Moneytalks “How to Trade” Workshops Kamloops / Kelowna / Surrey May 18, 19, 20 Victor Adair

Outline Part One Definition of trading Motives, objectives, opinions, consequences Learning how to trade Part Two Charts I watch

This is not a school This is just me talking about my ideas, my way of looking at things Perhaps you will get an idea that will help you

Definition of trading To be in the right thing at the right time Not (necessarily) day trading To move from one asset to another or to cash To be short in a down market Everything is a spread Learn, think, see, assign probabilities, manage risk, act, sit.

Motives for learning to trade It’s necessary to learn how to look after yourself Zero returns on cash You can trade from anywhere The world is changing very fast - get free from your old opinions It’s better than working!

Learn to think like a trader What’s done is done – what can you learn from it – what are you going to do now? Opinions are necessary – and dangerous – why do you believe what you believe? Why Buy often means Sell Psychology is more important than math Look for the relationships between markets Anticipate – then wait for confirmation!

Opinions Credit Boom = Asset Boom + Risk Not an ordinary recession – a post bubble credit contraction More money borrowed than will ever be repaid – lenders and borrowers less willing Authorities launched massive stimulus to reflate economies Inflation or Deflation? Something big breaks – the Euro?

Opinions Market psychology swings between willingness to embrace risk (whistling past the graveyard) and trying to escape from risk Musical Chairs: everyone (?) knows there’s danger, but they think they can avoid it Capital moves back and forth between the center (safe) and the periphery (risky)

Consequences Massive and growing Gov’t debts and deficits – who pays? How to they pay? Raise taxes? Cut services / break promises? Default? Inflate away? Rising interest rates as investors shun debt? More gov’t in your future? Welcomed by who?

What am I doing? Semi-retired, managing my own money Savings: very conservative, liquid Trading accounts: very little leverage No debts, no assets 40 years of trading experience and trying to learn more Re-examine everything, protect myself from the government Objective: maintain and grow my purchasing power while managing risk of loss; maintain independence, mobility

US 10 Year Note Yield (1980 to Present)

Eurodollar discount price 1996 to present

S+P 500 Stk Index 1996 to present

DJ world stk index 1996 to present

DJ Shanghai Index 1996 to present

Apple 1996 to present

Apple 2010 daily

Goldman Sachs daily Jan 2008 to date

Teck daily Jan 2008 to date

Potash weekly1996 to date

Gold weekly1996 to date

Gold in terms of Euro weekly 1996 to present

Gold in terms of crude oil weekly 1996 to present

Copper weekly 1996 to present

Copper daily 2010

Crude oil weekly 1996 to present

Crude oil daily 2010

Dec 2010 Crude minus June 2010 crude : the “cost of carry spread”

Canadian $ weekly 2003 to present

Euro currency 2003 to present

Euro currency in terms of CAD weekly 2007 to present

US $ Index weekly 1996 to present

Euro currency in terms of Japanese Yen weekly 1996 to present