45 posts tagged “investing”
A governor, or speed limiter, is a device used to measure and regulate the speed of a machine, such as an engine. I have taken that concept and applied it to finance. You put in place a governor that limits the speed at which you could potentially lose money.
Here is how I apply it:
- I try not to buy disposable products. Why throw money in the garbage?
- I place stop loss orders for every stock/ETF I own at 4.5% below its cost basis. My upside is not capped but my downside is.
- I play video poker with a $2 bankroll. If I lose it, I'm done. But I have the potential of winning much more with 4 deuces or a natural royal flush
- I use alternative income streams rather than bet everything on a single business venture. Collecting aluminum cans, getting paid to read email, getting paid to watch Internet ads, getting paid to search, and getting paid to post tweets has no explicit downside risk
IMHO, US Treasuries are the next financial bubble to burst.
- The Fed has been buying Treasuries bonds in an effort to lower borrowing costs and end the worst U.S. economic downturn in 70 years. Its holdings of Treasuries edged up to $759.80 billion from $757.77 billion last week. However, the Federal Reserve's program of buying Treasuries will end in October.
- Even the Chinese, one of the largest buyers of Treasury securities, are buying fewer treasuries. They are buying gold with their US Dollars.
- Yet investors are making huge bets on bonds. In the last six months they have allocated double the amount of new money to bond mutual funds as they did over the entire four years from 2003 through 2006! All academic studies agree that poor market timing decisions are the rule rather than the exception among mutual fund investors.
- Besides that, the federal government actually needs high inflation down the road. Why? So they can pay off this low interest debt with cheapened dollars. Debtors gain during inflationary times.
- It's not just me questioning the current price of treasuries.
Looking at the next 18 months, I see higher yields on the
10-year and the 30-year. Bond prices fall when interest rates rise. With
fewer buyers and a falling US dollar, higher rates are inevitable. Get into TMV or TBT while they are on sale! My earlier posts on bonds should help you.
I talked about water being the new blue gold. It is more precious that oil, yet grossly under priced. Since I made the call on June 11th, CGW has soared from $15.95 to $17.53 - a 9.9% gain. Plus you get a nice dividend at the end of the year - 7.36%.
You can learn all my stock secrets by ordering "Computerized Tools For Profitable Investing" Just click my donate button in the sidebar.
The picks I shared with you on this blog included the following tickers - DGP | GAZ | TBT | DXDDX.
Here were my original posts so you know I'm not just faking things and you can get some further analysis:
how-to-play-the-demise-of-the-us-dollar | where-should-i-put-my-money | where-should-i-put-my-money-part-2
Based on the date of those original posts and Monday's closing price, here is what they did:
DGP went from 19.75 to 23.35
GAZ went from 16.11 to 15.92
TBT went from 46.30 to 46.20
DXDDX went from 20.98 to 23.60
A 5.75% gain if you owned all of them.
Stay away from GAZ because of the crackdown on commodity based exchange traded funds and notes. Replace it with a natural gas company like CLNE or CHK (both of which I own).
Start averaging into TBT. I'll explain why you should short the Treasury market in a future blog post.
Thinking of chucking it all and retiring early, long before you start getting a pension or Social Security, and before you have ready access to your 401k and IRA?
Better run through this calculator and get a dose of reality. http://www.firecalc.com/
We all have seen the real estate bubble unfold because banks, brokers, buyers, regulators, and Wall Street all looked a blind eye. Less conspicuous, but just as damaging, was the greatest financial crime in history. Today I will attempt to document how governments, regulators, brokerage firms, and foreign banks are crushing the retail investor.
- Deutsche Bank is liquidating the PowerShares DB Crude Oil Double Long ETN (DXO). Deutsche Bank said: “Limitations imposed by the exchange on which Deutsche Bank manages the exposure of the Notes have resulted in a “regulatory event” as defined in the terms of the Notes, which has caused Deutsche Bank to redeem the Notes.”
- In an effort to stem the effect that the seemingly inevitable regulation will have on futures-based commodity funds, multiple ETF issuers have halted share creation. Thus, these securities trade at huge premiums to the underlying commodity (market distortions).
- FINRA announced that it would be increasing margin requirements for leveraged ETFs as of Dec. 1. These changes will require margin for leveraged funds to be "commensurate" with the degree to which they are leveraged. FINRA's warning set off a domino effect as firms like Edward Jones, Ameriprise, and UBS ceased selling leveraged funds to investors.
- Switzerland’s oldest bank, is telling wealthy clients to sell their U.S. assets, or switch banks, because of concerns new rules will saddle investors with tax obligations in the USA. U.S. proposals to extend reporting requirements for banks whose clients buy American stocks and bonds coupled with estate tax liabilities have put Switzerland’s traditional bank secrecy at risk.
- Canada's Royalty Trusts are similar to U.S. master limited partnerships in that they generally pay out a substantial portion of their cash flow in the form of monthly distributions. The Canadian government wants a piece of that. In 2001, in what has come to be known as the "Halloween Surprise" for its announcement on October 31st, 2006, these trusts will have to change their structure and their payouts or face huge tax consequences.
Wizetrade
The projections of the Wizetrade software are almost identical to charts of moving averages. Moving average data is free and up to date on Yahoo finance while Wizetrade charges almost three grand. I haven’t spoken to one serious trader that relies on this type of software to manage a successful portfolio.
InvesTools
Prices start around $1000 and can go up to $10,000+. They try to keep the cost a secret until you attend one of their workshops, then you get the hard sell According to their SEC filings they have graduated over 320,000 and only about 1/3 (98,000) are still Investor Toolbox subscribers. Huh?
Bottom Line
The only people that make money from these are the people that sell them to you. If you can afford $3, I'll link you to the scientific approach to trading the market. It takes all the emotion out of buying and selling, and teaches you bankroll management. What have you got to lose? Oh yeah, thousands of dollars on software that doesn’t work!
