When legendary Dow Theorist Richard Russell was still alive, he wrote about the three phases of a bull stock market. He’d write to his valued readers that you know you’re in the third phase when everyone’s talking about stocks (or dogecoin, or bitcoin, etc.). The third phase of a bull market is full of FOMOs—buyers with a “fear of missing out” on the next best thing, like lemmings jumping off a cliff. The third phase is crazy, fueled by emotion, with a narrative that goes something like this: It’s different this time. Well, yes, every day is different. And there are plenty of stories telling … [Read more...]
When Stocks Drop by 33.9%, 49.1%, or Even 56.8%
There’s a time when you’re most vulnerable as an investor. It’s not when you’re knee-deep in work, with retirement waaay off in the distance. It’s when, as you dream about retirement, you look at your statement and do some mental math: when can I retire? You realize, hmmm, I’ve got some money, but I need “X” dollars to retire. I need to make “X” percent on my portfolio to get there. Now, with this dream in mind and a portfolio full of stocks, your palms get a little sweaty when the market drops by 800 points or so. You’re paying a little closer attention to the down days. Maybe a little too … [Read more...]
What Is Your Purchasing Power Going to Be?
What is purchasing power? Well, if you bought your house in the 60s or 70s, you know exactly what it’s not today—it’s not power. It’s more like weakness. Take a look at the median income and median real estate sales through the years, and you tell me what’s happened to purchasing power (weakness). Remember, the “median” eliminates the big outliers that can skew the average. Median is the middle number. For example, in a sample of 30 houses, the 15th house is the median. You can see on the chart that from 1963 on, the growth of the median price of a house has outpaced the growth of the … [Read more...]
There Are Plenty of Ways to Invest in This Market
You have plenty of ways to invest in this market if you’re A) dividend-centric (I am) and/or B) looking for a proxy to some of your bonds. Take a look at the charts below and understand what’s happening in the market today. Stocks by Dividend Decile Here you see a breakdown of stocks by dividend yield decile. The 8th Decile, not the tenth, had the better performance from 1975-2020. Caitlin McCabe reports at The Wall Street Journal on today's bull market: A greater number of stocks have been propelling the U.S. market higher lately, a signal that—if history is any … [Read more...]
How Did You Save So Much Money? I Really…
When I ask you, “How did you save so much money?” your answer tells me a lot about you. Because, when you respond, “I really don’t know, to tell you the truth, just hard work and saving like crazy,” I know it’s not what you did to save money, but what you didn’t do. Yes, you had to work. How else were you going to put food on the table? And yes, it would have been easier to do nothing. But that’s not how you roll. Yes, winning the lottery would have made things easier for sure. But, most of you made your money slowly, year after year, and it never got easy. After a while, you realized … [Read more...]
NJ Deli $35k in Sales, $100 Mil Valuation
In times like these everyone looks like a winner. What could possibly go wrong? Investors have driven the market valuation of an over-the-counter traded company that owns one deli in Paulsboro, New Jersey to $100,000,000. The deli only generated sales of about $35,000 in the last two years. Recently, hedge fund manager David Einhorn used the stock as an example of the mania taking place in markets today. CNBC's Jesse Pound reports: The Paulsboro, New Jersey-based Your Hometown Deli is the sole location for Hometown International, which has an eye-popping market value despite totaling $35,748 … [Read more...]
The Three Bubbles Threatening Your Portfolio Today
OK, it’s time to talk about bubbles. Investor Jeremy Grantham of GMO fame has called a few bubbles over his stellar career. He sees three today: Bonds, stocks, and real estate. Your Survival Guy, not famous at all, fought through the live-fire of managing client money during two brutal bubbles already in this young century. It wasn’t easy, but we got through it. That’s what I see today. Knowing how to survive the worst of times is an acquired skill, and I’ve seen my share of it. When I think about a real estate bubble, I think about you. What can you do today or in the next few years to ease … [Read more...]
Crushing Words to Avoid: “We’re Disappointed in You”
It’s breathtaking looking at prices today and thinking about what things are really worth. I know, I know, worth is whatever someone else is willing to pay. What a bore. But, what if you’re not in this to be a seller? What if your interest is the wellbeing of your family, and selling isn’t your end game? Where, instead, you’re caring for your investments, like your love for a child, in perpetuity. Would you ever sell your child? Most of the time, the answer is no. Thanks for the memories! When you’re working in a family business, as I do, you understand the fear of disappointment real … [Read more...]
Why Service Is King in 1(800)# Teenage Wasteland
Service is King, even today when many financial firms treat it like the Joker. Try getting a copy of your 1099, or figuring out a K-1. What you’re faced with is, perhaps, hours in a phone queue maze with no satisfactory answer. Some of these firms, not Fidelity, are too big and end up failing simple tasks. Other’s are left offering funds that are too big (like some of Vanguard’s) and then fail to meet the needs of investors (such as ESG funds from BlackRock and others) while trying to save the world. All you want is what you asked for, is that so hard? For some, in a word, yes. Action Line: … [Read more...]
Inflation? Yes.
You don’t need to read the latest Producer Prices report to see that inflation is here. All you need to do is go for a walk around your neighborhood to see home prices, go shopping for groceries, or open the utility bills, and you see higher prices for all. Pandemic or not, prices are higher. You don’t have to be a genius to understand what China’s attempting to accomplish with its foray into digital currencies. Tired of buying worthless Treasuries, they want a plan B. What happens when China steadily tries to replace the dollar as the reserve currency? Both China and the U.S. government … [Read more...]
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