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2013/12/13

Most Meteorologists Don’t Know About This …

The Sovereign Investor

The World's Most Unassuming Financial Mastermind
He lives 1,700 miles from Wall Street … just to the east of the Black Hills National Forest … and 15 minutes from Mt. Rushmore … If you saw him on the street, you'd never guess he has anything to do with finance. But yet, his strategy is the most exciting wealth secret we've seen in our 15 years of business. We recently flew a camera crew to his office in Rapid City, South Dakota, where he gave us an exclusive look at how anyone can use this technique to make a small fortune in the markets. Just go here to watch it now.

Most Meteorologists
Don't Know About This …

By Chris Orr, Editor of Weather Trader

Dear Sovereign Investor,

As I mentioned yesterday, there's a final step I take that sets my weather predictions apart from virtually every forecaster in the world.

It's something I've only shared with a handful of my closest colleagues … and I've certainly never revealed it in a letter like this.

Yet it's the most important – and reliable – tool I use to project weather patterns as far as one year in advance.

It's the "secret weapon" that I always use when making a forecast …

It's called a Hovmoller Diagram.


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In short, this technique is how I track global wave motions in the atmosphere and drill down to latitudinal slices of the atmosphere.

See larger image

What this means is that the Hovmoller Diagram allows me to see eastward- and westward-moving waves in the atmosphere that are moving at different velocities. And when a westward-moving wave intersects with an eastward-moving one – bingo!

The odds of a storm or future weather pattern developing are at least 80%.

This methodology of using the Hovmoller Diagram to identify weather trends with an 80% accuracy rate allows me to see precisely when a stock will enter what I call its "optimal-trading zone" sometimes months in advance.

This is a completely predictable period when the weather affects a stock's performance most.

How I Identify a Stock's "Optimal-Trading Zone"

A lot of people are nervous about getting into stocks right now … with the Dow sitting near all-time highs … but that doesn't bother me at all.

Because I know which stocks will move no matter what the markets do.

This is possible because the moment an equity begins trading, a historical pattern begins to develop and this creates millions of pieces of data. I then run through some "when this type of weather hits, this happens next" scenarios … and I know exactly what a stock is likely to do next.

In short, with my Weather Trader strategy, I look at a stock's past performance – during key weather patterns – whether it be a snowy or warm winter … rainy or dry spring … cool or blazing-hot summer … or a wet or cold fall … to determine how it will react in the future.

This is how I find a stock's "optimal-trading zone."

And this is why steady, predictable gains can come fast … because the weather is a great way to accurately gauge a firm's future earnings results.

In fact, a recent Forbes article made the same point, saying: "In the last few weeks, we have seen building contractors, retailers and a few amusement park operators fall short of market expectations, citing unseasonal weather."

And weather has a significant impact on the earnings of every stock I follow ...

The Weather Affects a Stock's Future Earnings

Take Coca-Cola, for example ...

It recently reported weaker than expected second-quarter earnings.

Why? Simple, fewer people drink cold beverages when it's a cold, wet spring in the U.S.

As its chief financial officer, Gary Fayard, said on CNBC: "I hate to use the weather [as an excuse], but a lot of it was weather."

The result, Coke's stock dropped and investors could have collected 45% gains in just one day.

Wal-Mart also reported that "challenging weather conditions" contributed to the 1.4% drop in same store sales earlier this year.

Why? Snow and cold weather kept consumers from going to its stores.

On the company's first-quarter earnings conference call, Wal-Mart CEO Mike Duke said: "Sales were pressured ... and though no one likes to talk about weather, it was a real factor across the United States."

And in the weeks after this announcement, Wal-Mart's stock could've handed you 96% ... without shorting or taking any unnecessary risk.

These are two of the financially strongest firms in the world that you could ride for steady solid gains. And these are the types of trades I identify every month with my Weather Trader service.

My point is that when you know it's going to be a cold or mild winter … a dry or wet summer ... a cool spring or a warm fall …

Or you know with a high degree of certainty where and when a major hurricane, blizzard or tornado is going to hit … you can make a lot of money.

And the weather impacts almost every industry in the world, like mining and metals, energy, insurance, transportation and retail …

That's why there are so many ways to make money with this strategy – weather is constant – and it affects thousands of stocks.

This Works on Dozens of Stocks

But I've narrowed the pool to a few dozen fundamentally sound companies that move in very predictable patterns, year after year. And they're broken down into four categories – winter, spring, summer and fall.

This ensures my readers have the opportunity to profit every single month. And what's interesting about this strategy is that this works on the same stocks each and every year.

If you'd like to learn more about my Weather Trader strategy, I just completed a brief presentation that might interest you.

Click here to see it now.

There's a silver lining in every cloud,

Chris Orr
Editor, Weather Trader

P.S. For more details on my Weather Trader strategy and to learn more about how I use the Hovmoller Diagram to make investment recommendations, click here.

TODAY'S EDITOR

Chris Orr

Chris is a certified consulting meteorologist who has spent decades specializing in weather forecasting for hedge funds and commodity traders.

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This work is based on what we've learned as financial journalists. It may contain errors and should not be considered personalized investment advice. Therefore, you should not base investment decisions solely on what you read here. It's your money and your responsibility. Certain investments such as futures, options, and currency trading carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. CFTC Rule 4.41 - These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading and may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. Past results of any individual or trading strategy published by the Sovereign Society are not indicative of future returns by that individual or strategy, and are not indicative of future returns which could be realized by you. The Sovereign Society receives a marketing fee based on our relationship with EverBank.

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