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If It’s Raining in Brazil, Buy Starbucks by Navarro

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CHAPTER 15STALKING THE INFLATIONARY TIGER

Armed with a steaming mug of double mocha latte, Ernest Hunter flicks his TV on to CNBC. It’s 8:32 in the morning, and as Ernie logs on to his direct access trading platform, he hears that the Producer Price Index is showing a sharp spike in inflation. Rising oil prices are to blame, according to CNBC’s macro data goddess Kathleen Hayes.

Boy, that ought to drive the market down, thinks Ernie. So he fires off an order to short a thousand shares of cubes, the tracking stock for the Nasdaq. Minutes later, his shorted cubes not only don’t go down, they go up—way up—and Ernie winds up losing almost $10,000.

Two days later, Kathleen Hayes reports on the latest Consumer Price Index numbers. Like the PPI, the ...

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