John Paulson famously made a cool US 3.5 billion in 2007. He was among the few who had seen the housing boom was built on sand and bet against it.
How did he see it.
In a Wall street journal interview, I found this Paulson quote
“Where is the bubble we can short?” He was asking his staff. They found it in housing.
I think that is the one example on how to make money. Find a bubble and short it!
In the same interview Paulson gave a vague assessment of the market
He’s also betting against other parts of the economy, such as credit-card and auto loans. He tells investors “it’s still not too late” to bet on economic troubles.
Not to fast that was way back in January 2008.
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\\ tags: Auto Loans, Bet, Credit Card, Economic Troubles, Economy, Housing Boom, How To Make Money, Investors, John Paulson, Market Predictions, Quote, Wall Street, Wall Street Journal
2009 has to be the year of commodities. If you are a follower of trend following you must have made lots of cash by trend of gold, Silver & Platinum.
Look at this 2009 Price trends of this metals
2009 Gold Price Trend – up 34%
2009 Silver price trend – up 63%
2009 Platinum price trend – up 56%
2009 Palladium price trend – up an impressive 98%
If your mind was focused on the falling prices of real estate & non-starter stock market recoveries, you might have missed this commodities bull.
Should investors jump in? No! I don’t think just because this metal commodities have done well in the past they will continue doing well.
Strategy for making money in Metal commodities.
Whatever goes up, eventually comes down, one strategy is to focus on shorting the metals or sell the futures contract.
Strategy two, only for the seasoned pro, if you know how to play the speculation game keep buying the futures contract.
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Warren Buffet is a contrarian investor. So who is a contrarian investor? This article explains / defines a contrarian investor?
Contrarian Investor Explanation from Warren Buffet.
A great way to make money is to go against the crowd. “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful,” Buffett explained in a 1986 letter to shareholders.
To put it simply a contrarian investor is an investor who goes against the popular direction. When the majority are buying into an investment he is busy selling, when the majority are selling he is buying.
So, how does a contrarian investor make money.
When the stock market is unpopular like during a bear market, the value of stocks tend to decline and most investors are selling. This is the time a contrarian investor invests, buyin cheap stocks. When the bull market returns and stocks are popular and everyone is getting in, the demand for stocks pushes stock values higher and higher and this the time a contrarian investor start selling the shares he had bought when everyone was selling.
To make money as a contrarian investor you must have a good timing of the market, be it stock market, bond market, futures market, commodity market and even real estate. You must understand markets work in cycles of bear market and bull market; markets go up and down. Buy during the bear market and sell during the bull market.
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One great quality of offshore investment frausters / con artist is that they are great sales people.
Although a good number of offshore investment schemes are secure especially when you deal with legitimate international banks and investment funds a good number are duds out to fleece investors
Signs of Offshore investment scums
Look at this classic warning signals in a dud offshore investment advertisement
1.Secrecy,
2. Promises of unrealistic investment returns returns of 30% – 40%
3. Special tax advantages,
4. Lure of grand properties in foreign locales.
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The major disadvantage of offshore investment is the cost associated setting up an offshore investment.
Offshore Accounts are not cheap to set up. Depending on the individual’s investment goals and the jurisdiction he or she chooses, an offshore corporation may need to be started. Setting up an offshore corporation may mean steep legal fees, corporate or account registration fees and in some cases investors are even required to own property (a residence) in the country in which they have an offshore account or operate a holding company. Furthermore many offshore accounts require minimum investments of between $100,000 and $1 million. Businesses that make money facilitating offshore investment know that their offerings are in high demand by the very wealthy and they charge accordingly.
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Switzerland offshore centre has offshore banks licensed and supervised by the swiss government.
The economy of Switzerland is one of the world’s most stable economies. Its policy of long-term monetary security and bank secrecy has made Switzerland a safe haven for investors, creating an economy that is increasingly dependent on a steady tide of foreign investment.
To open a bank account a depositor is given a special number that acts as your ID. The bank accounts are known as numbered accounts.
For a full list of of banks in switzerland follow this link
Switzerland offshore banks.
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Andorra is one of the European tax free jurisdictions.
Benefits of Andorra Offshore Centre.
Total privacy – offshore bank accounts and numbered accounts held in Andorra are said to be exceptionally secure, secretive and private. Only you and your God will know of your affairs.
Zero taxation for individuals and companies – Tax avoidance is not really considered a crime in the nation, however money laundering is, and Andorra was forced to sign up to the EU Savings Tax Directive but elected for the withholding tax option.
Cost of Opening an Offshore bank in Andorras
Although income is not taxed investors pay the following cost to when they open an offshore bank account in Andorra.
- Annual registration fees
- Municipal rates
- Property transaction taxes
- Sliding scale capital gains tax
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Currency diversification is spreading your investment across different global currencies such as sterling pound, yen and the Euro.
Reason for currency diversification
For decades, the U.S. dollar has been losing value in relation to stronger currencies. For instance, in 1970, a U.S. dollar would purchase approximately 4.5 Swiss francs. In September 2003, the dollar purchased only 1.4 Swiss francs. While U.S. investors can purchase foreign currencies through a few U.S. banks, offshore banks generally offer higher yields, lower fees and lower minimums.
An investor can deposit and invest his/her money in an offshore bank that offers a higher interest rate than offered in the US.
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I just got got the following email in my in-box attacking the idea stock market deliver? big returns in the long term. It describes how investors end up losing money in the long term.
1997 – Child received $5,000.00 from grandmother’s estate. Invested with Investment Co. 1
2000 – $5,000 investment at $4200.00 – Taken from Investment Co 1 and put with Investment Co 2
2003 – $5,000 is now $3,000.00.
Taken from Investment Co 2, child’s parents added $2,000 to bring same up to $5,000.00.Given to Investment Co 3 (after being advised about the strategy of dollar averaging)
2009 – $5,000.00 Investment is now 12 years old. Worth $5300.00.
Most of us can’t get our heads around six and seven figures but all of us can see what happened to this $5,000.00. Shows what fools we’ve been to believe the blather from the “stocks are great”, crowd. The only people who made money on this kid’s investment were the Bernie Madoff’s etc who charged the child and his parents for “investing” for them. The family would have been better off putting the money in a tin can in the dog house.
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Bear markets provides investors with opportunities to make money by shorting shares, commodities whatever your investment.
In a bull market an investor buys share hoping to sell in the future at a higher price in the same way an investor who understands shorting a market sells borrowed shares hope they fall in price when the do he buys back the share and makes a profit from the difference.SO
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