Tao Economics

Economics, Investing, Markets & Survival

We got Stopped Out of SJM

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We hit our stop loss for SJM. Using a stop loss is a rule we use to protect capital. It’s not fun, but it REALLY helps with training our investing discipline and protecting capital.

Consumer staple stocks have been selling off which seems to be the trend in motion. Campbells Soup reported earnings last week which where way below expectations and the CEO left the company which appears to be dragging down the rest of the sector.

I believe consumer staple stocks will have their day in the sun again when they figure out to reduce their costs and revamp their brand names.

We are going to obey our stop loss and sell SJM. We held it for over 200 days and are selling at a 2% gain not including dividends.

I will be watching the consumer staples for any signs of life as there will likely be a great moment to get back in a position.

For now, please sell SJM.

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Buy this Micro-Cap Play and Collect an 8% Yield

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Coming at you today with a new pick. So far all of our positions are holding up just fine, even after the market correction and increased volatility.

A quick glimpse in the Tao Stock Tracker will show you that we are still up on all over positions not including dividends. We also still have a wide margin from hitting our trailing stops.

Lets add to our portfolio today with a micro-cap closed ended fund that is heavy on industrial stocks.

Royce Micro-Cap Trust, Inc. is a closed-end diversified investment company whose shares of Common Stock ($RMT) are listed and traded on the New York Stock Exchange. The Fund’s investment goal is long-term capital growth, which it seeks by investing primarily in equity securities of companies that, at the time of investment, have market capitalization of $1 billion or less.

As you can see below, the stock is in a upward channel just below it’s 50-day moving average. I expect the fund to continue trading this way for some time.

Royce Micro-Cap RMT

If the U.S. does get a infrastructure bill passed these smaller industrial stocks could see a lot of action. They are also no doubt benefiting from the reduced corporate tax rate to 21% from 35%.

The fund has a yield of 8.5% and is also trading below its net asset value.

As a benchmark the fund more often than not beats the Russell 2000 index.

You can see in detail how the fund is weighted by industry and it’s heaviest wieghted positions in the following link:

https://www.roycefunds.com/funds/royce-micro-cap-trust/

Recommendation: Buy the Royce Micro-Cap Trust, Inc. closed ended fund (RMT) today 02/21/2018. Our stock tracker is using a 25% trailing stop loss as a sell rule.

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Sell First Majestic Silver Corp – Stopped Out

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We got stopped out of $AG – First Majestic Silver Corp.  I originally recommended a 25% trailing stop.  By the stop loss program we used opted for 18% based off of the stocks beta.

We are going to use the stop loss program I wrote in google sheets to and close out of the position today for a 17.8% loss.

The markets have turned against both precious metals and the miners.  The signals I use for both pm’s and miners flipped to red.

I strongly believe that we will see another massive bull market in miners and in the metals however that might not form until later this year or even possible later in 2018.

The purpose of the stop loss is to take the human emotion out of the sell so we do not occur massive losses, and on the flip side it will allow our winners to run.

If you are following our tracking please sell today.  We will likely re-visit First Majestic Silver Corp at another time.

You can see our booking here: http://taoeconomics.com/tao-stock-tracker/ 

We will no longer be tracking the stock in our open positions.

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The Misleading Media Language – Russian Hack

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There is a large part of our government that is pushing strongly toward Russian confrontation. Our media is constantly using the term “elections were hacked” though whenever you get into the details they are really referring to the CIA claim that the DNC emails where hacked which is a political organization and NOT an election. This CIA claim is also counter to FBI and NSA claims that there was no evidence of Russia involvement. Why constantly use incorrect language of “election hack”? Assume the DNC email’s were hacked and not leaked ,what if evidence showed a hack from Australia? Would there be this same level of rhetoric?

I personally believe it was a leak by a DNC insider wanting to expose corruption within the party and particularly against Bernie. The trend was a movement to elect someone not considered a D.C. insider. The DNC chair Wasserman Schultz was forced to resign the next day after being exposed in an email that the DNC was actively working against Bernie. Wasserman was then hired immediately by Hillary for her campaign. You can’t make this stuff up.

I'd always heard about a secret society that guarded 5 secrets about the system

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What if you had the indicators telling you when to buy and when to sell?

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The amount of Bullshit that is coming at you right now is mind blowing. On the same level as WMD’s in Iraq pre 2003.

I do not typically watch CNN or any network news on TV.  Because of the traveling this past week, I have tuned in a bit more.  CNN is pushing the propaganda hard.  They keep stating that the elections were hacked as if Russians got into the voting machines.   This is completely disingenuous and people are unfortunately lapping it up.

Read more about a DNC email hack vs insider leak here.

The Tao forum is also actively discussing the issue.

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