With the end of the year drawing near, tax questions are popping up in the Legacy Research inboxes. So, in today’s edition of The Daily Cut mailbag, we address the most common concern we’re seeing.
But before we get to that, our favorite tech expert, Jeff Brown, answers a question from one of his newest fans. It’s one you don’t want to miss… Jeff talks about how subscribers to his Early Stage Trader advisory are guaranteed to make an extra $151,740 in the markets next year…
Reader question: Hello sir. I am thrilled to be embarking on this journey with you.
My question for you is: What account balance should I start with, and how much of that should I risk on a single trade according to your plan for $150K+ in the first year?
– Jim S. (Legacy Research member)
Jeff’s response: Thanks for writing in, Jim.
Thanks for joining Early Stage Trader, and I’m also glad you reached out with your question.
My guarantee is that if traders allocate $5,000 per trade, they will make $151K in 12 months. And I expect we will likely have about 15 trades per year.
But because Early Stage Trader is a shorter-term trading product, we should expect to be in and out of trades frequently.
Roughly, we can expect to have a maximum of 10 positions open at any given time. Of course, this will vary depending on market conditions, how quickly these early stage companies move, and the pipeline of early stage companies going public.
This means that it is unlikely traders will need $75,000 ($5,000 X 15 trades) to deploy across the 15 trades this year. Instead, we can roll gains from our early trades into new trades.
For example, if we hit two doubles on our early trades, that will finance the next four trades without any new money coming out of pocket. In other words, investors can reinvest gains into new trades as they come out.
So I stand behind my $151,000 guarantee. It’s my way of showing readers how confident I am in this system.
But there is one important point I will add…
It’s important we always use proper position sizing. A $5,000 investment in each trade will be manageable and appropriate for some investors, but not others. That’s OK – gains will be the same on a percentage basis.
It’s important that readers are determining their own position sizing based on their own financial goals and financial standing.
But no matter what position size is appropriate for you, I promise there’s a lot to look forward to with Early Stage Trader. Thanks again for joining me.
Jeff outlined his strategy for making an extra $151,740 a year in his Accelerated Profits Summit… And you can watch the replay right here.
The best part is that you can use this strategy in a simple online brokerage account.
Next up, more for Jeff Brown…
This time, Jeff answers a question about investing in 5G…
Reader question: I would really like to know the best industry to invest in to get exposure to 5G.
I hear about the amazing theories of 5G relating to future medical advancements. Would this be a good industry to look at?
I could die a happy man if you could please answer these questions. Thanks a lot!
– Bernard P.
Jeff’s response: Hi, Bernard. Thanks for writing in. And first off, I hope you don’t die anytime soon; we have too much to look forward to. And I have even better news. Wireless technology is already saving lives…
My longtime readers won’t need reminding. But for readers just joining us, 5G is the next generation of wireless network technology. As we’ve demonstrated with our live 5G test, 5G speeds will be exponentially faster – at least 100 times faster than the current 4G networks.
And with that type of speed, some very remarkable technologies become possible: fleets of self-driving vehicles, holographic telepresence, and yes, even major advancements in health care.
5G is more than just fast download speeds on our smartphones. 5G connectivity is being added to cars and trucks, shipping containers, laptops, tablet computers… and wearables with health care applications.
Consider this – the chance of surviving cardiac arrest goes down 7-10% each minute that passes after a person collapses.
Right now, we typically wait until obvious symptoms present themselves – collapsing on the floor, for instance – before we seek emergency assistance.
So, yes, 5G will transform health care in a profound way.
And now, a question about taxes…
Teeka Tiwari provides the answer…
Reader question: Teeka, I’ve seen some bad news about the new taxation policy for cryptocurrencies in the U.S. I have reviewed some of the information on the IRS website, but I feel there is still a lot I don’t understand when it comes to the new regulations.
Will there be some input from you or your team regarding this topic in the near future?
– Genevieve C. (Legacy Research member)
Teeka’s response: We can’t provide tax, legal, or accounting advice. So keep in mind: This is general tax information. You should consult your own tax, legal, and accounting advisors regarding your specific financial situation.
But if staying compliant to the best of your ability is important to you – and it certainly is to me – we suggest you consider ZenLedger.
ZenLedger is a tax software for crypto investors. It makes it easy to import crypto transactions, calculate gains and income, and autofill tax forms.
Further, ZenLedger prepares a number of useful documents such as capital gains and income reports. It’ll keep adding more in the future, too.
It covers all the major crypto and fiat currencies. And it works with major crypto exchanges such as Binance, Bittrex, and Poloniex.
ZenLedger also has a tool that shows which coins are in the black and which are in the red, by exchange. This will allow you to sell losers and harvest tax-loss assets.
This is the only accounting program I’ve found that covers all major coins, all major exchanges, and most major wallets – and provides actual, live customer support.
It’s given me a credible and defendable position to take if the IRS asks how I accounted for my crypto taxes. (Keep in mind, neither PBRG nor its affiliates receive any compensation for recommending this service.)
To learn more about ZenLedger, click here. Come tax season, you’ll be thankful you used it, too.
Last up in this week’s Daily Cut mailbag, Jeff Clark answers an important question about what it takes to be a successful trader… and how not to blow up your trading account…
Reader question: Jeff, when you talked about trading volatility, it reminded me of a story I read about Seth Golden.
It is my understanding he was a manager at Target and made millions shorting the CBOE Volatility Index (VIX). I’m not sure if he still trades the VIX this way, as I know it is risky, but I was hoping maybe you could provide some commentary on exactly what he was doing and why he was so successful with it… for a little while at least. I think he eventually blew his trading account up.
It would be great to get a seasoned veteran such as yourself to give some feedback on this story. Have a great weekend!
– Dallas A. (Legacy Research member)
Jeff’s response: Hi Dallas. I’m not aware of the specific story of Mr. Seth Golden. I am, however, quite familiar with stories of folks blowing up their trading accounts.
It’s human nature.
We find a strategy that seems to work well. We test it out a few times with just a little bit of money. We profit. We gain confidence. And we start placing bigger and bigger bets. Eventually, we decide to stop messing around with small potatoes, and we make the one really big bet – you know, the sure thing that’ll produce all the money we’ll ever need to do everything we want to do for the rest of our lives.
In other words, we start focusing on the reward, and we take our eyes off the risk. We worry more about maximizing our profits than limiting our losses.
That’s when bad things happen.
There’s nothing wrong with shorting volatility – especially when it’s relatively high. Volatility tends to decline over time. And shorting the VIX can be a profitable strategy.
But nothing is 100% guaranteed.
Shorting the VIX was a really popular strategy all throughout 2017. Volatility had basically disappeared from the market. So traders who shorted the VIX made money all year as the index dropped from about 15 to below 10. It was the most consistently profitable trade of 2017.
In order to maximize the gains, traders like Mr. Golden placed bigger and bigger bets. They borrowed money to leverage the trade. They stopped asking, “What happens if this trade goes against me?” and instead asked, “How can I squeeze even more profit out of this position?”
By the end of December 2017, traders had amassed the largest net short position in VIX futures contracts – ever. The VIX was trading just below 10 at the time.
Three weeks later, the index hit 37 – an increase of 270%. IN THREE WEEKS!
That move blew up a lot of accounts. And it’s a good reminder of the 11th Commandment of Trading…
Risk not thy whole wad.
Faithful followers of Jeff Clark will know he learned that lesson the hard way… he blew up his account on more than one occasion.
So, if you’re an investor, don’t make that same mistake… Follow the 11th Commandment, and pay more attention to risk than reward.
That’s all for today… Have a nice weekend.
P.S. Two days ago, 13,841 people tuned in to watch Teeka Tiwari reveal his new strategy for making as much $12,000 a month… and the response was overwhelming.
If you missed it, there’s no need to worry… You can catch a replay right here.
(Important note: That link will be active for the next several days, but there’s a special subscription offer that expires at midnight ET. So I encourage you to watch sooner rather than later.)
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