My wife's currently pursuing her Master in Accouting with emphasis in Taxation. One of her professors is a pretty smart guy and usually spends 6 months of the year travelling abroad and generally enjoying himself. I'm assuming he makes a lot of money from his investments, book royalties and consulting gigs [apart from the salary he gets at college].
A few days ago he mentioned that he investing heavily in Australian dollars and that he thought the US Dollar was overvalued by 40%!!! I think 40% is a little steep. Maybe the local real estate is overvalued by 40% but the dollar can't be that high can it ???
I personally think the dollar will drop 20-25% over the next few years which is why I've been buying commodities and commodity stocks. But a 40% drop!! Why that could set me up for life! [just kidding, i'll make twice as much money in my investments, but inflation will still kill me]
Anyway, I just picked up Getting Rich Outside the Dollar by Christopher Weber & Leonard J Reiss. It was written quite a while ago, but the underlying concepts should be the same.
Trump Fires Carolyn!
Todays news is Donald Trump fires his sidekick Carolyn Kepcher after more than 10 years!
Atleast she last a lot longer than most contestants and she also got a book deal out of it!! Maybe she should read the "Joys of not working" ;-)
Also, Warren Buffett married his long time "companion" Astrid Menks at the good old age of 76. I guess there wasn't any pre-nup since Buffett's already given up most of his wealth to charity!
Atleast she last a lot longer than most contestants and she also got a book deal out of it!! Maybe she should read the "Joys of not working" ;-)
Also, Warren Buffett married his long time "companion" Astrid Menks at the good old age of 76. I guess there wasn't any pre-nup since Buffett's already given up most of his wealth to charity!
Free Trades With TDAmeritrade
I recently referred a co-worker to TDAmeritrade. I was supposed to get $50 and he was supposed to get 5 free trades. Well neither of us got squat so I had him call customer support. At first he didn't believe there was an such promotion so I had to tell him to look on their website's front page. In about 4 minutes he agreed and gave us both 10 free trades!
I think the promotion is still valid.
I think the promotion is still valid.
Amazon Magazine Promotion
I got an email today from Amazon.com
Get your biz and finance magazines now!
* For the first time ever, Amazon.com will be featuring $5 bonus coupon codes on hundreds of magazine subscriptions.
* Customers will get a $5 code for each magazine title they purchase. So, the more they buy, the more $5 codes they will receive!
* This offer is only available to customers who purchase the magazines featured from September 1st through the 30th, 2006.
Get your biz and finance magazines now!
The Joys Of Not Working
Through my meandering web-surfing habits I came across two very interesting books. They deal with not working. One of the authors was fired from his engineering jobs and says it was the best thing that ever happened to him. That was 25 years ago and he's never looked back.
Real Success Without a Real Job
The Joy of Not Working: A Book for the Retired, Unemployed and Overworked- 21st Century Edition
Talking about not having work, Radio Shak emailed 400 employees that they were being terminated!
And since we're talking about author Ernie Zelinski, might as well check out his other highly regarded book on retirement [actually its supposed to be about living!]
How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won't Get from Your Financial Advisor .
Real Success Without a Real Job
The Joy of Not Working: A Book for the Retired, Unemployed and Overworked- 21st Century Edition
Talking about not having work, Radio Shak emailed 400 employees that they were being terminated!
Employees at the Fort Worth headquarters received an email Tuesday morning telling them they were being dismissed immediately. "The work-force reduction notification is currently in progress," the notice stated. "Unfortunately your position is one that has been eliminated."
And since we're talking about author Ernie Zelinski, might as well check out his other highly regarded book on retirement [actually its supposed to be about living!]
How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won't Get from Your Financial Advisor .
Amazon Launches Affiliate Bookstore
Amazon launched an Affiliates Bookstore. I tried it out but its still a little buggy.
The interface isn't very flexible. You can only add 9 books[products] and if you want to swap one out with another one, you can't. Anyway its free, and thats hard to beat!
The interface isn't very flexible. You can only add 9 books[products] and if you want to swap one out with another one, you can't. Anyway its free, and thats hard to beat!
Opinions About Hedge Funds
This is what a young analyst at EverBank had to say about hedge funds after hearing that 2 hedge funds were going to sponsor Tom Cruise's next movie.
"Hedge funds are the worst plague in capital markets. First they destroy the dynamics of Oil and Natural gas markets. Then it has been Gold and Silver. What's next?
No wonder hedge funds have not really made money for its investors. It is just a club of people acting out their fancies at the expense of naïve investors money who could use a dollop of common sense...."
If you haven't done so, you must read When Genius Failed : The Rise and Fall of Long-Term Capital Management
which describes how nobel prize winning Math professors started a Hedge Fund and lost their shirts!
"Hedge funds are the worst plague in capital markets. First they destroy the dynamics of Oil and Natural gas markets. Then it has been Gold and Silver. What's next?
No wonder hedge funds have not really made money for its investors. It is just a club of people acting out their fancies at the expense of naïve investors money who could use a dollop of common sense...."
If you haven't done so, you must read When Genius Failed : The Rise and Fall of Long-Term Capital Management
which describes how nobel prize winning Math professors started a Hedge Fund and lost their shirts!
Builder Stocks Rise
Here's another article from Kiplinger's,Goodbye Condo Mania saying that the South Western Florida Condo market is done.
Just as I thought, all this bad news about builders had the opposite affect. The stock i'm short on [via fixed-risk put positions] was up today even after everyone and their mother is claiming that the florida condo market is dead. WCI was up today for no apparent reason. Probaby a short squeeze since its a heavily shorted short.
Or maybe people are thinking that the single-digit PE levels make home building stocks a good buy. Thats just the market lulling them into a false sense of security. I'm going to maintain my short positions. I have 5 months on 1 contract and 17 on the other. Home sales slow down in the fall and winter so I'm pretty sure the stock will drop on pessimistic guidance. Plus, technically, there doesn't seem to be any resistance down to $10, which is a good sign.
Even Toll Brothers [TOL] was up today!! Just 2 days ago the CEO said
1. The market is the worst its been in 40 years for home builders
2. He doesn't know when its going to start to get better.
And the stock is up!
Please do not follow any of my recommendations. My stock investing record is extremely poor. Plus I haven't even been investing nor following the markets for the past 3 years. This is just for information so you guys can look back in 2 years and agree on how bad my stock selection was!
Just as I thought, all this bad news about builders had the opposite affect. The stock i'm short on [via fixed-risk put positions] was up today even after everyone and their mother is claiming that the florida condo market is dead. WCI was up today for no apparent reason. Probaby a short squeeze since its a heavily shorted short.
Or maybe people are thinking that the single-digit PE levels make home building stocks a good buy. Thats just the market lulling them into a false sense of security. I'm going to maintain my short positions. I have 5 months on 1 contract and 17 on the other. Home sales slow down in the fall and winter so I'm pretty sure the stock will drop on pessimistic guidance. Plus, technically, there doesn't seem to be any resistance down to $10, which is a good sign.
Even Toll Brothers [TOL] was up today!! Just 2 days ago the CEO said
1. The market is the worst its been in 40 years for home builders
2. He doesn't know when its going to start to get better.
And the stock is up!
Please do not follow any of my recommendations. My stock investing record is extremely poor. Plus I haven't even been investing nor following the markets for the past 3 years. This is just for information so you guys can look back in 2 years and agree on how bad my stock selection was!
The New 2007 Ferrari 599 GTB Fiorano
Ferrari just came out with its new 620 hp 599 GTB. It kind of looks like the Jaguar XKR. Only its probably around $195,000 more expensive and has 50% more horsepower.
Buying Used Vs New Cars
I think in a year or two it'll be time to upgrade my '99 Accord V6 coupe. I was just looking at new 5-series BMW's and the cheapest 5 series for the 2006 models is about $43,095 plus tax. OUCH!
Hmmm....whats the pricing on used?? Apparently 50% off! Here's a 2001 model for only $16,995!. So its 2000 miles away. But for a $26,000 saving, I can afford to fly out there first class and drive it back!
And while I'm there, I can use the $26k as downpayments for 2 more houses in Indiana!!! Last year I bought 2 houses there for around $85k each from the bank as REOS. The insurance replacement value came back as $135k each. That doesn't mean they'll sell for that much, but atleast I didn't overpay for them!
I got a 30 year fixed on one and a 10 yr fixed on the other. Total downpayment was around $20k-$25k between the two. And they cashflow a little bit too.
I'd rather buy 2 more houses than pay retail for a new car.
Hmmm....whats the pricing on used?? Apparently 50% off! Here's a 2001 model for only $16,995!. So its 2000 miles away. But for a $26,000 saving, I can afford to fly out there first class and drive it back!
And while I'm there, I can use the $26k as downpayments for 2 more houses in Indiana!!! Last year I bought 2 houses there for around $85k each from the bank as REOS. The insurance replacement value came back as $135k each. That doesn't mean they'll sell for that much, but atleast I didn't overpay for them!
I got a 30 year fixed on one and a 10 yr fixed on the other. Total downpayment was around $20k-$25k between the two. And they cashflow a little bit too.
I'd rather buy 2 more houses than pay retail for a new car.
Bought Some More Stock Today
Bought some stock in Pengrowth Energy Trust[PGH] today. Its a Canadian stock that pays out a strong 11.60% annual dividend on a monthly basis. The ex-dividend date is August 29th so I thought I'd get in before the cut-off date.
Since I think the US dollar is headed down in the long run, this is a good hedge against it while also getting a great dividend. There are a lot of canadian stocks that give out a good dividend. They're kind of like REITS in the US. If they promise to pay out most of their profits as dividends, they aren't subject to double taxation. They sometimes have the words "income fund" or "income trust" in their name.
Now, if I only had a million bucks, I'd be able to live off the dividends!
Since I think the US dollar is headed down in the long run, this is a good hedge against it while also getting a great dividend. There are a lot of canadian stocks that give out a good dividend. They're kind of like REITS in the US. If they promise to pay out most of their profits as dividends, they aren't subject to double taxation. They sometimes have the words "income fund" or "income trust" in their name.
Now, if I only had a million bucks, I'd be able to live off the dividends!
Funny George Bush Videos
Here's an excellent video showing George Bush as a great debater 10 years ago and how he's gone senile. Its pretty good.
Bush is senile.
Bush and Blair's Love Duet.
Andy Dick's Spoof on Bush
And Paris Hilton's Music Video Stars Are Blind, is actually a lot better than I expected. She can actually sing!
Bush is senile.
Bush and Blair's Love Duet.
Andy Dick's Spoof on Bush
And Paris Hilton's Music Video Stars Are Blind, is actually a lot better than I expected. She can actually sing!
Builders Acknowledge A Housing Slump
Finally, after lots of bogus reports about a soft landing and their being no real estate bubble, several builders have acknowledged [or should I say confessed] that their may be a stronger than expected decline in housing demand.
"It would be difficult to characterize the position of home builders as other than in a hard landing," says Robert Toll, chief executive of luxury home builder Toll Brothers Inc., which reported yesterday that net income fell 19% in the third quarter ended July 31. "I've never seen a downturn in housing without a downturn in employment or... some macroeconomic nasty condition that took housing down along with other elements of the economy," he says. "This time, you've got low unemployment, you've got job creation, you've got a stable stock market and relatively low interest rates."
Last year, Toll Brothers reported that its quarterly profit had doubled, Mr. Toll boasted: "We've got the supply, and the market has got the demand. So it's a match made in heaven." Since then, Toll has cuts its guidance four times on the number of homes it expects to close on, and its share price has fallen by nearly 50%.
Even DR Horton is now bearish. The CEO, Donald Tomnitz said "Every time we've gone into a downturn in the home-building industry, they've always been longer and deeper than we've all imagined. So we're preparing for the worst, and we think this one will be longer and deeper than just the last six months."
I should've shorted these stock last year, just like I was thinking, but I never got around to it! But I did buy puts for WCI last week with expirations in January 07 and March 07. WCI is a Florida based builder that specializes in luxury high-rise condominium towers. Hopefully with all the negative sentiment we won't see a short-term spike in their stock prices.
"It would be difficult to characterize the position of home builders as other than in a hard landing," says Robert Toll, chief executive of luxury home builder Toll Brothers Inc., which reported yesterday that net income fell 19% in the third quarter ended July 31. "I've never seen a downturn in housing without a downturn in employment or... some macroeconomic nasty condition that took housing down along with other elements of the economy," he says. "This time, you've got low unemployment, you've got job creation, you've got a stable stock market and relatively low interest rates."
Last year, Toll Brothers reported that its quarterly profit had doubled, Mr. Toll boasted: "We've got the supply, and the market has got the demand. So it's a match made in heaven." Since then, Toll has cuts its guidance four times on the number of homes it expects to close on, and its share price has fallen by nearly 50%.
Even DR Horton is now bearish. The CEO, Donald Tomnitz said "Every time we've gone into a downturn in the home-building industry, they've always been longer and deeper than we've all imagined. So we're preparing for the worst, and we think this one will be longer and deeper than just the last six months."
I should've shorted these stock last year, just like I was thinking, but I never got around to it! But I did buy puts for WCI last week with expirations in January 07 and March 07. WCI is a Florida based builder that specializes in luxury high-rise condominium towers. Hopefully with all the negative sentiment we won't see a short-term spike in their stock prices.
Blogging for Dollars
Business 2.0 had an article about how profitable blogging has become.
There was another article about 6 months ago about how some bloggers were making around $75,000 to $150,000 per year. But now the stakes are significantly higher. They pulling in $750,000 to $1.5 million per year!!!!
When I finally do quit my job, I now know which money-making avenue I'll be pursuing. ;-)
There was another article about 6 months ago about how some bloggers were making around $75,000 to $150,000 per year. But now the stakes are significantly higher. They pulling in $750,000 to $1.5 million per year!!!!
When I finally do quit my job, I now know which money-making avenue I'll be pursuing. ;-)
How To Invest Like A Billionaire
Its pretty simple. You buy whatever stock they're buying when they're buying it!
Billionaires aren't usually in the habit of broadcasting what they buy and sell but they usually do buy in large noticeable quantities. The SEC has some stringent guidelines on disclosure of purchases and sales.
According to SuperCash: The New Hedge Fund Capitalism
Billionaires aren't usually in the habit of broadcasting what they buy and sell but they usually do buy in large noticeable quantities. The SEC has some stringent guidelines on disclosure of purchases and sales.
According to SuperCash: The New Hedge Fund Capitalism
If there's a billionaire you are interested in following, you can use various services to keep track of their filings, such as www.sec.gov and www.edgar-online.com. Specifically, you want to look for these types of filings:
* Form 4: This details if they are making a significant change to their holdings. If they own more than 5 percent of a company and they sell shares, they must file a Form 4 within 10 days.
* SC-13D: A 13D schedule needs to be filed whenever they hold more than 5 percent of a company or if they go from owning more than 5 percent to less than 5 percent. This form has to be filed within 10 days of the "acquisition event" that took the filer above the 5 percent ownership level in a company.
* 13F-HR: This is filed to list all of the holdings of an institution that needs to file within 45 days of the close of a quarter. For instance, Michael Dell is not an institution but he funnels all of his money through a family office called MSD Capital, which does have to file the 13F-HR filing.
Let's take a look at some of the investors I like to follow.
MARK CUBAN
Even successful dot-com cowboys diversify. Perhaps they know better than anyone the need to explore unpopular investment options. Cuban, perhaps most famous for his impeccable timing in selling his company, Broadcast.com, to Yahoo! and then selling his Yahoo! shares at the very peak when they were worth upwards of $3 billion, recently posted his stock positions, both long and short, on his blog, www.blogmaverick.com.
His long positions include Lion's Gate Entertainment (his comment: "The only indie film library available, willing to leverage new media for revenue"), Rentrak ("Only independent source advertisers can use for tracking Video on Demand and Online Video on Demand"), and domain name registrar Tucows ("Good management, low PE, sells to growing market segment"). His shorts include Imergent, which makes software to help people build e-commerce sites ("I don't like companies that sell products that consumers shouldn't buy. It catches up at some point") and Interoil, an oil and gas company ("Appears to have cash issues").
BILL GATES
Even billionaires occasionally need to diversify their portfolios, and Bill Gates' massive $40 billion investment in Microsoft is a case in point. Through his investment vehicle, Cascade Investments, Bill Gates buys the stocks of traditional brick and mortar companies. For instance, he owns 2.4 million shares of manufacturing, plastics, electric, health-care company Otter Tail. While the stock hasn't gone up much in recent years, it is currently paying a very steady 4.5 percent dividend and is trading at a low double-digit P/E, providing a decent cushion for Gates and his heirs.
Other stocks Gates owns include 5.1 million shares of Pan American Silver, one of the largest public silver mines; 441,000 shares of Four Seasons Hotels; and 18 million shares of trash collector Republic Services. The rest of Gates' holdings can be found in the SEC filings for Cascade Investments.
Book Review - Undercover Economist
I just read The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--and Why You Can Never Buy a Decent Used Car! by Tim Harford.
Its an incredibly good book that explains every economics [like whether coffee shops make a profit and how grocery stores gouge you]. However the author sticks to the basic micro-economic trends and tries to explain how some of them affect the global economy.
It doesn't have any graphs or equations and you don't need any math to understand it. Pretty well explained. But it is a little dry and isn't as entertaining as Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. But from an investment or financial understanding perspective its a lot more useful.
I strongly recommend it for anyone interested in how a free-market economy should work.
Its an incredibly good book that explains every economics [like whether coffee shops make a profit and how grocery stores gouge you]. However the author sticks to the basic micro-economic trends and tries to explain how some of them affect the global economy.
It doesn't have any graphs or equations and you don't need any math to understand it. Pretty well explained. But it is a little dry and isn't as entertaining as Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. But from an investment or financial understanding perspective its a lot more useful.
I strongly recommend it for anyone interested in how a free-market economy should work.
A More Expensive Alternative To Gas [& How To Profit From It]
The Miami Herald reports that
Substituting ethanol for gas is a terrible idea. It will just raise the price of corn and cause a food shortage in the long run.
I think a good short term play is buying options for next summers corn futures. Prices are bound to jump in the next 6-8 months.
Speaking of investing, one company I recently invested in Anglo-American [AAUK] is up nearly 10% in the 10 days I've owned it! Its made up for the losses I incurred in RNE. AAUK owns a large part of De Beers, the Diamond company. That should keep my wife happy. She gives me the evil eye everytime they play those anniversary ring ads plays on TV.
AAUK is a good hedge against the dollar and raising commodity prices. [or basically a hedge against inflation!]
Washington has embraced an alternative to $3-a-gallon gasoline -- $4-a-gallon ethanol.
That's the cost of this federally mandated fuel additive, when you take everything into account. Ethanol, produced mostly from Midwestern corn, currently wholesales for more than $3 a gallon.
And that's the Midwest price -- ethanol costs even more on the coasts because it can't be sent through pipelines and thus is costlier to ship than gasoline. At these prices, adding even small amounts of ethanol to gas can boost pump prices by 20 cents per gallon or more.
In addition, the Department of Energy reports, ''ethanol has only about two-thirds the energy content of an equivalent volume of gasoline,'' so it substantially reduces fuel economy. In effect, using it is like switching to a larger vehicle. In many big cities, ethanol cannot be added to ordinary gas without the resulting mixture violating federal air-quality regulations. It has to be added to a costly base blend that compensates for ethanol's environmental shortcomings.
When you add up all the direct and indirect costs of using ethanol, it's the equivalent of $4-a-gallon gasoline -- and closer to $5 if you consider its lousy fuel economy.
Give the feds credit. It isn't easy to find something worse for consumers than $3 gas, but they managed to do it.
Of course, ethanol isn't really designed to help America's hard-pressed drivers, but to help special interests -- namely, Midwestern corn farmers and ethanol producers such as Archer Daniels Midland. For years, the domestic ethanol industry, aided by its supporters in Congress, has enjoyed massive tax breaks as well as protectionist tariffs that block cheaper imports. And now, thanks to last year's big energy bill, Americans are required by law to add four billion gallons of ethanol to the fuel supply this year. That number will rise to 7.5 billion gallons by 2012.
Substituting ethanol for gas is a terrible idea. It will just raise the price of corn and cause a food shortage in the long run.
I think a good short term play is buying options for next summers corn futures. Prices are bound to jump in the next 6-8 months.
Speaking of investing, one company I recently invested in Anglo-American [AAUK] is up nearly 10% in the 10 days I've owned it! Its made up for the losses I incurred in RNE. AAUK owns a large part of De Beers, the Diamond company. That should keep my wife happy. She gives me the evil eye everytime they play those anniversary ring ads plays on TV.
AAUK is a good hedge against the dollar and raising commodity prices. [or basically a hedge against inflation!]
Make You Home a Movie Star!
Here's a neat idea to make money from your vacation homes or even your personal property. Have it star in a movie!
All you need to do is take about 36 pictures and send them to the local film commision. They maintain a database for location scouts. Of course they'll take a large chunk of the money you make as a commission but with rates going as high as $2,500/day its probably worth it.
The San Diego Film Commission has the following tips:
All you need to do is take about 36 pictures and send them to the local film commision. They maintain a database for location scouts. Of course they'll take a large chunk of the money you make as a commission but with rates going as high as $2,500/day its probably worth it.
The San Diego Film Commission has the following tips:
Movie magic has been the source of fantasy and dreams for nearly 100 years.Most people are fascinated with the process and will cooperate if they understand what is going on.The film experience can be fun.Here 's what you need to know to make your property a "star":
One: You must own or manage the property and be able to legally grant permission for filming to occur.
Two: Production companies carry insurance that covers damage or accidents that may occur during location shooting.Request that you and your property be added as "additional insured " on their policy and get a copy before filming begins.
Three: Ask questions first:
* Is the San Diego Film Commission involved?(Your assurance that all local governmental and agency permits, requirements and concerns are being handled.)
* What is the name of the production company and the project name?
* What kind of project is it? TV, feature film, commercial, print ad? Is it an interior or exterior shot?
* What is the action? Walk and talk? Fight scene? Chase?
* How many crew members and talent will be on the property?
* Where will they park? Will it impact my business? The neighbors?
* Will the company inform the neighbors and provide a neighborhood letter?
* How long will they use the location?
* If the filming takes longer than planned, what happens then?
* How and when will the company restore the property to its original condition?
Four: You will be working primarily with the location manager. Ask the manager to tape off areas of your property that won 't be used to prevent crew and talent from "roaming " from the scene.
Five: Make a written agreement as to what you do and do not permit on your property, for example: eating, drinking, smoking.
Six: The location manager will offer you a fee for the use of your property. Ask how and when you will be paid. When considering whether the amount is a fair offer, first think of a reasonable rate if you were to lease your property to a typical user for one month, then divide that amount by thirty to determine a daily rate. If it is a business property, consider what you would make in revenue on a typical day. Other considerations are the level of inconvenience, the time and number of people involved and whether or not you would enjoy the experience. Interior filming is more disruptive than exterior filming. A print shoot, with a tripod and a crew of 3 to 5 people, is not as disruptive as a 35-member commercial shoot with camera and sound equipment. Remember, the production company must restore everything to its original state.
Seven: Recognize that any time you have people in your home there will be disruption. Cables will be laid, furniture moved, things bumped, etc. The crew will lay cardboard on your floors to prevent damage and will clean or paint any walls they damage. Negotiate up front for other protective measures your property and belongings may require.
Eight: You may want to remove any personal items that you consider to be valuable or irreplaceable before shooting begins, such as antiques, photographs or family memorabilia.
Nine: If there is a celebrity on your property you will be tempted to photograph them or talk to them. Make certain that you have permission to do either. The actor may be concentrating on the part and not appreciate the interruption. The location manager will know the best approach, and may prefer to introduce you themselves. Please don 't invite friends and family to view the filming. The production company is performing work that needs a quiet environment to succeed.
Ten: The production company supplies its own electricity via portable generator, as well as their own bathrooms, unless otherwise specified.
Eleven: The production company should ask your permission before cutting any shrubs, trimming trees or any other activity that alters your property.
Twelve: Don't be afraid to ask questions. If the production company can 't answer your questions to your satisfaction please call the San Diego Film Commission at (619)234-FILM.
Top 10 Ways To Lose All The Money In Your Trading Account In 30 Days Or Less - Guaranteed!
Taz Trader Blog has a great article on how to lose money trading.
#10 - Put all of your efforts into finding the perfect technical indicator. Once you find this magical indicator, it will be like turning on a water faucet. Go all in. The money will just flow into your account!
#9 - When your technical indicator says that the stock is oversold, BUY IT RIGHT THEN. Always do what your technical indicator says to do. It takes precedence over price action.
#8 - Make sure to visit a lot of stock trading forums and ask them for hot stock tips. Also, ask all your friends and family for stock tips. They are usually right, and acting on these tips can make you very rich.
#7 - Watch what other traders do and be sure to follow the crowd. After all, they have been trading a lot longer than you so naturally they are smarter.
#6 - Pay very close attention to the fundamentals of a company. You MUST know the P/E ratio, book value, profit margins, etc. Once you find a "good company", consider going on margin to pay for shares in their stock.
#5 - Forget about developing a trading plan. If you see a good stock just buy it. Don't worry about when your going to sell. No need to get caught up in the details. Besides, you'll probably get rich the first year of trading anyway.
#4 - Buy expensive computers and trading software. While your at it, buy a couple more TV's so that you can watch CNBC on multiple screens! You NEED all of these gadgets in order to trade stocks successfully. Then watch the money roll in!
#3 - Always follow your emotions. They are there for a reason. If you feel nervous, sell the stock! If you are excited, buy more shares. This is the best way to trade stocks and fatten up your trading account.
#2 - Don't worry about using stop loss orders. When the time comes, you will be able to sell your shares and take a loss. Your emotions won't even come into play. Besides, stop loss orders are for sissies!
#1 - Absolutely, without a doubt, FORGET about managing your money. Don't worry about how much you can lose on a trade. Only think about how much loot your gonna make. Then start planning that trip to Fiji!
#10 - Put all of your efforts into finding the perfect technical indicator. Once you find this magical indicator, it will be like turning on a water faucet. Go all in. The money will just flow into your account!
#9 - When your technical indicator says that the stock is oversold, BUY IT RIGHT THEN. Always do what your technical indicator says to do. It takes precedence over price action.
#8 - Make sure to visit a lot of stock trading forums and ask them for hot stock tips. Also, ask all your friends and family for stock tips. They are usually right, and acting on these tips can make you very rich.
#7 - Watch what other traders do and be sure to follow the crowd. After all, they have been trading a lot longer than you so naturally they are smarter.
#6 - Pay very close attention to the fundamentals of a company. You MUST know the P/E ratio, book value, profit margins, etc. Once you find a "good company", consider going on margin to pay for shares in their stock.
#5 - Forget about developing a trading plan. If you see a good stock just buy it. Don't worry about when your going to sell. No need to get caught up in the details. Besides, you'll probably get rich the first year of trading anyway.
#4 - Buy expensive computers and trading software. While your at it, buy a couple more TV's so that you can watch CNBC on multiple screens! You NEED all of these gadgets in order to trade stocks successfully. Then watch the money roll in!
#3 - Always follow your emotions. They are there for a reason. If you feel nervous, sell the stock! If you are excited, buy more shares. This is the best way to trade stocks and fatten up your trading account.
#2 - Don't worry about using stop loss orders. When the time comes, you will be able to sell your shares and take a loss. Your emotions won't even come into play. Besides, stop loss orders are for sissies!
#1 - Absolutely, without a doubt, FORGET about managing your money. Don't worry about how much you can lose on a trade. Only think about how much loot your gonna make. Then start planning that trip to Fiji!
Getting A Discount At Barnes And Nobles
I recently bought a book for a friend's birthday at Barnes and Nobles Book Store. Since my friend is an investor in one of my private placement funds, I considered this a business expense[and the book was below $25 as allowed by the IRS for Business gifts].
When I forked over my business credit card to pay for Guns, Germs & Steel I was informed that I would get a corporate discount of 15%!!!
So not only was the gift tax deductible, but I also got a discount on it!!! I love having my own corporate entity!
When I forked over my business credit card to pay for Guns, Germs & Steel I was informed that I would get a corporate discount of 15%!!!
So not only was the gift tax deductible, but I also got a discount on it!!! I love having my own corporate entity!
Surprising Jobs That Can Pay $100,000
According to an article in Forbes, there are a few surprizing jobs that pay $100k salaries. Not everyone in this profession makes 6 figures, but there probably 20%+ that do.
10 surprising jobs that can pay you $100,000
Court reporter
Professional (life or career) coach
Mine manager
Salesperson
Truck driver
Pressman
Technical writer
Restaurant manager
Air traffic controller
Elementary school principal
Well, if I ever need a job in another profession, I'm pretty sure I can cut it as a Court Reporter [Just need to type 200 words/minute], a Mine Manager[Dig a hole THERE!] or a Truck Driver!
10 surprising jobs that can pay you $100,000
Court reporter
Professional (life or career) coach
Mine manager
Salesperson
Truck driver
Pressman
Technical writer
Restaurant manager
Air traffic controller
Elementary school principal
Well, if I ever need a job in another profession, I'm pretty sure I can cut it as a Court Reporter [Just need to type 200 words/minute], a Mine Manager[Dig a hole THERE!] or a Truck Driver!
Condo Prices Fall Nationally
According to MarketWatch.com,
And according to the Real Estate Journal
Prices have started falling in San Diego. 10% in the condo range and a little more in the high end home range. Even the median home price is down 5-10% from last year. I'm glad I'm a renter!!!
Prices for condos were down 0.3% year-over-year nationally. Fifteen cities had double-digit increases from a year earlier, while 14 had declines. In the condo market, Phoenix, Ariz., had the biggest gains, up 25.3%. Condo prices fell 5.1% in the Atlanta, Ga., metro region. Condo prices were down in once-hot markets like San Diego and Washington.
Nationally, median prices for existing homes were up 3.7% year-over-year, according to data already released by the group.
The biggest year-over-year gain was in Baton Rouge, La., where prices jumped 27.3% as demand skyrocketed after the hurricanes. The rest of the top 10: Ocala, Fla.; Virginia Beach, Va.; Gainesville, Fla.; Portland, Ore.; Jacksonville, Fla.; Tampa, Fla.; Spokane, Wash.; Beaumont, Texas; and Eugene, Ore.
And according to the Real Estate Journal
Price gains slow across the U.S.
In the second quarter of this year, there was a drop in the number of cities experiencing double-digit home price gains from the same period the year before -- from 66 to 37, according to new data released by the National Association of Realtors and published by MarketWatch.com. In the second quarter of this year, 26 cities experienced price declines, compared to 16 metros last year, MarketWatch says. Across the U.S., median existing-home sale prices rose 3.7% between the second quarters of 2005 and 2006, the Web site says. Baton Rouge, La., showed the biggest price increase -- 27.3%, while Danville, Ill., had the biggest price drop -- 11.2% -- the article says. Condo prices fell 0.3% nationally, with Phoenix, Ariz., experiencing the biggest increase -- 25.3%, the Web site says.
Hot vacation-home markets cool
During the housing boom, prices for second homes in vacation hot spots across the U.S. soared. But now, as the real-estate market slows, price tags in some areas are declining, The New York Times says. Vacation locales in all price ranges are experiencing a slowdown -- from pricy enclaves like Lake Tahoe in California and Nevada and the Hamptons in New York, to more modestly priced locations like the Jersey Shore and Panama City, Fla., the paper says. According to the article, sales dropped 35% in the first half of this year in Lake Tahoe, 14% in Southampton, N.Y., and 19% in East Hampton, N.Y. Median prices declined 10% in June from the year before in the more modestly priced Panama City, Fla., and dropped 10% to 15% this spring and summer from the same period a year before in Ocean City, N.J., the New York Times says.
Prices have started falling in San Diego. 10% in the condo range and a little more in the high end home range. Even the median home price is down 5-10% from last year. I'm glad I'm a renter!!!
First Morgan Silver Dollar Arrives
I got my first Morgan Silver Dollar today. Morgans are beautiful, large and allegedly the most popular collectible coin in the US today. This particular specimen was minted in 1896 making around a 110 years old. Its in pretty good condition for a coin of that age. Considering I only paid $21 for it, I'd say its a great deal too!
It has the liberty face on one side and an eagle on the other. Because of the eagles' somewhat scrawny appearance, they used to be called buzzards! Its called the Morgan after the dude who designed the coin.
Gold At $100 Off Its 2006 Highs
Gold has retreated quite a bit since its high of $730 on May 11th 2006. Its currently trading around $630/oz. I see this as a good buying opportunity. While I'm against dollar cost averaging, I think gold is in the beginning of a bull cycle and this justifies buying on dips.
I recently bought another Australian Lunar Series coin. This time I got the Dog. Also got it in the Silver coin and surprizing the species of dog is different on both of them.
Anyway, I also bought some gold British Sovereigns [around 100+ years old], some French and Swiss francs and an 1873 Danish "Mermaid" Coin.
I also bought a 200 yr old gold coin of Napolean Boneparte! [Ok maybe I'm going nuts with this gold coin stuff, but its hard to stop buying those damn things now!] Better stop now before the wife gets upset!
I also got a bunch of Silver Eagles. Funny how the price of silver is so low considering that its used in electronics as well as jewellery. Compared to Gold [which in my mind is inherently useless] it hasn't gone up as much. Anyway I'll post pictures of them later.
Famous Quotes
Sometimes your best investments are the ones you don't make.
Donald Trump
I buy expensive suits. They just look cheap on me.
Warren Buffett
There's nothing wrong with getting fired.
Ted Turner
The consumer isn't a moron; she is your wife.
David Ogilvy
My son is now an "entrepreneur." That's what you're called when you don't have a job.
Ted Turner
Donald Trump
I buy expensive suits. They just look cheap on me.
Warren Buffett
There's nothing wrong with getting fired.
Ted Turner
The consumer isn't a moron; she is your wife.
David Ogilvy
My son is now an "entrepreneur." That's what you're called when you don't have a job.
Ted Turner
More Oil News
And just when you thought that the price of oil couldn't go any higher you hear that Exxon's been understating their profits by around 10%!!!! There's a tax loophole that allows companies to use a fixed pricing for their cost of goods. Some companies use this to artificially boost their profits, while some like the oil companies use it to hide them!!!
Anyway, according to an article in fortune, US drivers haven't changed their driving habits and oil consumption is actually higher than it was last summer. Instead, they say we've cut other stuff like eating out.
Anyway, according to an article in fortune, US drivers haven't changed their driving habits and oil consumption is actually higher than it was last summer. Instead, they say we've cut other stuff like eating out.
Interesting Articles On Credit Expansion And Liquidity
Another interesting article about deflation, this time caused by excess global liquidity.
Also got an email today also talking about credit expansion.
If you want to read why Dr. Kurt Richebächer thinks the US is headed for a slump you can read the whole article By Far the Weakest Recovery
But, for now, a superabundance of money and credit is financing a leap in asset prices across markets and time zones. Colleague Ian McCulley has made a study of this transnational and heterogeneous bull market. The most favored asset classes run the gamut: comic books, Spanish postage stamps, U.S. farmland, Indian paintings, exotic automobiles, Middle Eastern antiquities, Middle Eastern equities, European houses, Tokyo land. Taking a bow for a stellar second quarter, Sotheby's cited strength in the Chinese art market, the Russian art market and in Impressionist and contemporary art sales in London. It has pushed through a 22% increase in commission rates.
Also got an email today also talking about credit expansion.
"It's time," Addison reports from on the scene in Cannes, France. "The good doctor poked me in the shoulder last night at dinner. 'It's time for the United States to collapse,' he said, with a satisfied smile on his face. 'The world needs to heal.'"
In a normal economic expansion, Dr. Richebächer contends, credit expansion is roughly equal to the nation's savings. As 2005 was the first full year in which the U.S. consumer saw a negative savings rate since 1933, the rate of credit expansion should have also been negative.
Au contraire, Dr. Richebächer estimates that for every dollar of GDP produced in the United States last year, over four dollars of credit was created. "We haven't seen such a bubble as this one since the 1920s. The only difference is...this time it's much worse," says the good doctor.
If you want to read why Dr. Kurt Richebächer thinks the US is headed for a slump you can read the whole article By Far the Weakest Recovery
Fed Didn't Hike The Rates Today
Today the Fed the the brakes on the rate hikes. So will the Fed stay on pause or will it continue raising the rates at the next meeting?
Seems like economists don't know either.
"There was a strong case for pausing at 4.5%," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "There was already plenty of evidence the previous hikes had begun to soften growth." He predicts the Fed will start to cut rates by next April.
"You can't fight inflation without risking overkill on the economy," said Ethan Harris, chief U.S. economist at Lehman Brothers, who thinks the Fed shouldn't have paused and predicts it will eventually raise the rate to 5.75%. "That is a risk, and it's a risk they should take."
There's an interesting theory I read somewhere put forth by a trader[of course]. You should watch how the market reacts to the Fed's rate hike [or not] and see what it does. Apparently if you take the opposite position, you will be rewarded the very next day with an inverse movement in the market and a profitable trade. [NOTE: this is not something I follow, nor recommend, just something random I read]. Since the market was down today, it should supposedly move up tomorrow. Lets see if it works! [if it does, I still won't recommend it]
Seems like economists don't know either.
"There was a strong case for pausing at 4.5%," said Ian Shepherdson, chief U.S. economist at High Frequency Economics. "There was already plenty of evidence the previous hikes had begun to soften growth." He predicts the Fed will start to cut rates by next April.
"You can't fight inflation without risking overkill on the economy," said Ethan Harris, chief U.S. economist at Lehman Brothers, who thinks the Fed shouldn't have paused and predicts it will eventually raise the rate to 5.75%. "That is a risk, and it's a risk they should take."
There's an interesting theory I read somewhere put forth by a trader[of course]. You should watch how the market reacts to the Fed's rate hike [or not] and see what it does. Apparently if you take the opposite position, you will be rewarded the very next day with an inverse movement in the market and a profitable trade. [NOTE: this is not something I follow, nor recommend, just something random I read]. Since the market was down today, it should supposedly move up tomorrow. Lets see if it works! [if it does, I still won't recommend it]
Tesla's Motors Electric Roadster
With today's surge in crude oil prices to $77/barrel, we can expect prices at the pump to jump up as well. How would you like to buy a sports cars with performance that rivals a porsche and only costs 1 cent/mile???
Well Tesla Motors is creating the world's first electric sports car. The Telsa Roadster is a nifty piece of engineering and comes with a comparatively low price tag of $90,000. Don't know how much it'll cost to replace the batteries [they should last 100,000 miles] but with a 3.5 hr charge from a 240volt outlet, thats quicker than my cellphone!!!!
Well Tesla Motors is creating the world's first electric sports car. The Telsa Roadster is a nifty piece of engineering and comes with a comparatively low price tag of $90,000. Don't know how much it'll cost to replace the batteries [they should last 100,000 miles] but with a 3.5 hr charge from a 240volt outlet, thats quicker than my cellphone!!!!
Myths of Hedge Funds
WSJ has a great article about Myths of Hedge Funds.
Myth #1: Hedge Funds are all the same. There are up to 25 different hedge-fund strategies which include funds invested in equity (both long and short), bankruptcies, mergers and acquisitions, high yield debt, bank debt, currencies, commodities, convertible debt, mortgage backed securities, trade claims, options, derivatives, volatility, etc. Each strategy has its own risk factors, return history, etc. Smart investors should heed the Socratic maxim of hedge funds -- Know Thy Strategy.
Myth #2: Hedge Funds are too risky. This is perhaps the biggest myth of all. For the first five years of this decade, hedge funds have returned a 7% (approximate) compound annual rate of return while the S&P has returned -2.2% per year. These positive returns in a bear market demonstrate that the funds are able to produce higher returns with less-than-market risk.
Myth #3: Hedge Funds are too expensive. No doubt about it. Index funds and mutual funds can be purchased at much lower fee structures. But to savvy investors that's not the issue. The key question is, net of fees, where do I want my capital invested? Hedge-fund fees are high as they are meant to compensate the top investment talent available. The question isn't, are hedge funds expensive? But rather, are the fees worth it? The market is saying yes.
Myth #4. Hedge Funds are secretive. Not so. Hedge funds are sold through privately distributed prospectuses which carefully describe, among other things, the fund's investment parameters, terms of investment, redemption rules, conflicts of interest, as well as the backgrounds and track records of key personnel. In addition, the funds provide annual GAAP audits detailing their assets. Many, although not all, funds disclose their portfolio holdings upon request. A fund that failed to provide this information would have a minimal chance of raising meaningful capital.
It is true that this information is not publicly available. This is not because managers are secretive, but rather because the funds are privately offered and SEC rules prohibit managers from making the information available.
Myth #5: Recent Hedge Fund regulations will prevent fraud. There is no reason to believe that recent SEC regulations will prevent fraud. Funds can avoid regulation by imposing a two-year lock-up on capital raised on or after February 2006. It is safe to assume fraudsters will avail themselves of that loophole. What the new regulations have done is to reduce the liquidity normally provided to investors. Funds of funds now have to choose between allocating to funds which impose two-year lock-ups (as many of the top funds are now doing) thereby reducing investor liquidity rights, or selecting funds that are not their "first choice" but will register and provide annual liquidity. That means that in the name of "protecting the public" the SEC just reduced the liquidity available to funds of funds and hedge-fund investors. While fraud will never be entirely eliminated, continually evolving due diligence and other best-practice standards should reduce the scope and frequency of fraud.
Myth #6: Funds-of-funds investors need more regulatory protection than hedge-fund investors. Of the $1 trillion in hedge funds, approximately $335 billion comes from funds of funds. Most funds of funds require individual investors to be qualified purchasers (those with $5 million or more in investable assets), so they don't prey on widows and orphans. Less than 3% ($8 billion) of all capital invested in funds of funds is estimated to be in publicly registered "fof" vehicles where investors who are not qualified purchasers can invest. Hardly worth a new regulatory scheme. In fact, like hedge funds, funds of funds provide monthly track records, annual audited reports and detailed prospectuses which disclose conflicts of interest, investment terms, etc. Fund-of-fund annual reports are required to disclose any investment that exceeds 5% of total assets. Many funds of funds are fully transparent.
Myth #7: Hedge Funds destabilize markets. While the collapse of Long Term Capital Management in 1998 was immensely destabilizing for the markets, it is really the exception that proves the rule. Most funds run modestly leveraged, since they do not want to incur a loss large enough to jeopardize the franchise. Today hedge funds are a key source of liquidity for the markets. They make markets more efficient, and can create value, since they often actively unlock corporate value by pressuring managements to make necessary changes. Would you rather buy a stock owned by a passive mutual fund or one owned by hedge-fund managers insistent upon corporate responsibility?
Did The US Treasury Manipulate The Gold Price Down?
Here's a really interesting article. You can read it yourself and judge how accurate it is.
Did The US Treasury Manipulate The Gold Price Down?
Here's some interesting parts of it...
Did The US Treasury Manipulate The Gold Price Down?
Here's some interesting parts of it...
On May 11, 2006, the gold price hit a 26 year high of US$719.75/oz. This represented a 50% increase from only November.
Clearly gold had reached a point of being overstretched, driven as it was by many factors including a newfound popularity amongst novice investors. A lot of this was put down to the recent availability of listed gold trading instruments. No one was particularly surprised that a correction occurred.
They were, however, somewhat taken aback by the sheer ferocity of the correction. Gold dropped 22% in five weeks. Heller noticed that, profit-taking aside, there was no change in the fundamentals that suggested gold should be in a long term boom market.
Those fundamentals have been well documented: the US deficit problem, increasing money supply, falling housing market and teetering economy; slowing growth in foreign investment in US dollar assets, and the potential switch to gold reserves; global geopolitical tension; global inflation.
In this climate the gold price collapsed. While there was a certain amount of stimulus from the world's largest paper gold market – Comex – in altering trading limitations and margin requirements, observers were also puzzled by a large influx of physical gold onto the market.
The amount of gold sold during this period appears to be in the order of 14 million ounces. Heller notes that no party has come forth to claim such significant sales. The reality is, however, that there are very few sources that could actually hold that amount of gold. (If you took, say, an average price of US$625/oz that would equate to US$8.75 billion.)
Undeterred by the anonymity, Heller suggested the seller could be narrowed down by considering who may have been the biggest beneficiary of the sale. That, he decided, was the US Treasury. The US dollar strengthened as the gold price fell. The US Treasury is one of few contenders who would have that much gold.
...
...
The Fed is currently stuck between a rock and a hard place. It has raised interest rates 17 times in order to curb inflation and support the US dollar in the face of deficit fears. If it continues to raise rates it runs the risk of tipping the US economy, already under pressure, into recession. If it stops raising rates then US inflation could run hard (and the oil price does not look like falling any time soon). Either way there must be downward pressure on the US dollar.
If there is downward pressure on the US dollar then the gold price will rise (barring manipulation).
Japan Land Prices Rise for First Time Since Early '90s
Japan Land Prices Rise for First Time Since Early '90s
TOKYO -- Japan's tax agency said the average price of land rose around the country for the first time in 14 years, lifted by gains in Japan's three major metropolitan areas.
The report signals that Japanese property values are slowly rebounding from a slide that began in the early 1990s.
The National Tax Agency's survey found the average price of land along selected major streets across the country rose to 114,000 yen ($994) per square meter as of Jan. 1, up 1,000 yen, or 0.9%, from a year earlier. The agency assessed land prices at about 410,000 locations.
Higher average land prices in five of Japan's 47 prefectures combined to push up the national average. Those five are home to the country's three major urban areas, which center on Tokyo, Nagoya and the western metropolitan region that includes both Osaka and Kyoto.
Average land prices rose in Tokyo for a second straight year, climbing 5.4% to 484,000 yen per square meter. While the average land price continued to fall in the remaining 42 prefectures, the rate of decline slowed in 33 of those districts.
Book Review: The Conservative Nanny State [How the Wealthy Use the Government to Stay Rich and Get Richer]
As most of you know I like reading about the economy and finacial policies and how they affect my investments. I just finished reading The Conservative Nanny State by economist Dean Baker.
Its a great book and a very easy read. Not as fun to read as Freakonomics : A Rogue Economist Explores the Hidden Side of Everything, but still extremely fascinating nonetheless.
Dean Baker explains how the wealthy are influencing government policy to make sure that money flows upstream from the poor to the rich. Not only that, but even policies that seem like they're designed to help protect the poor and middle class are actually designed to help rich corporations instead. He touches a variety of topics from illegal immigration to patents and tort reform, and even how CEOs are grossly overpaid. I finished it in 2 hrs and I couldn't put it down. He even has solutions, not that I believe anything will change but I strongly recommend it.
And its even FREE!! Just download it in PDF format.
Its a great book and a very easy read. Not as fun to read as Freakonomics : A Rogue Economist Explores the Hidden Side of Everything, but still extremely fascinating nonetheless.
Dean Baker explains how the wealthy are influencing government policy to make sure that money flows upstream from the poor to the rich. Not only that, but even policies that seem like they're designed to help protect the poor and middle class are actually designed to help rich corporations instead. He touches a variety of topics from illegal immigration to patents and tort reform, and even how CEOs are grossly overpaid. I finished it in 2 hrs and I couldn't put it down. He even has solutions, not that I believe anything will change but I strongly recommend it.
And its even FREE!! Just download it in PDF format.
And The Winner Is Inflation!
As I mentioned in a previous post about Exxon being the new whipping boy, I'm trying to find out whether the US economy is more likely to head into an inflationary period or slip into recession.
Based on several sources, I feel we will see inflation. According to Financial Sense,
Also of note, was this post on the Big Picture.
So whats the best way to hedge yourself against inflation? Invest in Gold, Silver, Oil wells, foreign currencies & mining stocks.
Incidentally, the WSJ reported today that inflation is up [only] 2.5% on an annual rate, the highest in 11 years.[yeah right!] The dollar slid, stocks were down and gold and oil were up.
Based on several sources, I feel we will see inflation. According to Financial Sense,
the U.S. is headed for another recession. Given the under-reporting of inflation, which overstates GDP, we may already be entering one. The only difference between the two camps is how it unfolds. As the U.S. enters into recession, tax revenues will decline and government spending will increase as a result of rising entitlements. Deficits will get bigger and the U.S. will have to borrow and monetize more of its debt. War, entitlements, and lack of fiscal restraint means more debt, more borrowing and debt monetization. Eventually the dollar is going to collapse through the weight of the twin deficits. Inflation—not deflation—will be the result. Our debts will only get larger. They will have to be inflated away. Our situation is beyond salvaging as Volcker did back in 1979-1987. It is now inflate or die. Eventually the debt will be paid or expunged, but it will not be through payment or default. Instead, as The Bank Credit Analyst stated in its July, 2003 issue, “The only way to avoid a destructive end to the super-cycle of rising debt and illiquidity may be to try and devalue accumulated debts through increased inflation.
Next year the new Medicare prescription benefit kicks in. In subsequent years the first batch of baby boomers will begin to draw on Social Security. Each year entitlements like Social Security and Medicare rise and then escalate as the retirement population expands. The War on Terror and Iraq War will cost even more money in the years ahead. Declining U.S. oil and natural gas production as well as increasing global energy demand will mean higher energy prices and bigger trade deficits. That will translate into a lower dollar. Today's U.S. is not the same U.S. of the 1930s. We are no longer self-sufficient in manufacturing, capital or energy. The savings rate in the U.S. is now negative. The 1930s was a different time. We were a different country. We were morally different than what we are today. In summary a different time and a different country mean a different outcome. Inflation— not deflation—is inevitable.
As of this writing the global monetary base has expanded by 20% over the last two years, the highest rate of expansion since 1975. The monetary aggregates are expanding again, with an increase of $30 billion in one week and $42 billion in the most recent report. Recent money growth is approaching 12.5% annualized. Contrary to popular opinion, money is not tight, but loosening. As shown in the previous graphs of the 1970s, high interest rates do not stop inflation. The only thing that can stop inflation is the limitation of new money and credit. Does anybody really believe that American voters will tolerate a recession before calling on government to end it? There are already calls for price controls on oil, natural gas, and gasoline. Got gold, silver or oil?
Also of note, was this post on the Big Picture.
"We get the distinct impression that consensus thought right here is that “inflation is a lagging indicator.”
Funny thing about this sentiment info is that the people who’re telling us that “inflation is a lagging indicator” are the same people who’ve told us all along that “there’s no inflation,” the same people who said gold couldn’t rally, the same people who said oil wasn’t going to stay at high levels, and the same people who said tech would be a leader, the same people who said the “Fed’s done raising rates” for a year, and the same people who said the Yanks were out of the race.
Plainly, these people are dangerous and we think inflation will work higher."
So whats the best way to hedge yourself against inflation? Invest in Gold, Silver, Oil wells, foreign currencies & mining stocks.
Incidentally, the WSJ reported today that inflation is up [only] 2.5% on an annual rate, the highest in 11 years.[yeah right!] The dollar slid, stocks were down and gold and oil were up.
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