Harry Hindsight

Sell Sterling Wear Diamonds?

In April 2002 we published a report entitled "Sell Dollars Wear Diamonds." This piece was a detailed explanation of why we were selling Dollars against the Swiss Franc aggressively at 1.6500, now 1.2390, and why we disagreed with the majority of analysts who were then calling for the dollar to remain strong. The formula for working the direction of a currency pair is quite simple:

Trade Deficit/Surplus + Non Speculative Capital flow + Speculative Capital Flow = Direction
Taking the US dollar. We have a trade deficit of $42 billion a month so lets call that -$42. Yesterdays figures from the Federal reserve show foreign purchases of US bonds and agencies of $75 billion so we will put that in the non-spec capital as +$75. As ever the key is the speculative capital or "hot money" as we call it. This money looks to move form currency to currency in search of the greatest total return and is the biggest constituent of the Forex market; work out what the speculators are doing and you can generally work out where the currency is going. If speculative dollar selling is higher than the difference between the two, +$33 billion in this case, then the Greenback will fall.

A trade we put out for members yesterday afternoon is a good example of how important it is to follow the flow. Through our contacts we established that there was a large options related stop at 1.8980 and we placed a stop entry order accordingly, Cable was 1.9015 at the time. When this was triggered cable fell rapidly to 1.8840. This shows how important it is to follow the flow. Due to the way the currency options market works there are times when if the market rises then the options market makers have to buy and if it falls they have to sell. If the volatility price increases they have to do this in bigger amounts hence rapid movements.

Yesterday every Muppet imaginable was on CNBC calling for Cable at 2.00. It seems that all systems and momentum based hedge funds are similarly long. As members know we have been bullish of sterling for quite a while and have made good money from the "proud pound." Market's however are not one way and we know what pride comes before!

It was lovely to see Rolf Breuer, the head honcho at Deutsche Bank, extolling the virtues of Frankfurt on CNBC this morning, telling us how important it is to have such a nice working environment if one is to attract the best dealers. Methinks there's a funny smell here and it's not his aftershave! Having worked for the mighty German bank I think I am able to put this into perspective. Linking the words "German" and "best dealers" is an oxymoron and that is one of the reasons that Deutsche has it's main dealing floor in London. The main reason however is that Deutsche are unable to get their best, and I should add Anglo-Saxon, traders to work there as Frankfurt is such a hole. The Deutsche building is right next to the main park where all the cities drug dealers congregate and was one of the reasons that the whole Anglo-Saxon options team, that they poached from Citibank in 1995, threatened to resign en masse unless the whole desk was moved to London. The most successful dealers left in Frankfurt are the ones with syringes.

Harry

Muppet of the Month

Many thanks to dozens of you who have sent me information on Vince Stanzione but please no more. I have been inundated and it's not good for my health, as I keep falling off my chair from laughing so much. There was I thinking that Darren Winters was a renaissance man but he has nothing on our chum Vincent. A self-styled entrepreneur who apparently "began in hairdressing, and made his fortune in mobile-phones and financial services." Vince allegedly started his journey to becoming a "Master Trader" at the age of 16 as a "teaboy" on the Forex desk at Natwest, yet he strangely left at the age of 18 due to the equity crash of 1987. I was a Forex dealer then and that period was a boom time as we just kept selling dollars and wearing diamonds. Obviously he wasn't a very good teaboy!

Anyway he has obviously improved as he regularly turns a bet of £50 into £5000 and turned £24k into £720k over a 24 month period.He also keeps himself busy, running a plethora of different websites and sending out more mailshots than Readers Digest. He has even found the time to write a book, " How to stop existing and start living." as well as writing a monthly tip sheet called the "Market Monitor" and has even appeared on TV as a guest on "Esther." Add to this all the seminars that he does then the "Teaboy" deserves our admiration for finding the time to keep making shed loads of money trading.

So what has the "Teaboy" learned over the years to become the "best trader there is"? According to his own advertising literature he has "learned from the worlds best traders including Richard Dennis and Russell Sands (Turtles Trading Fame)." Many people have apparently tried to "imitate" his work but they are "nothing but poor copycats trying to make a quick buck selling systems that I threw out 5 years ago." OUCH!!!! Sorry I fell off the chair again. This is all jolly entertaining but I wonder what these "special techniques" are. Fortunately I do not have to wonder too much as I have one of his old seminar books that a member has kindly sent me.

Well it starts off with the incisive strategy of spending less than you earn. Yes readers your £2000 plus journey into the complex world of the financial markets starts with an exhortation to cut down on satellite TV and mobile telephone bills. After all " a little change can make a great difference." Personally a little less padding and a lot less b*****x Vince would make a great difference! Half way through the course book we come to one of the alleged trading system; The Turtle Techniques.

According to Vince the turtle system is:

1. " A long term trend trading system."
2. " A money management system. Using stop losses of 5% to 9% of your money."

Oh dear. Oh deary deary me. "Imitation!" " Copycats trying to make a quick buck." The words stones and glass houses are ringing in my head. Vincent if you are going to try to copy the techniques from www.originalturtles.org then please try and get it right! I could go on at great length into the Turtle system: About using the 20 day breakout of the highest high or the lowest low on the exponential moving averages (something the Teaboy doesn't even cover). I could go into the unit progression method incorporating the Average True Range which is a key part of the Turtle technique (again you don't seem to cover this). I could even bore everyone by going trying to explain the concept of "curve fit" that Turtles use making this system quite unsuitable for amateurs but I won't bother.

The core money management rule of Turtle Trading is never risking more than 2% of your capital on one trade. Not 5% to 9% as you write and certainly not as you say later in the course book: " Say you start with £2500, never let one bet lose more than £500." That is risking 20% you total Muppet!

The inconsistencies in the "Teaboys" course book and advertising literature are astounding. He wants to teach people how to make "£400 per day making small trades that can make £500 plus in less than 30 minutes." How? Turtle trading is a long term trend following system. His course book offers no more than a basic look at the different financial markets and technical indicators. All of this can be found on the internet for free. His teachings on risk management however are not basic. They are completely and utterly suicidal. To be suggesting to amateurs that they should be risking anywhere between 5% and 20% per trade is elevating incompetence to a level not yet seen by Equitable Life.

In conclusion I would like to leave you with a quote from the "Teaboy" himself:

"You can have everything in the world you want, but there is a catch, you have to be willing to do everything and anything it takes."

I wonder just how far Mr Stanzione is prepared to go to get what he wants!

Anyway congratulations "Teaboy" you are our Muppet of the Month and thanks for the entertainment.

Harry

P.S The Turtle Techniques have been published in their entirety, free of charge, at www.originalturtles.org in order to stop the "charlatans and scam artists" who have been mis-selling the system.

Euro Splits

However sceptical one is over the eurozone it has to be admitted that it makes for good fun as well as nice forex movements. The weekend G7 in Florida produced the usual platitudes from politicians, claiming that all parties were in agreement and had a wonderful relationship. Yet as soon as everyone got home to the wife the weekends musings were quickly dismissed as a pina colada fuelled holiday fling. Everyone has got back to business as usual. The Us claim they want a strong dollar, which is true, just not as strong as it is now. Germany wants a weaker euro and lower interest rates whilst the French don't really care as long as they can keep their politicians out of jail for fiddling the books.The Japanese want to keep buying dollars and lending the US money so that they can buy Japanese goods whilst the UK are quite happily chuckling from the sidelines. Today the Austrians and the Swedes, at their own G 102 Group of less significant countries meeting, decided to punish Germany for not being allowed to sit at the big boys table by saying that they are quite happy with the Euro where it is.

Oh what a tangled web we weave when we try and let politicians manage macor-economic policy. There lies the problem with the single currency. You remove the power of the market to punish the mistakes of politicians via freely floating exchange rates, and then the only way to correct those mistakes is by those same politicians, who messed it up in the first place, making the correct fiscal decisions. Surely even the most pro-european would have to agree that the demise of the "suicide pact" has proved that this is a triumph of optimism over experience.

A report from the Morgan Stanley bond desk has highlighted these problems and suggests that we are witnessing what could be the start of the dismantling of the single currency. MS believe that speculators will target the government bonds of some of the less stable eurozone countries resulting in those countries ditching the euro. Should this occur our belief that the "proud pound" will strengthen against the euro ought to be realised as speculators will look for blue chip plays on the periphery of the euro zone such as Norway and good old Blighty.

Many thanks to the readers who have been sending me information on Winters clone Vince Stanzione. In fact I don't think clone is fair as he seems to be getting away with charging even more than "Doji Daz" with £2500 per person for his group seminars. I'm surprised he needs to charge so much as according to him he makes a fortune from trading. I'm curious. I seem to remember a chap with a very similar name who made his money from selling mobile phones and who, when having an account at a firm that rhymes with Cantors (oops), hardly ever traded and when he did regularly lost money. Could this really be the same person? Surely not, but I think I am going to have to take a closer look at this chap and I think I'm going to enjoy it.

Inspector Harry

A Mad World

With the G7 starting today in Florida volatility has increased in the Forex markets. All the short term funds that were selling $/Yen at 105.35 with a target of 102 are now buying their greenbacks above 106.50. All the main banks have stop losses all the way up to 107.20 so hopefully we can see a nice impulsive move higher which we can then sell in to.

Non-farm payrolls will provide a catalyst for the equity market but with the S&P right in the middle of the 1020 to 1042 you can pay your money and take your choice. The SOXX seems to be indicating that a move lower in equities is the play buy a look at the daily and weekly charts shows a classic uptrend channel with the support coming in at 478/480. A break and close below this level is an important indicator and one we will be watching closely.

I hope something interesting happens today as, having just received a tax bill I need cheering up. When one adds this to the fact that the Handbrake insists on watching that programme " I wish I was a celebrity...." then one can understand my general antipathy towards life in good old blighty at the moment. Such programmes make me wonder whether we have the politicians we deserve and that it's time to do a Jonny Rotten and walk out.

One story that did make me laugh though was that the government intends to teach school kids financial acumen. Is it just me who finds this ironic from an administration who after having their wicked way with "Prudence" chucked her for a shop-a-holic "It" girl intent on melting daddy's platinum credit card. Perhaps the government should get previous Muppet of the Year award winner David Thomas to come up with the curriculum. We are still waiting for the FSA to rap the knuckles of Brewin Dolphin after their Head of Corporate Finance admitted to the Treasury Select committee admitted that he didn't realise that increasing borrowing increased risk.

In the syllabus for the IMC exams for running a fund, which makes war and Peace look like a short story guess how much of the course explores such exotic topics such as stop losses and the effects of leverage on a portfolio? Zip..... Nada.......... Niente.......... Not a sausage. You get a 70 odd pages each on regulation, accountancy and tax but god forbid that any hedge or mutual fund trader should have the slightest clue on basic trading fundamentals such as buy low and sell high even if like Brewins you have £14.2 billion under management. You may think I am being churlish but many of the UK life assurance companies who were forced to the FTSE 100 below 4000 will similarly be forced to buy on a break of 4750. Let's be honest my goldfish Squishy knows more about trading than these guys and he's a lot cheaper to feed.

Harry

P.S Squishy says: "Sell British Airways wear diamonds."
He better be right or his name will change to Sushi.

What Now?

With much of the US corporate earnings figures now out of the way this will be an important week. Add to this rate announcements out of the UK and Europe and we have the makings of some nice movements. the only problem is, as ever, working out which way the market will move. Though we remain very sceptical about stock market valuations we are however mindful of the fact that the market is irrational and it is the flow of money, rather than a subjective view of valuations, that will decide the direction of the worlds stock markets.

Flows into equity funds in January have been strong and thus far fit in with our view that the US market will remain buoyant ahead of the US election. The Bush administration, post September 11, showed how adept it was, with the help of their chums in big business, in propping up the equity market. This trend has carried on with last weeks passing of a bill that will limit companies pensions liabilities, saving companies $80 billion over the next two years.

An interesting potential indicator will be the dollar. I say potential advisedly. In 2002 trading equities was easy. If the dollar went down equities followed and vice versa. This correlation broke down last year but there are signs that it might be trying to re-assert itself. The last four weeks have seen a rise of foreign buyers of US Treasuries and this figure on a trailing four week average is now equal to the monthly US Trade deficit. This balance will mean that the Dollars continued fall is far less certain than many commentators would have us believe, and will allow traders such as us some interesting short term opportunities.

One piece of news to keep an eye on is this Avian flu. The weekend allegedly saw the first human to human transfer of the disease in Vietnam and though this is not a major problem yet it could become one and requires monitoring.

Harry

The Glow of Schadenfreude

"All true investing must be based on an assessment of the relationship between price and value. Strategies that do not employ this comparison of price and value do not amount to investing but to speculation." Warren Buffett

I was reminded of this quote after today receiving the usual ADVFN partner offer which urges readers to take advantage of an investment strategy which last year allegedly turned £2000 into £31,000. So what sort of leveraged strategy must this firm be offering? Long Short equity? Risk Arbitrage? Or perhaps a highly geared China fund? No according to ADVFN and the advertiser the somewhat inappropriately named Assett Investments, gambling on the horses is not betting but investing. I have a feeling that the Sage of Omaha would join me in the view that a fool and his money were damned lucky to come together in the first place.

Should anyone wish to learn more about the Investing methodology of Warren Buffett you could do alot worse than buying the "Essays of Warren Buffett." In a world infected with toxic get rich quick schemes, it is a pleasure to hear how the best investor ever has made his money. Full of common sense ideals with not a "power strategy" or Winteresque "cycle of abundance" in sight it serves as a timely reminder how the best plans are often the most simple.

Expect fun and games today in the market. We have important economic data out of the US between 13.30 GMT and 15.00 GMT. Gold is hovering around the psychological $400 level and there are some big stop loss orders accumulating in the Euro/$ market. (Members can see the levels on HarryBuzz). We might well have to wait though until 4.00 pm and the end of day fixing for these stop losses to get triggered but I have a feeling that they will be.

In equities, holding above yesterdays S&P low of 1122 in the S&P will be important. Also of interest will be the behaviour of the Semi-Conductor Index. yesterday it held above $500 but it has fallen 10% in the last two weeks and a further move lower could well start to spook the Bulls.

Thankyou to MoneyAM, and those who managed to brave the weather, for what proved to be an enjoyable seminar. I had been hoping that "Doji" Darren would send an acolyte to heckle me but alas did not happen. I hear that not all is well in Winters World and that some of his colleagues are abandoning ship. It seems that some people have found out that the Winters Investment is as much of an oxymoron as US intelligence!

Herr. Schadenfreude Harry

Year of the Sheep Part 2

Weakness in the semi-conductor index has many traders nervous of holding shares as this is a potential sign that January Effect buying is tailing off. $11 billion dollars went into equity funds in the US in the first 11 days of January and now it remains to be seen whether this trend continues. One trader who certainly isn't nervous is the one at JP Morgan who having received a nice bonus and promotion on Wednesday got laid off yesterday and now has a whopping redundancy check to add to the other.

We had a great many emails yesterday, regarding our Muppet of the Year Award, from "industry professionals" but none from Mr Winters himself. "Doji Daz" makes a great play on his supposed relationships with a number of firms as this gives him credibility. When my colleague Potter attended Mr Winters seminar he made a point of the "fact" that he had trained a number of brokers from Hargreaves Lansdown. We have asked "Doji Daz" to explain this relationship a number of times but as usual he doesn't seem to wish to talk to us. Fortunately Hargreaves Lansdowne are not so shy and their Head of Commercial Development, Savid Rawlings, has today made the following statement:

" Darren Winters has never trained any Hargreaves Lansdown staff and our only involvement was exhibiting alongside a number of other brokers and organisations at a couple of his seminars. We have never and will never have any commission sharing arrangement in place with Mr Winters or his company. Hargreaves Lansdown took a decision after attending a couple of events that the quality of the event was such that we did not wish to be associated with the event, the Winters Investment Network or indeed Mr Winters himself. We still hold this view. We have asked Mr Winters formally and informally on several occasions to stop making the false claim that he has trained Hargreaves Lansdown staff."

It looks to us like "Doji" has been telling porkies and that if anyone who purchased a course, after attending a free seminar in which they were misled, can quite reasonably ask for their money back. My colleague Potter is devastated at this news. Ever since attending the course he has been part of the "cult" that is Winters. He has been treading the path, that will lead to the keys, which will open the doors to perpetual wealth and happiness. The poor chap has only just realised that the path led to Darren Winters wealth and happiness rather than his.

Harry

Year of the Sheep Baaaaaaaaa

Happy New Year. Yes today is the start of the year of the Monkey and those born over the next 12 months will be skillful and inventive. As the future is undoubtedly chinese we have been working according to the chinese calendar and will therefore award our Muppet of the Year award for 2003 or as our oriental friends say the Year of the Sheep.

Let's cut straight to the chase.There were really only two candidates. Well to be honest there was only one as due to on going exams and authorisations it really is sensible not to mention the other one and what I think about them. When one considers that last year was the Year of the Sheep then the only winner of our prestigious award can be The customers of Darren Winters. Yes last year if you paid to attend a course by the self proclaimed "leading investment speaker, writer and trader" and general all round renaissance man then you can at least keep comfort in the fact that you have won a prize from us. OK granted this may not make up for the money you have wasted on his course and whatever you lost trying to trade his "power strategies" but hey it's better than nothing. ( And if you have been writing systematic covered calls then nothing, or less than nothing, is quite possibly what you have.)

It's nice to see, or rather hear, Darren back on the airwaves advertising his free seminars that will set you on the path becoming an "investment millionaire" just like him. I know some people have baulked at this phrase as they believe that "Doji Daz" couldn't even get a job at Standard Life. I however can see where he's coming from as he obviously invests alot of time giving investment seminars and one can hardly expect anyone to have the time to trade when they spend the whole time preaching.I am however interested to know who are the people he is referring to when he says he is "praised by industry professionals?" I would love to know which "professionals" he is talking about. I will post our previous newsletter about this at the bottom of this page but I would like to finish this with a few questions. I know that Darren reads this as indeed do industry professionals:

Darren you claim in a number of letters you have sent recently that criticism against you is based on jealousy. You claim that you are an investment millionaire and lauded by your peers. Prove it. How about a debate in front of your peers?

Next weeks Money AM exhibition, would be a good place, and you can present your views and assertions to a knowledgeable audience rather than a bunch of lambs who seem to go willingly to the slaughter. If this is not convenient I am happy to arrange this at a time that is and what is more I will pay for the renting of a venue.

FSA. When are you going to act on the report that you have had since November on this guy? I suppose that considering they are still investigating CSFB from 1995 we will have to wait for the next year of the Monkey!

Harry

*

" It is naturally the semi-sucker who is always quoting the famous trading aphorisms and the various rules of the game. He knows all the don'ts that ever fell from the oracular lips of the old stagers, excepting the principal one which is Don't be a Sucker! "

This quote is taken from the finest book ever written on the financial markets, Reminiscneces of a Stock Operator. First published in 1923 it remains the favourite of traders and hedge fund managers all over the world. I myself have learnt many lessons from it and when I was running market-making desks, at a number of investment banks, I used to insist that the traders read it; or atleast the literate ones! The primary lesson and my first cardinal rule of trading/ investing is Don't be a Sucker.

We have been having a great deal of fun with Darren Winters over the last few weeks and indeed he has been receiving a great deal of attention in the Guardian over some of his past dealings. I don't wish to go into his past dealings but for those who are interested the links are provided below:

http://www.money.guardian.co.uk/investments/alternativeinvesting/story/0,1456,791711,00.html

http://www.guardian.co.uk/guardian_jobs_and_money/story/0,3605,1055201,00.htm

http://money.guardian.co.uk/scamsandfraud/story/0,13802,1070405,00.html

We sent Potter to a free Winters Seminar last week and DW dismissed the Guardian's articles as being initiated solely due to jealousy of his success. I am all for people being successful, however, I believe Mr Winters, and other evangelical financial speakers of his ilk,are dangerous. Mr Winters offers to teach people how to become very rich. Here is what he says he will teach people in his own words:

1. How, by spending just 1 hour a year you can use a method of investing that has averaged over 20% annual return for the last 27 years!
2. How your investment money can generate you a regular monthly income.
3. No prior investment knowledge needed.
4. How to maximize your profits in up, down and sideways markets.
5. How to minimize your risk and safe guard your investments.
6. The 4 golden rules that every successful investor should know.
7. How to evaluate which companies have the highest growth potential.
8. 3 Essential skills to knowing what to buy, when to buy, and when to sell.
9. Exact steps of how to trade one of the most profitable power strategies known.
10. Proven stock market strategy that wins 86% of the time

During the Seminar Potter tried to play dumb and asked Mr Winters "innocent" questions. However my colleague is not a very good actor and as well as being a bond and derivatives trader for 10 years at the likes of Lehman Brothers, HSBC and RBS he has a BSC in Economics and Finance and the Investment Management Certificate. Mr Winters weasled out of answering his questions and has declined to answer questions we have sent to his,and his personal assistant's, email addresses. Here are the questions that we would like answered:

1. The method of investing you mention that has averaged over 20% a year for 27 years bears a striking resemblance to the figures of Warren Buffett's Berkshire Hathaway fund. Buffetts whole investment approach is based on studying and thoroughly understanding his purchase candidates. How can you possibly suggest that this method takes only one hour a year?
2. This brings me nicely to my second question. One of your "Power Strategies" is selling covered calls, a process where one writes an option against an equity holding. This "yield enhancement" strategy involves using options something that Warren Buffett implicitly steers clear of. Does this not contradict your using his investment methodology?
3. You, and others, advertise this covered call strategy as a way of making guaranteed monthly income. May I bring your attention to a report from UBS who are the biggest players in the derivatives markets and who spend tens of millions of pounds a year on options reasearch; I know as I used to work there. In their report on "Yield Enhancement" strategies, or Covered Calls, a report that I might add involved detailed testing they conclude: " Systematic option writing on equity holding does not work. We recommend investors match observations in the option market with their active view on the underlying security. Our tests show that negative excess returns of systematic yield-enhancement strategies when compared with holding equity are much larger than positive excess returns. In addtition, there are many outliers which are all negative. This is because negative gamma works against the investor in erratic markets." Ok Darren, as I doubt you understand that I will precis it for you. The biggest players in the derivatives market say that writing covered calls does not work over the long term and rather than making a guaranteed return actually loses money, especially in volatile markets. Your comments please?
4. In your seminar you mention training people from the London Stock Exchange, Hargreaves Landesdowne and Halewood International. I am not aware that any of these firms actually trade or invest but rather act as intermediaries or brokers. Have you ever trained anyone who actually trades professionally?
5. I am very interested in you relationship with Hargreaves Landesdowne. Do you receive any commissions from any trades that your customers execute with them? And when I say commissions I also mean "soft" commissions where the firm might agree to pay for marketing and other administrative costs. Why do you take a broker from HD with you to your monthly follow up meetings for members, well?
6. In your seminar you brought up a slide with a number of risk reversal patterns. You said that this information alone was woth £1000. Cannot ALL of those patterns plus many more be found in John Murphy's book "Technical Analysis of the Financial Markets" for the somewhat more reasonable price of £35?
7. You claim to be a full time tarder and to make 100's of percent a year. With whom do you trade? And though I am sure you would not want to show details of the account, using the excuse that your positions are confidential, how about you ask the company to release a statement from their Chief Financial Officer, confirming your percentage gains?
8. I really am interested in the hedge fund you propose to set up. As I am setting one up at the moment I would love to know the following: You are not regulated and you need to take the Investment Management Certificate before you can. When do you propose to take this? You say that a company is going to put £30 million into it and that rather then mess about making 25% a year you will make hundreds of percent a year. What instruments do you propose to trade to make these returns and I'm sure the leverage needed to make such returns is not only unrealistic but quite frankly unattainable. Please which bank is going to act as your Prime Broker and will allow you such gearing?
9. This is my final question and probably the one which should be most relevant to the Financial Services Authority. Are you not making unrealistic claims? And in so doing and letting a bunch of amateurs loose on the options market, are you not leaving your members open to massive losses?

Should Darren Winters wish to reply, as he has so far failed to do so, we would of course be willing to publish his response. We are not jealous of his success but merely think he is talking a load of b*******s, and a load of dangerous b******s at that!

Harry

The Drugs Don't Work

With the G10 ministers meeting in Switzerland this week we can again expect the Forex markets to lead the way in terms of volatility. Traders are looking for the Dollar to be "talked up" though quite whether words are enough to stem the tide of greenback selling remains to be seen. Sterling continues to hold up well against the Euro and on a trade weighted basis and a breakout through the 0.6910/20 level could lead to a further extension. The equity markets will be interesting this week and with many traders having sold shares after the worse than expected US payroll figures of Friday. Should equities continue higher this week this will both squeeze out the shorts as well as re-enforcing the upward trend. Remember that when a market moves against the prevailing economic data, this is a very powerful indicator.

Much of the New Year buying has been led by January effect buying in the semi-conductor stocks. The US fund managers sold these stocks in December and have been picking them up again all year. If this January buying is to falter it will be in the semis first of all so as ever we will be keeping an eye on these via the SOXX. Updates on this are available for members via our Harry Buzz alerts portlet.

Living in London it is very easy to get depressed. What with exponentially increasing bus and tube fares, crippling council tax rises as well as the usual nationwide array of stealth taxes that remain about as subtle as the 3rd US expeditionary force at a meet and greet session in downtown Tikrit. However there is good news.According to the Daily Telegraph the prices of illegal drugs have crashed since Labour came into power in 1997. Cocaine, heroin and cannabis are apparently 29% cheaper so even though many people can no longer afford to live in the capital we can at least go and get stoned so we don't give a damn!

Harry

It's A Mad World

"Sell Dollars wear diamonds" is the rallying call wherever you look. The newspapers and TV stations must be right surely, especially when they have such learned professionals as David Bloom telling you where it's going. A massive stop loss trigger yesterday at 1.2800 has caught the market out, well most of the market because we shorted yesterday at 1.2797. It was a classic running of a stop loss; buy a large amount to trigger the order and then cover the order from your own book, allowing the rest of the market to get long in anticipation of further buying which never materialises. Sweet. With the market still long euros and the EU commission today calling the tinkering with the "suicide pact" illegal, we are looking for a reasonable correction in the dollar, possibly / hopefully to 1.18/1.20.

Considering these Euro tensions one must ask what planet Tony Blair is on by setting 2007 as the entry date for the UK into the single currency? Perhaps he has decided that this particular circus does not have enough clowns already. I do understand where he is going though with taking Red Ken back into the Labour Party though, as they are so well suited. This year my tube fare has gone up by 25% and the corresponding bus journey by 42.85%. This is after the congestion charge which was supposed to raise extra revenues as well as forcing more travellers onto public transport, thereby further increasing revenues in a supposed virtuous "double bubble." What we are left with however is rampant price inflation for a service which remains poor and with a workforce who insist on going on strike unless they are allowed to play squash on sick days.

Perhaps this is all part of a Tony Blair master-plan to take us into Europe. He knows that the public don't want to join the single currency so he wants to make life so expensive and miserable here that we all move to Europe instead. And while I'm having a rant what the hell are the Daily Mirror up to? Let's be honest, as lovely as she was Diana did go through a period when she became a tad "Dagenham" (beyond Barking). To even give credence to the conspiracy theory surrounding her death whilst making Charles out to be Dr. Evil is sad.

And another thing.........No I think I will stop there for the moment.

Harry