Happy first Monday of 2022. Your Survival Guy’s gas stove is broken. Not a great way to start the week. But the good news is there’s still natural gas. We have heat. This isn’t like the disaster a few years ago where we lost heat on the coldest day of the year due to a disaster with the supply of natural gas. This is a “me” problem (the best kind for you). A piece to our gas stove pilot is shot and needs replacing. Now, Your Survival Guy’s gas stove happens to be an Aga. You know those porcelain stoves in an English farmhouse with doors on the front, cooktops, and a chimney? That’s us. It’s … [Read more...]
BOND BLOWUP? Don’t Lend Your Money to Blue States
OK, blue-states are drowning in pension debt that may or may not be paid—think Illinois. And yet these cities and states are issuing more debt in the form of municipal bonds. Is that good or bad for investors? Last year the S&P Municipal Bond Index was up 1.76%, but when you dig into the guts of it, there are plenty of reasons, at least for me, to be concerned. Number one on my list is the average duration of the fund—with its 212,627 constituents—is 12.13 years. This isn’t covered in the article I quote below, but it’s a major factor in the fund’s future performance if interest rates … [Read more...]
STEADY YOURSELF: When Bad Stuff Happens, Do This
One of my favorite investing quotes is from the late, great Jack Bogle, founder of Vanguard and creator of the index fund. In good times and, especially in bad, I love this quote. You know from my piece yesterday that investors have a way of doing the opposite of what they should. For example, when you’re unloading the groceries, and a dozen eggs fall to the floor, you might hear, “Don’t just stand there, do something!” The same reaction occurs when bad stuff happens to the stock market. This is when questions are asked, “Did you see the market today? How’s our money doing?” Bogle knew … [Read more...]
If It Ain’t Broke Don’t Try and Fix It
You and me? We’re the same. We’re simple people. We like simple quotes that wrap up life in a tidy package with a red ribbon. Here’s a couple of quotes I’m thinking about this morning. “If it’s too good to be true, then it probably is,” and, “If it ain’t broke, don’t fix it.” Simple. Concise. Easy to understand. Why, then, for cryin’ out loud, do investors mess with these truisms, and make a mess of their life’s savings? I’ll try and explain. Let’s start with the first one. Real easy. Say it out loud with me, replacing “it” with “an investment(’s).” Here we go, “If it’s too good to be true, … [Read more...]
Boom: An Arc-Flash Explosion on Billionaire’s Row
“The developer of 432 Park Avenue, one of the world’s tallest and most luxurious condominium towers, on Wednesday filed its answer to a $125 million lawsuit from the building’s condo board over alleged construction defects, calling the board’s suit ‘ill-advised’ and ‘an effort to wrest unwarranted payments’ from the developer,” reports The Wall Street Journal. “The answer, filed in New York State Supreme Court by an entity controlled by Los Angeles-based CIM Group, also alleged that the complaints raised by the board had been ‘vastly exaggerated.’” Sounds like a problem to Your Survival … [Read more...]
Understand the 800-Pound Gorillas in the S&P 500
OK, this stock market is top heavy. Remember, you buy the stock market when you buy a 500 index. But do you know how that index works? Look at the S&P 500 for example. Sure, it's 500 stocks, but about a third of the index is dependent on five companies. Why? Because it's a market cap weighted index meaning the size of a company, its market cap (price times shares outstanding) dictates its influence. “Remember when a trillion dollars was a lot of money?” asks Spencer Jakab in The Wall Street Journal’s Heard on the Street feature, “Gigantic Stocks Are a Reason to Worry.” Five companies … [Read more...]
Your Job as an Investor Is Not What You Think
I hear it all the time. “I don’t understand bonds.” So I’m going to clear that up for you. But first, let me just say, it’s a real disservice to successful Americans like you to be told, ad nauseam, that we’re in a “bond bubble of epic proportions.” Listen, I want you to be a calm, cool, and collected investor, not a mad man. Talking stocks is a holiday tradition. But the reason you own bonds—wait for it—is so you can own stocks. That’s it. Period. End of story. That’s all you need to know to understand bonds. Look, the stock market discounts everyone’s best and worst ideas. Putting your … [Read more...]
Even CNN Admits Biden is Failing WORSE THAN CARTER on the Economy
You know that throughout his campaign and so far during his presidency, CNN has coddled the Biden administration like a newborn. Never seeking to offend, only to deflect, defend, and defuse any criticism directed at Biden or his inferiors. So it's with some surprise that you may have seen CNN's Harry Enten write an article highlighting new polling showing that Biden is failing Americans on the economy even worse than Jimmy Carter. Enten writes: President Joe Biden is struggling in the minds of the American public. While his approval rating is down on a slew of issues, his difficulties are … [Read more...]
NO MATTER WHAT: You Need to Get Paid
Let’s stay on the subject of making sure you get paid in times of trouble no matter what, just like Tony Soprano. Because any time you invest, you’re using your own money to create interest, dividends, or rent, and preferably all three. I’m not interested in price increases and selling assets. I want you to think like an owner of a multitude of assets. I remember my dad telling me how, as a teenager, he would collect for his dad’s rental properties. Some of them were in rougher neighborhoods, and his dad would tell him: “You stand to the side of the door when you knock. You never know … [Read more...]
Meet the Tony Soprano of Your Portfolio
"I like people who don't need everyone to like them." -Tony Soprano, 'The Sopranos'. There’s been some yappin’ lately about bonds. Why own bonds when yields are so low? Let me explain. In times of trouble, look at who gets paid first, and you realize why bonds tend to do fine when the stock market falls apart. Look how Treasuries saved portfolios earlier this century. When you invest your cold hard cash, you’re lending your money to the street, if you will. Think about your bond money like it’s Tony Soprano. Do you think Tony liked it when he wasn’t paid? Does anybody? No. But … [Read more...]
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