Joe's Investo-Blog

To My Clients:

Our accounts are up 5.3 % for the Quarter and up 11.2 % for the year 2010 to date.

Even though the broad stock market indexes are all down over 10 % this past quarter, we have been fortunate once again to show positive returns in our accounts with a targeted and conservative approach. Our tech stock, Sandisk, was up over 20%, our gold stocks were up 12% and our long-term treasury bonds were up 10%. The largest portions of our accounts remain invested in cash and short-term treasury securities. Short-term interest rates will remain at historic lows and we expect long-term interest rates to continue to decline even as federal debt surges.

The alleged “recovery” recently has been showing signs of weakness and debt problems continue across the globe leading to volatility and weakness in the stock markets. There is considerable discussion among economists and analysts as to whether we will enter into a double dip recession. We don’t necessarily agree and tend to follow a recent new term to describe the current outlook for the economy which is “muddle through”. Read more…

Asset Allocation, Banks, Bonds, Economics, Gold, Inflation/Deflation, Markets, Portfolio Management Asset Allocation, Bonds, debt, Economics, economy, fiscal policy, liquidity trap, monetary policy, Portfolio Management, stock market, stock picks, Stocks, strategy, The Fed

To My Clients:

Our accounts are up 5.4% Y-T-D and up 25.1% for the last twelve months.

The markets continue to show buoyancy as the economy very slowly begins a recovery. To a degree, this is largely a result of the Fed’s ineffectual efforts of getting money in circulation. Using the lowest interest rates in generations, the tactic is still seeking evidence of success. The curse of our banking system that in order to create money in circulation, it is wholly dependent upon loan and debt creation to inject money into the economy. However, consumers having been severely burned, no longer want to be in debt and, banks likewise, don’t really want to lend, sometimes even to their best credits. Money in circulation cannot grow unless people borrow and banks lend. Given the recent rising markets, it appears that banks are largely pumping and loaning money into financial assets instead of into bricks and mortar businesses that create jobs. Full recovery will still take some time.

Having said all of that, the economy is Read more…

Asset Allocation, Banks, Economics, Financial Crises, Gold, Markets, Portfolio Management, Stocks Asset Allocation, Banks, collapse, debt, Economics, economy, monetary policy, performance, Portfolio Management, stock market, Stocks, strategy, The Fed

By JAMES ALTUCHER

Last Updated: 4:51 AM, April 18, 2010
Posted: 1:21 AM, April 18, 2010

http://www.nypost.com/p/news/business/rally_believing_it_D49EqJdvdwnjU0aHSrGygJ

The data suggest that the economy is starting to surge upward. Here are 25 statistics and anecdotes that suggest that the strength in the economy is real:

1. Average hourly wagesare $18.90, up from $18.52 a year ago. (Before employers hire full-time, they get their workers to work overtime, resulting in higher pay).

2. Aggregate weekly hours worked is the highest it’s been since June 2009 — again, suggesting overtime. Only so much overtime can be worked before hiring begins.

3. Industrial production index up 9 months in a row after plummeting 13 percent from December 2007 to June 2009.

4. Retail sales up 10 percent year over year.

5. GDP last quarter showed 5.9 percent annual growth.

6. Initial unemployment claims have gone from a peak of 643,000 in April 2009 to 480,000 now.

7. The Greek debt crisis seems to be ending without major fallout in the form of other nations defaulting.
Read more…

Asset Allocation, Markets, Portfolio Management, Stocks Asset Allocation, performance, Portfolio Management, stock market, Stocks, strategy

To My Clients:

Our accounts are up 24.1 % for the year 2009.

Our accounts, together with the stock and bond markets, have performed quite well this past year despite large holdings in each account of low yielding T-bills and Treasury bonds. It is still quite difficult to find reasons not to continue our successful defensive strategies of the past three years in which we’ve been quite fortunate to obtain positive returns in each year.

The credit crisis is far from over, and although there are indications that the recession is coming to an end, it also appears that it will be a far from robust recovery. The best that can be said of the economy is that it has stopped declining. Employment continues to lag and will continue to be a severe drag on any recovery. In spite of the Federal Reserve’s efforts to stimulate monetary growth, it is not happening, as banks remain fearful of lending and continue to leave their reserves on deposit at the Fed. What little stimulus we are seeing seems to be finding its way into the financial markets so far, with little to show in the real economy.

The dollar has been declining for most of this past year with only recent signs of a turnaround. This has contributed to our Read more…

Asset Allocation, Banks, Bonds, Currencies, Economics, Financial Crises, Gold, Inflation/Deflation, Markets, Portfolio Management Asset Allocation, Banks, Bonds, Currencies, debt, deflation, economy, exchange rates, Gold, inflation, monetary policy, performance, Portfolio Management, stock market, strategy, The Fed, trade

Humor, Portfolio Management, Stocks collapse, Humor, Portfolio Management, stock brokers, stock market, Stocks

HOW LITTLE WE KNOW

by Harry Browne

August 22, 1984

You’ve probably had the experience of reading a newsletter’s (blog’s) explanation of what is about to happen in the world. The writer presents a sensible, logical, compelling argument that something is inevitable based on what has gone before and where we are now. His case is so plausible and rational that it’s obvious he must be right.

But then you pick up another newsletter (blog) and find another preview of the inevitable -and it’s exactly opposite to the forecast in the first newsletter. And the second writer’s arguments are just as logical, sensible, plausible, and rational as the first writer’s.

Which one are you supposed to believe? The question could be critical. Each writer might be urging you to invest all your capital in line with his forecast. To choose wrongly could be disastrous.

So how do you decide which one of them is right?   Read more…

Asset Allocation, Economics, Gold, Humor, Markets, Portfolio Management, Stocks Asset Allocation, deflation, Economics, economy, fraud, Gold, Humor, inflation, performance, Portfolio Management, stock brokers, stock market, stock picks, Stocks, strategy

Humor, Markets, Portfolio Management, Stocks Humor, performance, Portfolio Management, stock brokers, stock market, stock picks, Stocks, strategy

by Jonathan Clements

Wall Streeters talk a great game. The real challenge, however, is figuring out what they are really saying.

Below are 33 phrases often heard on Wall Street and how you might interpret them. The list was compiled with help from investment advisers William Bernstein, Eleanor Blayney, Harold Evensky, Deena Katz, Ros Levin, Gerald Perritt and Larry Swedroe. I also got a hand from Journal colleagues Greg Ip and William Power.

But my biggest debts are to Kevin Berozott, an investment adviser in Camarillo, Calif., and John Rekenthaler, research director at Chicago’s Morningstar Inc., both of whom shipped me e-mails filled with hilarious examples.  Read more…

Humor, Markets, Portfolio Management, Stocks Humor, Portfolio Management, stock brokers, stock market, strategy

To My Clients:

Our accounts are up  5.7 % Y-T-D.
The Dow Jones Average is down 3.75 % 

Very briefly, the administration is soon to engage in massive stimulus fiscal spending while the Federal Reserve continues its massive monetary stimulus activities. While these endeavors always take time to filter into the economy, the stock market and the bond market have recently been somewhat buoyant, not necessarily because an economic recovery is imminent, but possibly because of the monetary stimulus taking place. The U.S. Treasury is making enormous demands on the bond market with the huge amounts of debt it needs to sell to finance the fiscal spending and the Federal Reserve is accommodating the Treasury by purchasing large portions of the U.S. Debt.  Read more…

Economics, Financial Crises, Markets, Portfolio Management Asset Allocation, economy, fiscal policy, monetary policy, performance, Portfolio Management, stock market, Stocks, strategy, The Fed, US treasury

To My Clients:

Our accounts were up 1.01% during the first quarter of this year.  The major stock market indexes are all down between 3-13%.

The current recession, the longest and deepest in decades is the result of massive debt defaults and deleveraging. Banks are now undercapitalized and are preserving capital by tightening lending standards (if they lend at all) resulting in a vicious cycle of a shrinking economy making money become even more scarce. Read more…

Asset Allocation, Banks, Bonds, Economics, Financial Crises, Gold, Markets, Portfolio Management Banks, Bonds, collapse, debt, economy, fiscal policy, Gold, monetary policy, performance, Portfolio Management, stock market, strategy, The Fed

I’ve submitted a few of my posts to a mainstream investment website, and guess what? They published them. Then to make matters worse, Carl Ayers who publishes IAWATCH, read my article about how a Bernie Madoff scam can never happen with a “traditional investment advisor” and called me on the phone for an interview for *his* article about how to prevent Bernie Madoff scams from happening again. He quotes me in his final product as follows: Read more…

Portfolio Management fraud, Portfolio Management

There is yet one other indicator that almost perfectly and successfully has predicted recessions and recoveries, yes, it’s the yield curve. You can count on a recession when the yield curve is flat, negative or inverted. Furthermore, you can count on economic growth when the yield curve has a positive slope. Given that the yield curve was flat or inverted for most of ’06 and ’07 were we really *that* surprised that a recession landed on us in ’08? And again, what does the yield curve portend for the future when it turns positive? Read more…

Asset Allocation, Economics, Markets, Portfolio Management Banks, collapse, Economics, economy, performance, stock picks, Stocks, strategy

I’ve been out of the stock market entirely now for over a year having sold everything in October of ’07. I’m starting to get fuzzy warm feelings about some of the super blue chips that have been accumulating huge balances of cash on their balance sheets. In this situation, there’s no question that they will survive the recession, will have dry powder coming out of it, and will likely thrive and prosper afterwards. These stocks are Read more…

Portfolio Management, Stocks Portfolio Management, stock market, stock picks, Stocks

Capitulation theory holds that when when everyone throws in the towel and is “sure” the market is going further down, that it will then actually go up. A derivative theory, the front page/cartoonist theory holds that when you finally see doom and gloom on the front page of newsmagazines or in the cartoonist’s columns, then “everyone” now “knows” the market is going down further and, yep, at that point it starts going up… or so goes the theory.

Very Best Regards,

Joe

Markets, Portfolio Management economy, performance, Portfolio Management, stock market, Stocks, strategy

To My Clients:

This past year we continued the full defensive strategy we adopted in late 2007. It has certainly performed well as the stock markets literally collapsed. In all candor, the positive performance in your account is the most gratifying performance of my entire 26 year career. While we continue to stay away from stocks in general, in late November we began Read more…

Economics, Gold, Markets, Portfolio Management Bonds, collapse, Economics, economy, fiscal policy, Gold, monetary policy, performance, Portfolio Management, stock market, strategy, The Fed

I saw an article this morning stating that one of the largest hedge fund investors, also burned by the Bernie Madoff scam, is now demanding of all hedge funds in which it invests, that they begin using independent administrators immediately or risk immediate withdrawal of invested funds: Read more…

Portfolio Management fraud, Portfolio Management, strategy

Yep. There’s yet another cardinal rule that tells you when to get into the market and when to get out (more or less). It has never failed me and following it, helped me avoid entirely the catastrophic markets last year and turn in positive performance for 2008.  You’ve all heard it before but let’s review because it does work. Read more…

Bonds, Economics, Gold, Markets, Portfolio Management, Stocks Bonds, Economics, economy, fiscal policy, Gold, monetary policy, performance, Portfolio Management, stock market, Stocks, strategy, The Fed

I must confess that last years positive portfolio performance is the single most gratifying performance I’ve experienced in my entire 26 year career. I was fortunate to have been able to perceive a deepening credit crunch (thanks to our concerns about the excessive debt and leverage in the economy) and aggressively followed an ancient investment rule, to wit; Read more…

Economics, Gold, Markets, Portfolio Management, Stocks debt, Economics, performance, Portfolio Management, stock market, stock picks, strategy

“Traditional” asset management carries with it one cardinal rule which, by definition, simply does not permit a Bernie Madoff style fraud, ponzi scheme, or any other generic scam. By now most have read about the collapse of the Bernie Madoff hedge fund as roughly $50 billion of investor funds vanished in what turned out to be a gigantic ponzi scheme and the largest scam ever. What the heck is a “hedge” fund anyway and why can you be scammed by them? Simply put, a hedge fund is an investment fund whose clients are “accredited”, meaning they have assets in excess of $5 million and income in excess of $200k. These investors are deemed by the SEC as wealthy enough to know what they are doing and in no need of SEC assistance or protections. Hence, hedge funds are minimally regulated by the SEC if at all. The key is, hedge funds take your money and do whatever they want with it. Due diligence is up to you and you alone. Having said all of that, we all know that gullibility is no respecter of persons, wealthy or not. 

But what about that traditional asset managment rule. It’s as old as business and trade itself and not quite as old as the oldest profession, but it has certainly existed as long as money has. Even in gambling, experienced bettors always know that to protect themselves from a scam or fraud they always follow this one rule Read more…

Portfolio Management fraud, Portfolio Management