2015 was the year in which many maalamalama predictions came true. In this article, we’ll post just a small sample of the free newsletter archive predictions from 2015 provided by our Managing Director, JS Kim. Early in the year, JS Kim wrote an article titled, “The Two Key Strategies to Making Money in 2015”, in which he stated these two key investment strategies for success in 2015. (1) The need to remain extremely agile and nimble, and (2) The need to embrace the virtuous quality of patience. In other words, JS predicted that one could no longer employ Warren Buffet buy and hold strategies because Central Banking fraud was going to cause unprecedented volatility in global stock and capital markets. Regarding the need to be patient, this strategy was directed specifically towards gold and silver investors to address the possibility that, after a strong open to 2015 for gold and silver assets, bankers would suppress gold and silver asset prices and force a downward trend (in USD) for another year. With these as our leading thoughts to start 2015, how did we actually employ these strategies for our fee-based client services? We strategically shorted US stock markets multiple times throughout 2015, even once opening a short position that gained about +75% in two days, and though we indeed remained patient in our gold and silver strategies, patience did not equate to passivity, and we shorted banker raids of gold and silver (in USD prices) multiple times throughout the year to retain our positive yield all year long.
On 20 August 2015, here is the chart I posted on my blog titled “The Only Graph You Need to See to Understand the S&P 500 is Already Broken and Ripe to Break Further”. Note that in the graph below, I warned about the US stock markets, “Failure is imminent”!
Over the next 3 trading days immediately following my post, the US Dow Jones Industrial Average plummeted by more than 11% and lost nearly 2000 points before rebounding from the intraday low on the third day. During this same time period, the S&P 500 also crashed by 10%. And during this time, we warned our paying client members ahead of time of what strategies they should utilize to short the US stock market so they were able to profit from this crash.
On 26, October, here is the article I posted warning of an imminent banker raid in gold and silver prices titled, “Danger in Gold and Silver Elevated for Next Couple of Weeks.”
What happened next? As you can see on the graph, again as with my S&P 500 crash prediction, the HUI gold bugs index started a nasty crash the very next day after I posted that article.
Finally, on 9 December 2015, I released a podcast warning about future failure of the US stocks that the mass media were constantly selling to the public as “stocks that cannot fail”, the FANGs (Facebook, Amazon, Netflix and Google). What has happened since? Facebook has dropped -7.78%, Amazon has plunged -10.33%, Netflix also has plunged by -10.29%, and even the almighty Google has fallen by -4.32%. Other momo stocks that the mainstream financial media has tried to convince the public could never fail, such as Chipotle and Apple, have also plummeted respectively by -23.89% and -18.01% since JS Kim broadcast a maalamalama podcast warning of imminent failure in US stocks again at the end of last year.
So with the 2015 year behind us, our CIO newsletter yielded positive returns in 2015 to bring our yield from our inception in 2007 to YE 2015 up to +61.60%, further outpacing and nearly doubling the +32.15% yield of the US S&P 500 over the same time period, and these statistics do not even include the strong performance of gold mining stocks and the strong declines in US stock markets during this past week. The big question now is, What lies ahead for 2016? We think that our outpacing of the S&P 500 index will grow even greater, as we were able to return a positive yield to our clients last year in a year in which the price of gold in USD dropped -10.53%, silver dropped -14.87%, the HUI gold bugs index dropped -30.35% and the Philadelphia Gold & Silver Index collapsed by -33.80%. Consequently, even if you don’t believe that gold and silver will preserve your wealth as the Central Bankers currency wars escalate and you want to ignore the large rebounds that will eventually happen in gold and silver assets, the advice we provided last year in shorting US stock markets last year would have been worth the price of our newsletter to most investors without the additional guidance of how to avoid all the banker-induced gold and silver raids.
The message for 2016 is that no matter what happens this year, there are always ways to earn positive yield, even when most asset prices are plummeting due to Central Bankers’ massive distortion of ALL asset prices in ALL capital markets. Central Bankers have massively distorted asset prices in many global stock markets undeservedly higher and massively distorted asset prices in gold and silver markets tyrannically lower. It is critical that you understand the direction in which Central Bankers have distorted asset prices, and if you do, you can adequately develop strategies that benefit from the period when asset prices inevitably revert from Central Banker distortions back to the mean. Please note that despite the predictions we provide in public forums from time to time, these predictions provided by our Managing Director, JS Kim, are literally just the tip of the iceberg as far as information and strategies we provide to our paying clients, with the most detailed information and comprehensive strategies provided in our Platinum Membership in which we discuss the opportunities in an asset class nearly universally hated by most at the current time, that of junior gold and silver mining companies. From December 2014 to December 2015, our maalamalama Platinum Membership gold and silver mining stock recommendations roughly returned a +31.60% cumulative yield, including the stellar performance of 15 junior gold and silver mining companies we select strictly based upon our Managing Director’s research. At maalamalama, we once again recommended buying a handful of junior gold and silver mining companies to our Platinum Members at the end of last year, so we will publish the results of these recommendations at some point later this year. However, up or down, as you know, volatility of asset prices will likely accelerate this year. In 2015, as we demonstrated by the yields of our maalamalama investment services, increased volatility of asset prices means that gains can be captured regardless of which direction asset prices move. As long as you are correctly positioned short when asset prices collapse and correctly positioned long when asset prices rise, you can still lock in positive yields by the end of the year.
However, as positive yields are always muted by uncertainty, we expect that in future years, when gold and silver asset prices finally reverse and start moving higher, our yields will continue to positively diverge from the yields of all major global stock markets. Consider that since our inception in 2007, our cumulative yield at YE 2015 for our Crisis Investment Opportunities newsletter was +61.60% while the cumulative loss of the Philadelphia Gold and Silver index over the same time period was a whopping -66.50%. For anyone that merely bought and held all during this period, the losses continued to build every year. Our divergence in yield from gold and silver indexes demonstrates that plenty of times, from our inception in 2007 until today, we have taken adequate measures to profit from banker-induced declines in gold and silver prices. In fact, though we could choose to hide our past mistakes by only discussing our cumulative yields since inception, we instead of list the REAL annual yield of our CIO newsletter every year since inception in our fact sheet (just check the links to our fact sheet at the end of this narrative). Almost none of our competitors are willing to provide REAL returns every year based upon specific buy and sell prices of every single open AND closed position, but instead either just list misleading returns on open positions, or returns “since first recommended”. If we used the “returns since first recommended” model, our returns on more than a few gold and silver assets that we first recommended in 2007, 2008 and 2009 would easily be more than 200% to 800% in some cases. However, we firmly believe in transparency as our transparency about past mistakes we have made enhances the level of comfort our clients have with us. It is a fact that no one in our business is perfect and that every single Chief Investment Officer, no matter how intelligent or how talented, has made mistakes at times during these super volatile markets. However, by demonstrating over the past two years our ability to avoid repeating that mistake and in returning a positive yield last year in a year in which gold and silver mining stocks, as an asset class, performed terribly overall, we believe that we have restored the confidence of our clients in our ability to manage banker fraud and mis-priced, distorted capital markets moving forward. Of course, we would have preferred to have avoided making any big mistakes first and foremost, especially for clients that joined us for one year only in 2013. As long as we are transparent about our past mistakes at maalamalama and we demonstrate the capacity to learn from our past mistakes moving forward, as we capably did in 2015, mistakes can be and will be overcome, especially over the more realistic time period of several years versus one of just 2 or 3 years. And perhaps even more importantly, being able apply what we’ve learned from our past mistakes to reap successes in the future provides us with the necessary confidence, as we move forward in these Central Banker currency wars, to successfully navigate our clients through the Central and Commercial banker implosion of various global capital markets that lurk on the not-so-distant horizon. We understand that often people discard narratives that paint a gloomy but realistic narrative of the current global financial system, but again, merely check the predictions our Managing Director, JS Kim, made in 2015, and how quickly his predictions materialized after he made them, to understand the level of digging and fact-checking about the truth we perform as our standard operating procedure at maalamalama.
In the meantime, mainstream US financial media websites continue to ask stupid questions today like “Can a Strong Jobs Report Stop Carnage on Wall Street?”, even though a possible ramp up of US stock markets on a fabricated jobs report with made-up numbers later today will never last long term. Perhaps, if the US Bureau of Labor releases particularly ludicrous data points today, they may provide a breather for US stock markets today, but they will not stop the fact that US Central Banker fraud has now come home to roost in US stock markets. I guess it’s only a matter of time before we’re bombarded by the same tired “buy the dip” stories about still over-bloated US and Chinese stock markets. In any event, before you fall victim to any further mass media and government/banker propaganda, whether it’s regarding global stock markets or gold, silver and oil markets, here’s our recommendation for the best way to do separate the wheat from the chaff. Go check the author’s predictions from last year, and if he or she got more predictions right than wrong, then go ahead and continue to listen. However, if the overwhelming amount of his or her predictions were wrong and badly wrong, like Harry Dent’s call for $700 gold in 2014 and once again in 2015, then it’s probably time to completely tune that analyst out. Number two, go check that person’s long-term track record if they have one. Look for real returns of all opened and closed positions since inception, not just cherry picked returns of current open positions, or cherry-picked unrealistic returns that have been framed during a specific time frame as to make returns look unrealistically brilliant. To drive home my point, look at this index that soared by 203% in little over a year’s time just 6 years ago? Please fathom a guess of what asset class this index comprised before continuing to read.
I would fathom that very few readers, other than those that have followed us for years and therefore have already seen the above chart in previous posts of ours, correctly guessed the asset class represented by the “framed and biased” +203% gain correctly. The index above that soared by 203% in just over a year was an index comprised of intermediate to large cap gold mining stocks, the HUI gold bugs index. Yes, the same asset class that is universally hated today by all commercial banking financial consultants and that, according to them, will never ever make a comeback. Do you ever remember the mainstream financial media lauding the tremendous rise of this index in one press release, one article, or one interview, when it happened in 2009? Of course not. The mainstream financial media are employed by the same bankers that will frame and report unrealistic 200% gains in US stock markets in recent years but never tell you about 200% gains in gold mining stock indexes when they also happen. Hopefully we are all smart enough to realize that no one in the world has the ability to repeatedly time market bottoms perfectly and to sell at exact market tops in addition to moving to 100% cash during every significant price drop. But these are the parameters assumed by the mainstream financial media every time they report that US stock markets have soared by a couple hundred percent since the S&P 500 bottomed at the apropos level of 666 in 2009. If the mainstream financial media flooded the world with news of the US stock market’s 200% gain in 7 years, then shouldn’t the leading headlines of every single mainstream financial media outlet in 2010 have been the remarkable 200%+ gain of gold mining stock indexes? If one were to only pay attention to mainstream financial media, one would have been led to believe all commercial investment industry adviser achieved real, net cumulative 200%+ gains in US stock market indexes for 100% of their clients within the past 10 to 15 years.
However, what is the reality of this falsely depicted situation? Studies, like this one, have repeatedly illustrated that 89% of fund managers underperform their benchmark index over a period of 5 years, and that 82% of fund managers underperform their benchmark index over a decade’s time. This means that more than 80% of fund managers were likely to fall short of the performance of the S&P 500 index since mid-2007 to YE 2015, and most likely did NOT even achieve the index’s performance of +32.15% during this investment time period. Reality in the commercial investment world is often hugely different than the perceptions they create of false 200% gains in US stock markets that the mainstream financial media repeatedly narrates. In any event, the purpose of the graph above is to help investors to steer clear of the framing bias continually employed by Wall Street and the commercial investment industry when they discuss returns of the US stock markets. After US stock markets eventually replicate and exceed the 2008 US market crash and markets once again start a new recovery from the ashes, I have no doubt that the mainstream financial media will once again pretend as if every single commercial investment adviser advised their clients to move 100% to cash before and during the entire duration of the crash, and will only report yields of US stock markets as if they all started investing at the exact bottom of the market crash. The lesson we need to understand is this: If one were to pretend to perfectly time all exact market tops and market bottoms 100% of the time, one can literally frame the returns of any asset to look spectacular, even assets that have not even come close to producing spectacular returns over the last 15 to 20 years by any stretch of the imagination.
In conclusion, in addition to staying alert and nimble and to remaining patient but NOT passive this year, at maalamalama, we recommend that one spend more time reading alternative media to become much more aware of reality and less beholden to the deception of the commercial financial industry.