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An explosive situation has recently developed in the silver markets that could give you the opportunity to turn $1,000 into $113,551. And I'd like to send you the two-sentence set of trading instructions that will show you how to do it. But you have to get them right away. Because while the set-up is perfect today… it won't stay that way forever.

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Dump Before Trump

The stock market didn't like the latest October Surprise any more than Democrats did.

Last Friday there was a brief, but we think, unmistakable sign that investors overall prefer Hillary Clinton, who has pledged to maintain many of the policies of President Obama.  Or as Donald Trump once described them, "the job-killing, tax-raising, poverty-inducing” policies of President Obama.

On Friday the market sold off after the release of FBI Director James Comey's letter to Congressional leaders regarding emails related to Clinton's private server.

The selloff was sharp, but hardly panicky. In fact, it was short-lived: the S&P 500 has climbed higher, fitfully, since Friday afternoon. As this is published on Monday afternoon, the market is flat.

Maybe the economic report released on Friday had something to do with the market comeback. The Bureau of Economic Analysis reported real GDP increased at an annual rate of 2.9% in the third quarter—beating estimates of 2.5%. That showed the recovery may (these numbers often get revised) have moved from tepid to good. Before the Great Recession the average GDP was about 3%. 

And job growth and wage growth are also good, other fundamental signs investors take to heart.

Certainly we're stomping the Eurozone, which is almost flat lined at 0.3%.

In any case, Friday's quick-twitch reaction to bad news for Clinton indicates the fear many investors have of a Trump presidency. No matter what you think of him as a candidate, there's no question that he is less predictable than past presidential nominees – and investors hate uncertainty.

That Wall Street has factored in a Clinton victory is confirmed by everyone from Citigroup predicting a Clinton victory with a 75% probability, to important prediction/betting markets, such as PredictIt, giving her a victory by a wide margin (though some have nudged down since the Comey letter).

The market clearly has been treading water for weeks. It's arguably overvalued and vulnerable to a selloff. Yet the better-than-expected economic growth and third-quarter earnings reports have kept stocks afloat.

So we think the smart money shouldn't be shocked by a selloff on Wednesday, Nov. 9. In fact, we recommend raising some cash for bargain-hunting in the days after the election.

And remember that stocks have risen during Democratic and Republican administrations, in all kinds of economic and political environments. There's plenty of ways to make money even during corrections, bear markets and sideways markets. At Investing Daily we're increasing our options recommendations to help our subscribers do just that. 

We think if there's a post-election selloff next week, it likely won't last long. Investors love to look at politics, but in the final analysis they look at individual opportunities and value them based on the underlying fundamentals.


Goldman Sachs has terrible news for income investors…

Goldman Sachs just released a study that showed dividend growth last year hit a 65-year low.

This year will be worse, as interest rates rise. But safe income still exists.

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'Cats' Haunt Ameriprise Numbers

Jim Pearce

As the Chief Investment Strategist for Personal Finance, I am happy to report that most of the holdings in our Growth Portfolio have performed well lately despite increasing stock market volatility. That's in large part due to the inherent bias of my IDEAL Stock Rating System towards companies that pay a high dividend, are growing their cash flow, and are already priced at a discount to their sector peer group. But every once in a while one of them under performs the market, with the most recent culprit being financial services giant Ameriprise Financial (AMP).

Last Tuesday, Ameriprise released its quarterly earnings report, which pretty much missed the mark on everything except top line revenue growth. So on Wednesday morning the stock dropped nearly 5%, and has meandered a bit lower since then. Of course, I'd much rather talk about my better performing stocks than a rare dud like this one, but there is a valuable lesson to be learned from Ameriprise  since I think we will see similar situations in the months to come.

For a long time the name of the game for most companies has been growing top line revenue, at almost any cost. Amazon.com has been getting away with it for years, currently trading at more than 600 times trailing earnings. It now has a market capitalization near $400 billion, making it one of the most valuable publicly-traded companies in the world, even though it generates little profit and pays no dividend. However, tech stocks play by a different set of rules where capturing market share today can (hopefully) be turned into profits tomorrow.

But for a stodgy financial services company like Ameriprise where technology has limited ability to leverage results, future profits are sometimes valued at less than current earnings since they must be discounted to offset inflation. And that's where Ameriprise committed a major error. In its rush to capture market share, Ameriprise may have priced some of its insurance products too low, forcing it to take some large impairment charges against earnings this quarter.

Ameriprise added $19 million to its long-term care reserve adjustment, which amounts to 2% of its total operating earnings for the quarter. In addition, the company wrote off "catastrophe losses” of $29 million against its auto and home insurance portfolio, compared to only $8 million in the same quarter last year. There goes another 3% of earnings down the drain. Either a whole lot of people suddenly got sick, crashed their cars and accidentally burned their houses down all at the same time, or somebody at Ameriprise did a poor job of pricing these policies in the first place.

In a conference call with analysts after Ameriprise released its earnings, company CEO Jim Cracchiolo downplayed the spike in catastrophe ("cat”) losses with this sorry excuse: "In line with many industry players we had higher-than-expected cat losses. We're making systemic changes to lessen the impact of cats on our results, including improving cats-related pricing and strengthening the team handling cats claims, including adding more field adjustors. Overall, we are making good progress (and will) bring the business back to historical profitability.”

As someone who spent nearly 30 years as a registered investment advisor and licensed insurance agent, that description is code for "we charged to little in premiums to acquire these long-term care, auto and home insurance policies in the first place, and didn't have the resources necessary to service those policies once they were in place.” That he says the other industry players are apparently afflicted with the same disease doesn't make the management failure any less. 

The lesson of Ameriprise for all publicly traded companies, and for the shareholders that own them, is to avoid increasing top line sales revenue at the expense of the bottom line. Businesses that can grow revenue profitability, even at a modest pace, will be rewarded in this slow-growth economy. But those that can't will be quickly punished, as Ameriprise discovered this week.

(I'd also add that when you have a lousy quarter and your numbers show the cat's out of the bag, first admit you messed up instead of trying to spin red ink into black.) 

The good news for AMP is that it now appears cheap, and could be ripe for a strong rebound when the next set of quarterly numbers comes out in January. Barring a disaster, almost all of its operating metrics should look good in comparison to this quarter. And now trading at only 9 times forward earnings, even a slight gain in that multiple combined with a bump in profits could boost its share price back above the $100 level where it was less than a month ago.


How to Make 113x Your Money on Silver

You may not know it, but silver prices jumped 44% from January to July of this year. If you had had advance knowledge of that increase, you could have turned a $4,400 profit. But you would have shortchanged yourself. Because there was a simple $1 trade available that delivered a stunning $56,400 profit! On the exact same price increase. In the exact same amount of time.

And even that pales in comparison to what's about to happen next. Because silver is about to experience a once-in-a-lifetime mega-boom that could send prices soaring as much as 587%. The window to get in the action is closing quickly, though.

Get the details here before it's too late.

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