In Part I, I wrote to: You may want to pay attention to what public pensions are buying and, more often than not, do the exact opposite. Case in point, a few years ago this group loaded up on “alt-investments” and hedge funds. Don’t look now, but hedge funds, which charge an exorbitant 2-and-20 (2% per year on your assets under management and 20% of your investment gains), are going out of business left and right. And then, as reported yesterday in The WSJ, the California Public Employees Retirement System (CALPERS) spent more than $2 billion on Southern timberland and harvested the trees … [Read more...]
Don’t Manage Your Money Like This
In September of 1992, I outlined the tragic story of a MLB slugger, Jack Clark who had misspent his money and wound up in bankruptcy. I wrote: It’s Time for Bankruptcy Not for you of course. No, I’m writing to you about bankruptcy for Jack Clark, Boston Red Sox slugger, but this story carries a lesson for most of us. Now here’s a guy—a good guy, too—with a three-year Red Sox contract worth $8.7 million. And yet Jack is bust. He has listed $11.5 million in debts, versus only $4.8 million in assets. Clark owns 18 automobiles, including a $717,000 Ferrari. He dumped over $1 million into … [Read more...]
Will the Trump Administration Ding China for Currency Devaluations?
Speaking to the Financial Times, Treasury Secretary Steve Mnuchin mentioned that he would like to discuss currency devaluations by China as part of trade talks between the United States and the communist nation. Sam Fleming reports: The US Treasury secretary has warned China not to engage in competitive devaluations of the renminbi as the two countries spar over their economic relations and engage in an escalating trade war. Steven Mnuchin said in an interview with the Financial Times that the Treasury monitored currency issues “very carefully” and noted that the Chinese renminbi had … [Read more...]
LVMH: One of My Favorite Companies in the World
Next week I am heading to Paris to spend two weeks visiting LVMH retail locations in Paris, and each of the Palace Hotels, as well as the vineyards of Burgundy. In the case of LVMH, the company controls one of the world’s best portfolios of luxury clothing, Champagne and liquors. It is virtually unrivaled. The very best just never goes out of style. Reports the Wall Street Journal: Investors seem to be looking for any excuse to sell luxury stocks just now. This week it was slightly underwhelming third-quarter sales numbers from luxury conglomerate LVMH LVMUY -9.07% Moët Hennessy … [Read more...]
Commit This to Memory
Bond yields are rising, tech stocks look shaky, emerging market currencies are tanking, and in the midst of the longest bull market in history, September property sales in Manhattan are down 39% compared to 2017, with median sales prices falling 9% during that time. There are some warning signs flashing. What should you be doing now to prepare for a future downturn? In April of 2002 I wrote: Here is a historical goody that will offer you much comfort. In every stock market downturn since 1950, with one mini-exception, intermediate-term U.S. Government bonds have risen. Talk about the power … [Read more...]
Stocks Crater 831 Points
On a day where the Dow shed 831 points and tech heavy Nasdaq lost over four percent, many bonds made money. It’s a simple, yet important, reminder of how counterbalancing works. Originally posted on Yoursurvivalguy.com. … [Read more...]
Higher Interest Rates are a Positive
Yesterday’s stock market rout has been at least partly attributed to rising interest rates. With bond yields up, investors who were once pushed into the stock market by the likes of Ben Bernanke and Janet Yellen are finally getting some well deserved respite under Chairman Powell. The President isn’t happy about rising interest rates, blaming the Fed for the sell-off, but he should be. Many of his retired and soon to be retired supporters are in favor of higher interest rates. A little air coming out of the stock market isn’t a bad thing. Stock prices have been distorted for years by … [Read more...]
Trump Powers Economy into the Mid-Term Elections
As November approaches, and voters begin to make their decisions about who they will vote for on Election Day, the economy is roaring hotter than it has in a long time. Confidence is soaring, profits are up, jobless claims are down, unemployment is down, and industrial production is up. These among other indicators show the economic strength the Trump administration has generated with its business-friendly governing style. … [Read more...]
It’s Time For Investors to Focus on Treasuries
It’s time for investors to focus on Treasuries. As stocks tumbled 3% yesterday, Sinead Carew wrote at Reuters: NEW YORK (Reuters) - U.S. stocks tumbled on Wednesday, with the S&P 500 marking its biggest daily decline since Feb. 8, and technology stocks led the losses as rising U.S. Treasury yields sent investors fleeing from risky assets. The Dow Jones Industrial Average .DJI fell 831.83 points, or 3.15 percent, and the Nasdaq Composite .IXICdropped 315.97 points, or 4.08 percent, to 7,422.05. Read more here. … [Read more...]
Your Retirement Life: A Dire Warning
You may want to pay attention to what public pensions are buying and, more often than not, do the exact opposite. Case in point, a few years ago this group loaded up on “alt-investments” and hedge funds. Don’t look now, but hedge funds, which charge an exorbitant 2-and-20 (2% per year on your assets under management and 20% of your investment gains), are going out of business left and right. And then, as reported yesterday in The WSJ, the California Public Employees Retirement System (CALPERS) spent more than $2 billion on Southern timberland and harvested the trees at depressed prices to … [Read more...]
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