My charts (the Fed’s EKG) on high powered money and M2 growth point clearly to undisciplined chaos at the Fed. Do you see any instance of such chaos in preceding decades? No! Indeed, payday will arrive. The table indicating my own program of gold buying gives you a look at one of a number of moves I made last spring to balance myself for the inevitable comeuppance. At our family investment counsel firm, we emphasize ongoing strategy discussion, featuring new issue corporate bonds, dividend-paying Swiss franc denominated stocks, and currency and especially high US dividend-paying … [Read more...]
Dump All Low Yielding US Treasuries Now
Today we have a situation where the Fed has forced individual investors with life-time savings to subsidize corporate buybacks, acquisitions, and Wall Street banking industry borrowing and speculating. It’s what I call de facto robbing and stealing. In reality, the Fed is nothing more than a private club to favor corporate and banking elites. When the Federal Reserve was first established in 1913, Congress directed it to “furnish an elastic currency, to afford means of rediscounting commercial paper” and to establish a more effective supervision of banking in the U.S. The Fed’s duties … [Read more...]
My 10 Point Investment Plan: Pretty Much the Same as Back in 1990
Back then I offered subscribers to my investment strategy report a ten-point investment guide for the long term. The basic plan is today, thirty years later, pretty much unchanged. Make capital preservation your number one target Make dividends the cornerstone of your core equity portfolio Never forget the power of compound interest Make equities, not bonds, your core holdings. When general market conditions are horrible, and most folks are selling, aggressively buy your dividend stocks Use automatic withdrawal programs for retirement income Don’t trade in and out … [Read more...]
Gold’s 50-Year Price Explosion
Part I I was there from the start. In early August 1971, I had just joined internationally focused research and trading firm Model Roland & Co. On 15 August 1971, President Nixon shocked the world by announcing that the U. S. would no longer officially trade dollars for gold. At that time, gold’s fixed price was $35/oz. By 1980, gold would hit an astronomical $800/oz. OK then, back to Model and the firm’s wonderful head partner Leo Model. From my first day onboard at Model, I started covering a bevy of major Boston institutional accounts. I was 30 years old, and I would become … [Read more...]
Your Portfolio Could Use This Investment as a Powerful Insurance Policy
There are very few real counterbalancers available in an asset bubble like the one being blown today by the Fed and other central banks. One investment I have found to be reasonably reliable as a counterweight insurance policy is precious metals, specifically gold and silver. Is there downside risk in buying metals? Of course. Here’s how I previously explained that risk: Relative to gold, silver is cheap. The higher the gold/silver ratio, the cheaper silver is. The historical gold/silver ratio has been 15:1. Today, it is 53:1. Central banks do not own silver, which they could dump on … [Read more...]
My Biggest Investing Quarter Ever
Due to a convergence in timing, I was able to make by far the biggest commitment to the stock market in my life during late March and into the second quarter of 2020. On 31 March 2020, I posted My Three Week-Long Investing Program. It led off, “I am ramping it up over the month of April and into May." As reported 30 June in the WSJ, U.S stocks finished their best quarter in 20 years. I also posted the exact areas I was investing in and why. No way I could have expected such quick and massive returns. Given that Joe Biden is apparently attempting to put a quick end to it all by … [Read more...]
How to Invest Today
It’s time for a change in pace. Since the end of March, the Dow has exploded from about 18,500 to over 25,000 as June nears an end. During this period, I steadily added to my equities position as well as to my individual bond positions. I also added to three fund positions (nearly 50% fixed) that I have owned for decades (not index funds) as well as to smaller positions in gold and the Swiss Franc. In the coming quarter, I plan to increase my focus on fixed income. My four biggest concerns today are (1) the Fed’s balance sheet and (2) the historically low level of U.S. government … [Read more...]
You Want the Limo, Not the Public Bus
Your investing future does not have to be relegated to a public transportation type of experience. You have a choice. And you can go in first class comfort or, instead, take a seat in the back of the bus. Here’s what I mean. To start, don’t spring for yesterday’s investments – stock index funds or most equities centric funds. Don’t settle for government bonds that pay virtually nothing today, or for casino-like big S&P 500 stocks that pay no dividends but often sell for criminal market cap-to-sales ratios. By now you undoubtedly realize that robo-advisors, whatever they are, offer … [Read more...]
Trump Cavalcade Drives America Back to Business
Debbie and I have traveled up the East Coast countless times over the last many decades. On every trip, we take inventory of the health of America's small-town Main Streets, pedestrian activity in towns, and truck activity on the highways, among many other inference reading signals. Last Friday we were traveling again. That day, news dropped of the record-setting job gains in May. The stock market soared, with the Dow Jones Industrial Average closing up 829.16 points. While liberal economists like Paul Krugman wrote the report off as a conspiracy theory, the evidence of America's jobs … [Read more...]
Here’s How Tiny Sweden Beat China
Tiny remote Sweden, partially sitting in the polar region, is home to only a little over 10 million souls. China, meanwhile, is a massive country, home to nearly 1.4 billion. You may not think Sweden would have the wherewithal to defeat China in any theater of competition, but in one growing industry, Sweden is prepared to dominate its Chinese rival. In the race for 5G technology leadership, Sweden’s Ericsson may be about to best China’s Huawei. Or, more accurately, Huawei’s ties to China’s Communist Party government are about to blow the technology company’s chances of a worldwide 5G … [Read more...]
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