Moneytalks “How to Trade” Workshops Moneytalks

1. Moneytalks “How to Trade” Workshopswww.Moneytalks.net Kamloops / Kelowna / Surrey May 18, 19, 20 Victor Adair www.VictorAdair.com

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

3. 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

4. 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.

5. 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!

6. 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!

7. 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?

8. 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)

9. 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?

10. 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

11. US 10 Year Note Yield (1980 to Present)

12. Eurodollar discount price 1996 to present

13. S+P 500 Stk Index 1996 to present

14. DJ world stk index 1996 to present

15. DJ Shanghai Index 1996 to present

16. Apple 1996 to present

17. Apple 2010 daily

18. Goldman Sachs daily Jan 2008 to date

19. Teck daily Jan 2008 to date

20. Potash weekly1996 to date

21. Gold weekly1996 to date

22. Gold in terms of Euro weekly 1996 to present

23. Gold in terms of crude oil weekly 1996 to present

24. Copper weekly 1996 to present

25. Copper daily 2010

26. Crude oil weekly 1996 to present

27. Crude oil daily 2010

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

29. Canadian $ weekly 2003 to present

30. Euro currency 2003 to present

31. Euro currency in terms of CAD weekly 2007 to present

32. US $ Index weekly 1996 to present

33. Euro currency in terms of Japanese Yen weekly 1996 to present