Friday, October 30, 2009

EWI Reads FDRAOA


What's a little plagiarism among friends?

In their pricey Financial Forecast November issue, Elliottwave International finally picked up what I've been showing readers for nearly a year (and here and here and here):

EWI's Pricey November 2009 Issue's FDRAOA Duplication:

Wednesday, October 28, 2009

Portfolio Watch


FDRAllOverAgain now offers a vse.marketwatch.com-audited Portfolio Watch service. It lets subscribers watch a trading portfolio in real time, along with detailed, running results.

Although many days may be tradeless, or even positionless, the objective of Portfolio Watch is to demonstrate a very strong positive annual return when positive returns are rare, not necessarily to daytrade.

My audited portfolio began trading on October 14, 2009 at $100,000, in order to simulate a fairly typical trading dollar amount. Marketwatch's Virtual Stock Exchange (VSE) does not allow the use of options, so I will occasionally use simple leverage to simulate buying or shorting a derivative position. This has the advantage of being easy to follow and understand. The site's welcome screen displays a brief message explaining my current trading stance or administrative info.

Of course, this service is for entertainment purposes only and does not constitute investment advice. There is no guarantee of a positive return.

Subscribers receive a password via email to gain access to the portfolio link. Viewing the portfolio requires joining vse.marketwatch.com. VSE uses an email address as your user ID, but that can be a non-working email address as it is never validated.

Click here to subscribe to Portfolio Watch, this will allow you to view the Marketwatch-audited portfolio and trades in real time.

Thursday, October 15, 2009

Prospering During Deflation

"My favorite time to hold a stock is forever"
-Warren Buffett
With prices across America in the first phase of historic collapse, it's essential to reject the conventional "wisdom" that brought us this mess.

First, embrace lower prices. Lower prices are good for everybody. Capital gains speculation is irresponsible (I borrowed that word from modern socialist taking points just to annoy them) and should never form a large percentage of a comprehensive investment portfolio. Note, I'm using the word "investment" correctly, to describe the purchase of cash flow. When rip off artists driving our financial media use the term "investment" or "investor" they really mean someone who tries to attack and destroy companies through capital gains speculation. Let's be clear, ripping off a company is not an investment in that company.

Capital gains speculators are not investors. Speculators are people who want to buy low then sell high. They want to steal a piece of an organization and run. Virtually every educational institution teaches this stupidity as if it is viable method of creating wealth, using a flat broke staff of academic professors. Let's be clear about another thing, if you learned anything about money it in the halls of academia, it is completely wrong.

Capital gains speculation is about as close to throwing cash in the can as you can get, without actually dumping it. In fact, if you dump your cash somewhere you can often deduct it from your taxes, making in far more profitable than placing it with a speculator like a banker or broker, or speculating with it yourself.

The reason is obvious, ultimately, capital gains speculation is nothing more than a pyramid scheme, and you have to be pretty gullible to think any scheme is going to pay out over the long haul. Yet, almost everyone in the modern world is guzzling the pyramid-scheming socialist central bank's Kool-aid. That's exactly why the great majority are buried in incurable debt--the socialist's pyramid is in the process of collapse.
Note: I use the word "socialist" properly too--someone who wants the many to bear an equal burden supporting the privileged few.
You don't need to depend on corrupt government socialists exponentially expanding spending to thrive from their inflation of prices (or suffer as it deflates prices). You can actually make money instead of trying to snatch it via speculative pricing schemes. This is called, "investing."

Happily for investors the seemingly endless era of criminal inflation is over, at least for a few decades. The crime kingpins have once again destroyed their own phony credit for cash pyramid, and that makes investing extremely attractive.

Beat the rush.

Investors buy cash flow, they don't speculate on wild schemes to push prices higher. Investors pass cash flow positive assets on to their children. They intend to hold forever, because they aren't trying to leave some sucker with a wad of worthless paper. Investors want prices to fall, they want paper and real estate assets to become more affordable so they can buy more, at the same time bestowing greater buying power upon existing cash streams.

The key to prosperity for the rest of our lives is understanding the difference between "speculation" and "investment." Build an investment portfolio.

Lucky for people wanting to switch to investing, there has never been a better time to see the light. During Federal Reserve inflationeering (like a Disney Imagineer who can only draw Dumbo), investors are driven away by rising prices. During Federal Reserve implosioneering (kabooms are more interesting than floppy-eared elephants) and eventual bankruptcy, investment is grandly rewarded by falling prices. We live in the world of deflation, a return to the era of investment.

The first thing an investor notices, is that tax policy is sometimes on your side instead of working against you. That's because investors approximate or are businesses and should strongly consider incorporation. As such, capital outlays, or investments, are generally deductible. Cash flow beyond living expenses (salary) can also be taxed at a lower rate. There are a few things our tax policy actually gets right (for the time being), and rewarding investors more than speculators is one of them. Most people don't understand it.

Let's look at one of the most attractive investments during deflation: buying cash. Unlike what most were taught in the womb, cash is an asset during deflation. Plus, it is nearly risk free. It is hard to beat the risk/reward profile of cash. Buying cash as as simple as trading work to obtain it, or trading other assets for it. Once you hold it, cash starts producing cash flow. Yes, you can get a little interest on cash buy allowing the Treasury to protect it (don't risk it in banks, they will speculate it away), but I'm not talking about interest, I am talking about falling prices. As prices fall, idle cash in hand generates a steady stream of positive, spendable, cash flow.

If you have a lot of cash, you might need to protect your cash using Treasuries. Using the Treasury's relatively new C of I is a great way to stay completely liquid while protecting an unlimited number of cash flow notes.

If you work, another way is to decrease your W-4 exemptions to 0, so the government withholds the maximum amount of cash from your paycheck. This pool of government-protected cash isn't liquid after 30 days like a C of I account, but it is effortless and most people's time is worth more than a few pennies of interest. If you bank get's locked in private FDIC legal arbitration, or you are over the insurance limit, they'll mail a tax refund right to you.

The idea here is not return on capital, it is return of capital.

Lastly, there is the perennial favorite fire and water proof personal vault. Don't forget that boobie traps and overwhelming firepower can also function like investments. B e the bank. This one can pay off big when there is no cash accessible, ATMs are emptied by the first 10 in line, the world is in a panic to pay negative yields while migrating vulnerable bank account balances into the Treasury. You'll be growing your own cash at home.

How Unemployment Has Ravaged America


October 15, 2009:
Update: Subtract Atlanta.

October 11, 2009:
When you hear "10% unemployment" that's just ongoing government claims.

The majority of the unemployed do not, or can no longer make a claim. Shadowstats.com reports our total unemployed at 23% (chart does not include the latest BLS release):



During the Great Depression, they counted total unemployed. That number peaked at 24% in 1932.

I get the feeling most people don't understand the un-fixable devastation that has already wrecked the United States' economy, particularly our metropolitan areas. The following table shows the population of America's 100 largest cities:

  • 23% unemployment is the same as the cumulative population of the dark red cities. That is, people on the unemployment dole, or who have given up looking for a job.
  • The bright red city of Milwaukee (#23) is the number of unemployed that we added last month (new goverment paychecks)
  • The population of Indianapolis (#14) is how many jobs we lost the month prior.
  • San Fransisco (#12) is equal to the worst month in 2009.
  • Last month, the BLS said they understated all of those numbers by 875,000, about the population of Detroit (#11).
  • The blue cities represent the current total number of unemployed workers, counting from the top down.

Rank

City

Population

1

New York


8,363,710

2

Los Angeles


3,833,995

3

Chicago


2,853,114

4

Houston

2,242,193

5

Phoenix

1,567,924

6

Philadelphia

1,447,395

7

San Antonio

1,351,305

8

Dallas

1,279,910

9

San Diego

1,279,329

10

San Jose

948,279

11

Detroit


912,062

12

San Francisco


808,976

13

Jacksonville

807,815

14

Indianapolis


798,382

15

Austin

757,688

16

Columbus

754,885

17

Fort Worth

703,073

18

Charlotte

687,456

19

Memphis

669,651

20

Baltimore

636,919

21

El Paso

613,190

22

Boston

609,023

23

Milwaukee


604,477

24

Denver

598,707

25

Seattle

598,541

26

Nashville

596,462

27

Washington

591,833

28

Las Vegas

558,383

29

Portland

557,706

30

Louisville

557,224

31

Oklahoma City

551,789

32

Tucson

541,811

33

Atlanta

537,958

34

Albuquerque

521,999

35

Fresno

476,050

36

Sacramento

463,794

37

Long Beach

463,789

38

Mesa

463,552

39

Kansas City

451,572

40

Omaha

438,646

41

Cleveland

433,748

42

Virginia Beach

433,746

43

Miami

413,201

44

Oakland

404,155

45

Raleigh

392,552

46

Tulsa

385,635

47

Minneapolis

382,605

48

Colorado Springs

380,307

49

Honolulu

374,676

50

Arlington

374,417

51

Wichita

366,046

52

St. Louis

354,361

53

Tampa

340,882

54

Santa Ana

339,130

55

Anaheim

335,288

56

Cincinnati

333,336

57

Bakersfield

321,078

58

Aurora

319,057

59

New Orleans

311,853

60

Pittsburgh

310,037

61

Riverside

295,357

62

Toledo

293,201

63

Stockton

287,037

64

Corpus Christi

286,462

65

Lexington

282,114

66

St. Paul

279,590

67

Anchorage

279,243

68

Newark

278,980

69

Buffalo

270,919

70

Plano

267,480

71

Henderson

252,064

72

Lincoln

251,624

73

Fort Wayne

251,591

74

Glendale

251,522

75

Greensboro

250,642

76

Chandler

247,140

77

St. Petersburg

245,314

78

Jersey City

241,114

79

Scottsdale

235,371

80

Norfolk f[›]

234,220

81

Madison

231,916

82

Orlando

230,519

83

Birmingham

228,798

84

Baton Rouge

223,689

85

Durham

223,284

86

Laredo

221,659

87

Lubbock

220,483

88

Chesapeake

220,111

89

Chula Vista

219,318

90

Garland

218,577

91

Winston-Salem

217,600

92

North Las Vegas

217,253

93

Reno

217,016

94

Gilbert

216,449

95

Hialeah

210,542

96

Arlington

209,969

97

Akron

207,510

98

Irvine

207,500

99

Rochester

206,886

100

Boise

205,314

The USA's political-economc system is best described as:

On Nov 2, 2010, I plan to vote (FOR or AGAINST) my incumbent congressman

 
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