Dan AmossDan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which gained 462% as the stock fell from $45 to $12. And he called American Airlines’ bankruptcy long before the Chapter 11 filing, telling readers to short the stock, which tanked from $6 to just 26 cents.

Formerly, he was investment adviser to one of the top small-cap mutual funds in the country. He grew up on a semi-working small farm that his great-grandfather bought in 1907, learning thrift and the value of hard work through generations. 

This informs his drive to seek truth and expose frauds and promotions that suck in investors. He cut his teeth in finance interviewing management teams in “roadshows” and so knows the kind of BS they sell.

His bottom-up investing style focuses on management strategy, return on capital and the truth (and lies) buried in financial statements.

A Plan For Post-Election Turmoil

As we get to the last votes counted in this election, the question is where do markets go from here? With the possibility of persistent legal challenges and vote recounts in the days and weeks ahead, demand for crash hedges (including puts) could quickly return. The right position is to remain defensive, with plenty of portfolio cash and small-sized options positions on a few carefully selected stocks and ETFs and look to safe havens like gold.

Dark Money Sell Alert: Take An 88% Gain On FCX Calls

CX reported earnings recently and management’s guidance was bullish with a forecast of rising production in mining. As a result, a strong rally occurred for the stock. Given the economic sensitivity of copper prices, and the election-related turmoil that still might lie ahead, FCX could surrender some of its gains before its January option expiration so we recommend taking gains. Also, with a growing fear that CME’s interest rate futures volume will remain low for years into the future, we recommend selling that position today as well.

Election Could Spark Unwind of Blue Wave Trades

Although most polls favor Joe Biden winning the White House, these odds have fallen in recent weeks as media coverage of Biden has turned slightly more negative. Yet interestingly, a basket of “blue wave,” or Democratic-sweep stocks, has not corrected as much as one would have expected. If Trump surprises the pollsters by winning, the decline in our latest recommendation could be very dramatic as blue wave trades unwind.

The Presidential Polls Might Be Wrong… Again

As polling news is front and center in the media during the final weeks leading up to the election, one notable polling firm still gives the edge to Trump. And it happens to be the only one that called Pennsylvania and Michigan for Trump in 2016. If Trump wins due to a much higher than expected turnout of voters for him in key states, then it would be a surprise to Wall Street and the investing environment would change considerably.

Royal Caribbean Cruises To Dilution

With changing consumer behavior due to the pandemic, the travel and leisure industry is suffering due to cash burn and weak balance sheets. This includes cruise ship operators like Royal Caribbean. Like so many cyclical travel companies and airlines, RCL shareholders are suffering significant dilution of their stakes in the company

Fund Managers Say: The Fed Has Done Too Much

Investors are anxious about how the market environment might change post-election. If stocks fall, the Federal Reserve will repeat the aggressive asset purchases of March 2020, when the markets were melting down. The Fed’s ability to stoke an ever-bigger bubble in stocks has its limits though. The active fund management community seems to agree that the Fed has already caused more harm than good in its efforts to manipulate so many markets.

Project Prophesy October Portfolio Update

Despite the September market correction, most investors are still positioned very overweight in risky assets. When a risk-off episode arrives, the lopsided nature of investor positioning means prices of many stocks can fall very significantly and very quickly. This decline will benefit our two latest put positions. Also, we know that the Fed will redouble its stimulus efforts during the next risk-off episode, which bolsters our gold positions. For now, read on as Dan gives guidance on all our open positions, including two stocks moving from a buy to a hold.