Blood in the Streets · Investment Profits in a World Gone Mad by Davidson, James Dale -- Read -- Imperial Library of Trantor

Index

Blood in the Streets: Investment Profits in a World Gone Mad Jacket CONTENTS ACKNOWLEDGMENTS INTRODUCTION

MORE THAN A TRADING PRINCIPLE ANOTHER GREAT DEPRESSION? THE LATEST NEWS . . . THE FIVE APPROACHES TO INVESTMENT Random Trading Technical Trading Three Levels of Fundamental Information TECHNOLOGY AND YOU FORCES AND INDIVIDUALS IN HISTORY IT SOMETIMES PAYS TO THINK ABSTRACTLY WHAT REALLY MATTERS The Erosion of Power: Ominous Parallels Why Upheavals Are Depressing Other Parallels WHY WE ARE PUBLISHING THIS ANALYSIS BECOMING A BETTER INVESTOR INVESTMENT IS A REALITY TEST THE LAW OF COMPENSATION CYCLES UNPOPULAR TRUTHS FINALLY . . .

The Megopolitics of the Pox Britannica

A SHOWDOWN IN THE DESERT THE MEGAPOLITICS OF POWER A MILLION DOLLARS OR A MACHINE GUN? THE PAX BRITANNICA ALWAYS AN INVESTMENT IMPLICATION THE MAJOR FACTORS IN THE POWER GAP WHY THE OFFENSE CANNOT DOMINATE FOR LONG DEFENSIVE DOMINANCE MAY LAST LONGER DEFENSE DOMINATES TODAY FLUCTUATIONS IN THE POWER EQUATION COSTS OF PROJECTING POWER PLUNGE THE AWARENESS GAP IMPORTANT LESSONS BRITISH ALSO HAMPERED BY CONCEPTUAL LAGS CONCEPTUAL GAP CLOSES POWER EQUATION REVERSES INSTABILITY AND DEVOLUTION SO WHAT? “THE PAST IS PROLOGUE”

The Long Coincidence: American and British Powerin the World Economy

FORTUITOUS CIRCUMSTANCES THE EXTRAORDINARY POWER OF THE UNITED STATES COMMUNISM IN RUSSIA STRENGTHENS U.S. ADVANTAGE MISLEADING LUCK Pure Coincidence Benign Neglect The Canadian Hostage and American Foreign Nonpolicy Common Heritage Economic Connections THIRTY YEARS OF CHAOS THE NEXT TIME AROUND

The End of the Pox Americano

THE DYNAMICS OF DECLINE Illusions The Logic of Disorder MISLEADING CONCLUSIONS THE CHANGING CHARACTER OF INSTABILITY THE COLLAPSING SCALE OF EFFECTIVE WEAPONS NO V-DAY OVER TERRORISM ELECTRONIC FEUDALISM? THE END OF THE PAX AMERICANA Frontier Order . . . And Frontier Disorder OIL AND THE POWER EQUATION CHANGING THE RULES ON OIL Why the United States Could Not Stop OPEC The Death of Anti-Communism WHY EVERY BUSINESS WAS NOT TAKEN LOCAL “PARTNERS” A CAUTION ON MULTINATIONAL CORPORATIONS POWER TURNED AGAINST PROGRESS CAPITAL IS RETREATING TOO Parallels with the Past

The Coming Debt Default

THE MEGAPOLITICS OF DEBT THE LOGIC OF DEFAULT THE LONGEST POKER GAME IN HISTORY The Weakening Mexican Position Profits from Close Calls THE DAY THE MUSIC STOPS What Comes After Default? AFTER DEFAULT

The Twilight of Communism

GOVERNMENT BY LONG ISLAND LIGHTING HENRY FORD, THE STEPFATHER OF COMMUNISM THE TECHNOLOGICAL TREND REVERSES FUNDAMENTAL FLAWS Soviet Military Output Greater Profits from Small-Scale Production DRAMATIC CHANGES AHEAD The Economic Impact of Communism Foreign Capital and Russian Growth Exploiting the Workers RUSSIA STUNTED BY LOSS OF CAPITAL MARKETS COMMUNISM IN RUSSIA PRESERVES U.S. SUPREMACY REFORM OF COMMUNISM IS DEFLATIONARY Warlords and Soviet Agents Killing the Landlords The “800” Leftists Go Wild Cautious Reforms That Worked Moving Toward Capitalism Hong Kong Leftist Power Remains PROSPECTS FOR REFORM IN RUSSIA Gorbachev SUMMARY AND FURTHER IMPLICATIONS OF COMMUNIST POLICY SHIFTS Depressed Agricultural Prices Downward Pressure on Prices and Wages Effects on Monetary Policy Those Who Will Benefit Dangers of Reaction STRATEGIES FOR INVESTORS To Protect Yourself COMPANIES THAT MAY BENEFIT FROM OPENING OF COMMUNIST ECONOMIES SPECULATIVE WAYS TO PROFIT

Monetary Instability and Megapolitics

INFLATION BREEDS DEFLATION THE QUANTITY THEORY OF MONEY CHANGES IN THE SUPPLY AND DEMAND FOR REAL GOODS POLITICAL INFLUENCES ON OUTPUT The Megapolitics of Money Peace and Paper Money WANING HEGEMONY AND GOLD THE THERMOSTAT EFFECT Shocks to the System Rising Costs as Hegemony Declines Inflation: a Symptom of Deeper Instability Parallels with the Past Megapolitical Crisis Preceded Money Contraction OMINOUS PARALLELS CAN DEFLATION BE AVOIDED? BAILING OUT A BANKRUPT WORLD? OFF-BALANCE SHEET LIABILITIES IF A LIQUIDITY CRISIS HIT . . . “SERIOUS” COUNTRIES CANNOT AFFORD SERIOUS INFLATION DAMAGE CONTAINMENT, NOT WILD REFLATION DEPRESSION MAY START IN JAPAN EXPECTATIONS MATTER CONCEPTUAL LAGS AFTER THE NEXT CRISIS

Cycles of Progress and Decline

MEGAPOLITICAL CONDITIONS AS THEY ARE—AND MAY BE THE REACH OF TECHNOLOGY More Implications of Technology Product Cycles and Innovation “Creative Destruction’’ Competition and the Product Cycle WHAT NEXT FOR THE AMERICAN ECONOMY? What Is the Evidence? Where the U.S. Stands Today A Dwindling Capacity to Innovate PRODUCT CYCLES AND STOCK MARKETS PATHS AMERICA MAY TAKE “Those Who Can, Will Not, and Those Who Will, Cannot” “The Economy Grows at Night, While the Politicians Sleep” CONSEQUENCES OF DECLINING SCALE ECONOMIES Wider Income Gaps Middle Managers Superfluous Higher Profits for Small Business Enhanced Demand for Luxury Goods HIGHER SAVINGS—MORE DIFFICULT INVESTMENT Fewer Checkpoints on Innovation SMALLER SCALE MEANS LESS SEVERE DEPRESSION? A LAGGED ADVANTAGE IN INFORMATION MAJOR BREAKTHROUGHS ON THE HORIZON Technology Defines Raw Materials The Decline of Natural Resources THE INFORMATION REVOLUTION AND EMPLOYMENT BEYOND BULK TECHNOLOGY “AND FORMER TIMES ARE PASSED AWAY’’ ROOM FOR OPTIMISM FINALLY . . .

The Coming Real Estate Crash

LOOK BEYOND THE OBVIOUS EMOTION IN REAL ESTATE INVESTMENT Don’t Argue with Success? The Trap Is Set DISASTER NO. 1: FARMLAND Stepped-Up Foreclosures Inevitable Foreign Sales Tumble Farm Income Must Decline Triage Seventy Years of Falling Prices New Technologies DISASTER NO.2: COMMERCIAL GLUT Massive Increase in Space Lawyers Take Their Toll Discount Rents DISASTER NO.3: LESS FAVORED TAX TREATMENT Alternative Minimum Tax The Magic of Compounding DISASTER NO. 4: TAPS FOR 500 S & LS Gambling with Borrowed Chips Mortgage Scandals Sloppy Appraisals The Clock Is Ticking DISASTER NO. 5: HOME SWEET HOME Best Investment Going? “Inflation Is Here” Debt Buildup Creative Financing, Illiquid Buyers It Could Happen Again The Inflation Premium Should You Sell Your Home? What the Numbers Mean Condos Look Especially Weak The Duplex A Way to Play a Rickety Market Getting a 20-Percent Yield Buying Foreclosure Properties

Trading Financial Assets in an Age of Upheaval

TAKING STOCK OF YOUR INVESTMENT NEEDS AND SKILLS INVESTMENT SKILLS Know Your Own Temperament Conservative Investment Becoming More Difficult Successful Investors Are Well Informed Successful Investors Are Constantly Updating Their Expectations of What Will Happen “Don’t Ask the Barber Whether You Need a Haircut” “A Stopped Watch Is Right Twice a Day” “A Conspiracy Is a Waste of Someone Else’s Time” HINTS FOR IMPROVING YOUR INVESTMENT PERSPECTIVE REMEMBER TO LOOK AT MONETARY CLUES DON’T LOOK ONLY WHERE THE LIGHT IS GOOD PRACTICE UPDATING YOUR EXPECTATIONS CONSIDERING THE COMPETITION “BUY WHEN THE CANNONS SOUND AND SELL THE CORNETS.” MARKET IMPERFECTIONS WAITING FOR THE SCREW TO TURN COMPETITION AND COMPOUND INTEREST TIME AND YOU FOUR INVESTMENT VIRTUES NO IDEAL INVESTMENT DEBT RULES OF SOUND INVESTMENT IN CONCLUSION . . .

Trading Financial Assets

THE BASICS: GOING LONG AND SHORT FUNDAMENTAL VERSUS TECHNICAL TRADING TWENTY-FIVE TRADING GUIDELINES GUARDING AGAINST INVESTMENT MISTAKES: STOP LOSSES OPTIONS STRADDLES—PROFITING FROM A VOLATILE MARKET LEGGING OUT NONVOLATILITY SPREADS VERTICAL SPREADS SYNTHETICS OPTION TRADING RULES WARRANTS FOREIGN STOCKS

GLOSSARY OF INVESTMENT TERMS

AVERAGE NEW HOME PRICES GOLDLINE CROSS MARKET OPPORTUNITY FUND

STREETS