Political watchers cheered at the fact that populist leader Geert Wilders was not able to record a victory at the Dutch elections earlier this week. Incumbent liberal prime minister Mark Rutte was more or less given a new mandate. It is very likely that he will continue an economy policy which stimulates international trade and entrepreneurship. Rutte acknowledges the dependence of the Netherlands on good relations with its neighbors and other European nations. The likelihood of four more years of Mark Rutte as the leader of the Netherlands will bring some rest to the European Union. But this was only the first test to the European project. Next stop are the French elections, which appear to pose an even bigger threat to Europe. By the time we have reached the German elections in September, everything might be different. To investors, 2017 will be a year filled with uncertainty.
Yesterday, investors marked time after the Fed decision on Wednesday. All major US indices retreated slightly, losing 0.1% on average. Volatility eased further: the VIX is creeping closer toward 11 points. XIV ETNs made another 2% gain. All of our models profited.
Danny Daredevil‘s RSS improved to 232% and its average annual return stands at 170%.
Adventurous Anny‘s return improved to more than 7%. Solid Suzy‘s and Lazy Larry‘s returns are approaching 10%. The AAR’s of Anny, Suzy and Larry are still at unrealistically high levels of 900% and higher. We will report on those once these start stabilizing at more realistic levels.
RSS = Return Since Start | YTD = Year-To-Date | QTD = Quarter-To-Date | AAR = Average Annual Return
Two of our models gave a trading signal at the end of yesterday’s session: Danny Daredevil and Adventurous Anny. Danny switched from XIV ETNs to UVXY ETFs and Anny sold her XIV ETNs for cash at the opening of today’s session. Solid Suzy and Lazy Larry keep XIV ETNs in their portfolio.
René’s Reflections @ Friday: The Magic of Growth
Let it grow, let it grow,
Let it blossom, let it flow
In the sun, the rain, the snow,
Love is lovely, let it grow
At the age of ten, I organized ‘René’s Sunflower Competition’. I was (and still am) very much impressed by nature, and by sunflowers in particular. Come to think of it: to plant a seed that is smaller than your fingernail, that weighs almost nothing, and to see how it turns into a huge flower, reaching three times your height, with a stem as thick as your wrist, in just six or seven weeks time. Isn’t that pure magic? And every flower can produce as many as 2,000 new seeds. This means that, starting with one seed, you could end up with no less than eight billion seeds in just three years time. That is more than enough to give one sunflower seed to every person on this planet. The Magic of Growth caught me at age ten.
So, I invited every boy and girl in the neighborhood to plant one or more sunflower seeds, to report me back the length of the sunflower as soon as it reached its maximum height, and last but not least: to spread the word. The winner was to receive ‘a non-disclosed prize of unknown value’. In spite of this rather vague promise, or maybe even thanks to it, the number of participants exceeded my expectations by far. Two months later, there was a tremendous profusion of sunflowers in my neighborhood. Everywhere you looked, you could see the beautiful, gigantic, yellow-orange flowers, reminiscent of the Mediterranean countryside. I wondered: “Was this all the result of this tiny little idea of mine?”
I was too young to realize, but I was unknowingly performing an interesting experiment. Purely by chance I had just created a number of preconditions that had made this competition succeed beyond my hopes. First of all, participating was as easy as it gets: plant a sunflower seed. Secondly, by inviting everyone I knew, and to encourage them to spread the word, I maximized the number of participants. Thirdly, by being vague about the prize, I may have unknowingly added an element of mystery and surprise that worked as a powerful trigger for many to join the competition. And fourth, I was so enthusiastic about it, I guess it must have been contagious somehow. It was then, I started realizing the importance of enthusing others in order to get your idea across.