagues, was “less than truthful.”

The evidence at least warrants an investigation, but who is going to hold these self-dealing Federal Reserve Board members to account? New York Governor Eliot Spitzer, the former thorn in the side of the Wall Street bankers, has been summarily disposed of; and under the latest proposal of U.S. Treasury Secretary Hank Paulson, the Federal Reserve itself will soon become the chief overseer and regulator of the banks. The Federal Reserve will regulate the Federal Reserve Boards, with their litany of private bank CEOs, a clear case of the fox guarding the henhouse.

____________________________

1. Ellen Brown, “The Secret Bailout of JP Morgan: How Insider Trading Looted Bear Stearns and the American Taxpayer,” webofdebt.com/articles (May 13, 2008); John Olagues, “Bear Stearns Buy-Out . . .100% Fraud,” optionsforemployees.com/articles (March 23, 2008).

2. John Olagues, “Conflict of Interests at the N.Y. Fed,” optionsforemployees.com/articles (June 11, 2008).

Ellen Brown, J.D., developed her research skills as an attorney practicing civil litigation in Los Angeles. In “Web of Debt,” her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://www.webofdebt.com/ and http://www.ellenbrown.com/ Her eleven books include the bestselling “Nature’s Pharmacy,” co-authored with Dr. Lynne Walker, which has sold 285,000 copies.

Andreas Kerchberger is a “home based” Forex trader and businessman. He says he gained years of experience working at Deutsch Bank. Working at one of the world’s most prestigious banks is certainly an accolade but does work experience at an elite financial institution mean you can create a worthwhile Forex trading software?

The Forex Killer software, aside from it’s clever name contains embedded mathematical algorithms which analyzer when to buy and sell foreign currencies on the Forex market. The software works by breaking down the percentage in pip change and computing an ideal buy/sell time. The software is user friendly and utilizes a large button and menu format. I always like this sort of feature in a program because I hate to squint my eyes while I am trying to work!

The Forex market as even the most basic trader knows; trades 24 hours a day, and seven days a week all over the world. Thus, even while you are sleeping your currency holds are either appreciating or depreciating in value. Subsequently, even if a piece of software could tell you what to do.. if you are sleeping it will not do you much good. The software does have some drawbacks.

The one I found most annoying was the language barrier (Andreas is German), but after a few uses you get used to a few misspellings. The Forex Killer software is a valuable tool for Forex trading, but is certainly no substitute for a basic knowledge of the Forex market. If you trade with common sense, diligence, and a competitive spirit then the Forex Killer Software will almost certainly help you skyrocket your profits.

The Forex Killer Software has personally helped me a great deal with my trading. It is my hope that it will do the same for you.

To learn more about The Forex Killer software, please click here

What is leverage?

Here is a definition of leverage from an online dictionary
“leverage - The use of credit or borrowed funds to improve
one’s speculative capacity and increase the rate of return
from an investment, as in buying securities on margin.”

Essentially, the core idea of leverage is that investors can
use less money to control bigger amount of investment so
that investors can make more money when the price movement
is in investors’ favor. In fact, the investment involved in
leverage does not have to be stocks, it can be bonds, or
real estate, or any other investment vehicles. It does not
have be margin or debt either. Options (put or calls),
warrants are special kind of leverage where small amount of
dollar can control much bigger amount of common stocks.

Leverage is common tool available for individual investors.
Whenever we open a brokerage account at pretty much any
broker, such as E*trade, TD Waterhouse, etc, we can enable
margin or option feature pretty easily. Because options
usually are not favorable leverage tool for value
investors, I generally do not recommend options for
investment purposes. This article will focus mainly on
margin to illustrate the concept and usage of leverage in
stock investment.

Leverage - how it works?

Margin is open-ended debt that investors borrow money
forever as long as the margin requirements are met. Right
now at this low interest rate environment, brokerages
typically charge about 5% - 7% interest rate on margin
debt.

Here is an example how an investor can make more money by
using margin. Suppose John had $10,000 deposited into a new
brokerage margin account 5 years ago. Margin interest rate
was 5% for past 5 years. John has invested into only one
stock XYZ with 20% yearly smooth performance( there was
rarely such stock existing, just a hypothetical one) for
past 5 years.

Case 1

If John did not use any margin and fully invested that cash
into stock XYZ, the past 5 years performance was 20% per
year or 149% total performance for 5 years as in Table 1.

Table 1 Full investment into XYZ, no margin.
year Account Equity Value

start $10,000

year1 $12,000

year2 $14,400

year3 $17,280

year4 $20,736

year5 $24,883

Case 2 If John invested $20,000 into XYZ in his account and
borrowed $10,000 money on margin 5 years ago, every year
John had to pay 5% interest or $500 margin interest, but the
investment performance was 30% per year or 273% total
performance for 5 years as in Table 2. That is significantly
higher performance than Table 1 case.

Table 2 Borrowed $10,000 on margin. 5% margin interest

year Account Equity Value

start $10,000

year1 $13,500

year2 $17,800

year3 $23,060

year4 $29,472

year5 $37,266

Leverage - are there any trap?

By looking at table 1 and table 2 cases, should we all rush
into margin tomorrow? Not yet. There is serious flaw in
above 2 cases.

In real life, you can rarely find a stock performed like
above example XYZ! In fact, investors should never expect a
stock can rise smoothly over relatively long time frame.

Here is a typical stock XYZ would have done for 5 years. The
5 years performance was still 20% per year in average, but
not smoothly. In the beginning of second year, due to a
short term negative event, XYZ lost 60% of price suddenly
and recovered all losses and gained 20% that year at year end.

Now let’s redo that math for above cases.

Case 1 If John did not use any margin, the 5 year
performance was no difference. John did not sell during the
second year 60% loss and he still made 20% for that year.

revised Table 1 Full investment into XYZ, no margin.

year Account Equity Value

start $10,000

year1 $12,000

year2 $14,400

year3 $17,280

year4 $20,736

year5 $24,883

Case 2 If John invested $20,000 into XYZ and borrowed
$10,000 money on margin 5 years ago into that portfolio,
The beginning of second year John had $24,000 in XYZ with
roughly $10,500 margin on it. Because XYZ lost 60% suddenly
during that year, which triggered margin call, John’s
broker liquidated John’s account and John lost everything on
year2! John’s account was wiped out

revised Table 2 Borrowed $10,000 on margin. 5% margin
interest

Account Equity Value

start $10,000

year1 $13,500

year2 $0

year3 $0

year4 $0

year5 $0

Let’s think about above revised tables. XYZ stock was not really
bad stock, it performed well with 20% return over past 5
years. However, by misusing margin, John actually lost
everything and got wiped out!

Don’t use leverage, don’t use margin if you do not fully
understand it!

Rule No. 1 - Forget about reward, focus on safety

The No.1 reason investors want to use leverage is to make
more money, not to lose money. Wipe out is especially bad.

Over past decades of stock investment, I made lots of
mistakes before, speculation and losses at earlier years,
misjudgment of stock analysis, etc. But one thing I never
encountered that I never got wiped out because I have always
been aware of the danger of margin and danger of leverage
lure.

I have seen online BBS discussions that somehow wipe out is
beneficial to investor and a great investor must go through
multiple wipe outs. Maybe one wipe out was not that bad for
an individual so that he/she can learn a lesson in earlier
years. Something must be wrong if the investor went through
multiple wipe outs. He/she was not learning from past
failures.

The risk of margin comes from the volatility of stocks and
diversification degree of portfolio. To avoid risk of margin
leverage, investors can study past chart of stock price, and
diversify portfolio into different stocks or different
industries. While a value investor does not have to care
that much about short term stock price movement, a value
investor must take extraordinary caution on analyzing the
volatility of a stock if he/she is using leverage in stock
investment.

While past stock price volatility and portfolio
diversification are all relevant, there is more to consider
on leverage. Here comes Rule No.2 below.

Rule No. 2 - the riskier the investment, the less the
leverage

The key thing to avoid wipe out in leveraged investment is
to use leverage based on risk of investment. The more risk
of portfolio, the less leverage or less margin can be used.

The risk can not just be past volatility, a value investor
must do home work of business analysis of company profits or
earnings to assess the risk of investment.

Real estate is relative safe so that homeowners or real
estate investors can use 4-1 to 10-1 leverage to buy a
house on mortgage.

Banks use up to 100-1 leverage and most local banks in USA are
pretty safe. Bank business is essentially like a leveraged
investment. Banks borrow money from retail depositors and
lend out money with mortgage or business loans. We can
consider mortgages or business loans are “investment
vehicle” of banks. The interest difference between checking
account (0%-1%), or CD (2%-3%) and mortgage or business
loans (5% to 8% or more) is what banks are making. Because
interest rate up or down volatility is not as big as that of
stocks, 100-1 leverage is not really as scary as it may
appear in many cases.

Value investing is just a “special” kind of business just
like bank business or real estate investing. Value investors
can evaluate leverage usage just like a bank or real
estate investor. There is nothing truly wrong with leverage
if investors can properly use it. The value investor master
Benjamin Graham said clearly in his book Intelligent
Investor, that it is perfectly OK to use margin to profit
from some bond arbitrage opportunities while it is actually
very unwise to load full bunch of hyped up penny stocks in a
cash account!

Rule No 3 - Look for minimum 2-1 margin interest coverage

In typical security analysis, an interest coverage of 4-1 or
2-1 minimum ratio is usually standard criteria to assess the
risk of bond investment. If a company’s pretax or
pre-interest earning is $4 per share, and its debt interest
is $1 per share, it meets the 4-1 interest coverage ($4
divided by $1) and therefore the company’s bond is
considered as safe investment.

The same concept can be applied to leveraged value
investment. This is particularly true for certain bond-like
investment like REIT or high dividend stocks. If the
investment reward is less than 2-1 ratio, don’t even
consider to use any leverage.

Case study on FB Here is case study of my past 2001 stock
pick Friedman, Ramsey Asset (Ticker FB, now merged into
FBR). In 2001, FB was trading right at its book value with
18% dividend yield, and it was REIT stock. Its business
model was leveraged mortgage investment by borrowing short
term loans with 3% and investing into long term Fannie Mae
or Freddie Mac mortgage with interest of 5%. FB utilized
10-1 leverage on this 2% interest rate spread and made
nearly 20% return to support this 18% dividend yield.

FB business risk is mainly from interest rate risk. Because
the mortgage was guaranteed by a quasi-government company
Fannie Mae or Freddie Mak, there was little credit risk
involved in FB business model. In fact, compared to banks’
sometimes 100-1 leverage ratio, FB business leverage was
pretty low and reasonable. After an internet bubble, I
predicted that interest rate would be quite stable
if not lower. The stock volatility was not issue as well. If
FB stock price dropped below book value too much, FB company
and its affiliate FBR would simply buy up its common shares
instead of investing into mortgages.

Considering 18% dividend yield vs 5% brokerage margin
interest, there was nearly 4-1 ratio of margin interest
coverage if I use margin to buy FB stock, which was exactly
what I did in 2001. During 2001, 2002 and 2003, FB was very
solid stock delivering 18% dividend yield. After the merger
with FBR, FB+FBR almost doubled from where they were couple
of years ago.

Of course, FB investment was just one position of my
diversified portfolio together with NEN and other stocks.
But the rule of 2-1 minimum margin interest coverage can be
applied to other positions as well.

Certainly with portfolio full of safe stocks like FB, or
NEN or other similar value stocks, using a small amount of
margin made sense to enhance performance back in 2001 even
though the market was horrible then. If the stock was a tech
stock like CSCO or YHOO, margin would have been disastrous
and sure way to wipe out an account.

Currently with 7% dividend yield and rising interest rate
outlook, FBR is no longer as safe and profitable investment
as FB was in 2001. FBR no longer qualifies my margin
interest coverage requirement today.

OK, that’s all for today, remember Don’t use leverage until
you fully understand it!

Article by Henry Lu of BlastInvest LLC, a premium investment newsletter publisher in Connecticut. Visit http://www.BlastInvest.com for FREE “how-to” investing assistance, web services and more.