How A Big Hedge Fund Ace Lost 95%

One of the biggest hedge fund managers, Bill Ackman, considered to be one of brightest, lost over 95% in one of his largest positions, Valeant Pharmaceuticals (VRX).

He held the stock for about 3 years, while the stock plunged from $257 to $11 on March 14, 2017. On March 13, he declared he had sold his entire position in Valeant.

The ‘Death Of Coal’ Was Premature

President Obama promised in 2007 that his policies would “bankrupt the US coal industry.” This was one promise that was kept.

A study found the coal industry lost 50,000 jobs from 2008 to 2012. That’s a lot of misery for those families. Many leading coal companies went bankrupt.

Dohmen Capital presents the chart below for KOL, the ETF for coal companies. The ETF lost 90% of its value from the 2011 peak.

Retail Bulls Get Slaughtered

The bulls in the retail sector over the past year got another disappointment with weak sales during the holiday season. As we recently pointed out to our Dohmen Capital clients, Wall Street analysts were bullish on retail late last year, predicting that Christmas sales would be strong. The election results produced further optimism, saying that the prospects of the new President will encourage consumers to spend more.

If the world were only that simple! To spend more, people need more income, which has been declining for several decades. They need jobs, which right now is not happening except in

Samsung Catches Fire While Apple Sales Disappoint

Apple may not have their phones burning up, but they have other problems, such as disappointing sales of the iPhone 7, so poor that for the first time, they didn’t even release first week sales.

At Dohmen Capital Research, we see that Apple’s US Mac sales are also plunging, down 13.2% from one year ago. This is not a big part of total Apple sales, but it adds up when all the other “great hopes,” such as the Apple Watch, Apple Pay, Apple TV, etc. have fizzled.

Is the Inevitable Debt Collapse Predictable?

The national debt is accelerating at a geometric rate. But no one in Washington seems to notice. “Geometric” rate means it is accelerating exponentially.

Have you noticed that current members of Congress never mention the horrendous explosion in the nation’s debt? Apparently, they hope that Americans won’t notice what they have done to our economic future.

Why Is There A Shortage Of iPhone 7?

When Apple management announced that the iPhone 7 was sold out, the stock soared about 14%. That’s an increase in market value of over $80 billion. We call that a windfall from a shortfall.

We were skeptical. We consider the reception of iPhone 7 lukewarm, certainly not enough for demand to soar above expectations.

However, there probably is a real shortage at the moment. But instead of being caused by big demand, couldn’t it be due to a lack of supply?

The Folly Of Economists: Negative Interest Rates

The person nicknamed “Helicopter Ben”, because he said it would be easy to fight DEFLATION, even if it had to be done by throwing money out of helicopters, gave us ‘ZIRP.’ That means “zero interest rate policy.” Now he seems to be leaning toward ‘NIRP,’ “negative interest rate policy.” He is an economics professor now. We can only hope that his students do some outside reading, like Ludwig von Mises.

Jeff Cox and Katie Kramer of CNBC wrote this:

The Folly of Central Bankers

The virtually unlimited level of credit creation by the major central banks over the past seven years has created conditions never seen before in the history of mankind. Yields on government bonds in many countries are now below zero, which we have never seen to this extent in history. In Europe, over $11 TRILLION of government bonds now have a yield below zero. That means the bond owner, in effect the lender, pays interest to the borrower.

This is the ultimate absurdity. How can anyone believe that this won’t eventually result in an unstoppable crisis?

How to Fix the Fed!

The forecasts of the Federal Reserve have always been amazingly inaccurate, for at least the past four decades that I have been watching the Fed.

In fact, for 38 years at my firm, Dohmen Capital, we have used the Fed as an excellent contrarian indicator at important turning points, especially as the economy goes into recession. When the Fed Chair tells Congress “there is no recession in sight,” it confirmed our work that either the recession was immediately ahead, or had already started.

Just Say No To Stocks

TINA is not a girl, it stands for “There Is No Alternative” to stock investments.

This is the latest obfuscation by Wall Street. It’s the typical illusion deliberately created at market tops to keep naïve money managers from selling, because that would interfere with the selling and shorting by the large Wall Street firms.

Wall Street never mentions that stocks are vastly overvalued. The smartest money managers say they can’t find anything to buy. They never tell you that corporate earnings have now had an earnings decline for five consecutive quarters.

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