Check out the number of S&P 500 stocks trading at more than ten times their sales. I’m not talking about ten times earnings. This is sales. You know, the price you pay for your house, your groceries, your heating bill—not the profit the company selling to you hopes to make. Imagine if the world you and I live in was priced this way? It would make inflation look like a drop in the bucket. Well, that’s how these companies that index funds are buying hand-over-fist are priced. Look at the number of S&P 500 stocks trading for more than ten times their annual sales on the chart below. … [Read more...]
You Invest, They Win
The founder of the largest hedge fund in the universe, Ray Dalio, tweeted this from Burning Man:
Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity!
Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best.
Are these the guys you want running your money? You invest, they win. But hey, it’s not about the money. It’s about saving the planet man.
Because if it’s about the money (Dalio has a personal net worth of $19 billion) then this hedge fund lost to a boring Vanguard fund that uses a conventional mix of 60% stocks and 40% bonds.
The article doesn’t come out and name the fund, but perhaps you, as a long-time reader of our websites, know the name: Vanguard Wellington.
You might also know what Vanguard founder, the late, great, Jack Bogle, meant when he said: “The grim irony of investing is that we investors as a group not only don’t get what we pay for, we get precisely what we don’t pay for.”
The captains of the investing universe are living their “best life” at whose expense?
Yours, of course. You invest, they win. Read more below.
THE NEXT BIG SHORT: Paulson Predicts Crypto Will Go to Zero
You may remember hedge fund manager John Paulson from the movie The Big Short. He was the one that couldn’t believe what was happening in the real estate market and believed the system would implode. He was right. Now he’s dead against cryptocurrencies, much like Your Survival Guy. In a recent interview with Bloomberg's David Rubenstein, Paulson described cryptocurrencies as "a limited supply of nothing." He also predicted the speculative asset would go to zero. The NY Post reports: Hedge fund manager John Paulson made $20 billion predicting the downfall of the US housing market in 2008. … [Read more...]
Can We Still Afford the Riverboat Cruise?
Are you falling for the oldest trick in the book? Here’s how it reads. Managers today draw you in with low-cost index funds and past performance—not necessarily in that order. Then, once you’re in the door, they sell you on other stuff, like toxic variable annuities, until you’re blue in the face. It’s hard not to fall for the sales pitch. I get it. Here’s what happens. It’s Sunday morning. You don’t have a care in the world. Frank Sinatra is playing in the background. Life is good. Then you peel open the quarterly funds report in the Journal and look at the performance like a box score … [Read more...]
IT’S A GAMBLE: First Bitcoin ETF Will Be Loaded with Risk
Fund companies are racing hard to be the first to offer a bitcoin ETF. The Wall Street Journal's Michael Wursthorn reports on the risks of such funds, writing: Despite the additional safeguards, investors in such funds would have to deal with issues associated with trading futures, as well as the risks around cryptocurrencies. Todd Rosenbluth, head of ETF and mutual-fund research at CFRA, warned that futures-based ETFs rarely replicate the performance of the underlying market they track. The reason is pricing fluctuations between futures contracts and the spot market, especially if demand … [Read more...]
TAKES ONE TO KNOW ONE: Even Soros Doesn’t Like Xi
You might know George Soros by his career as a global financial manipulator, or by his "retirement" job as a global political manipulator. During both parts of his life, he spent a lot of time in China, and Soros is no fan of Xi Jinping. He writes in The Wall Street Journal: Xi Jinping, the ruler of China, suffers from several internal inconsistencies which greatly reduce the cohesion and effectiveness of his leadership. There is a conflict between his beliefs and his actions and between his public declarations of wanting to make China a superpower and his behavior as a domestic ruler. These … [Read more...]
Index Funds Put Politics Ahead of Shareholders in the Boardroom
When most shareholders invest in funds, they assume the decisions made by fund managers will be fiduciary in nature. That means the decisions should benefit the investors, not the fund managers, or their CEOs' EGOs. But as fund managers like BlackRock gather more power in ESG funds, they're becoming more active in boardrooms, pushing political agendas, not those of the shareholders. Dawn Lim and Justin Baer report in The Wall Street Journal: Investors have flooded into index-tracking funds in the past decade in hopes of getting broader access to the market at a lower cost. One unintended … [Read more...]
ESG Ratings Are a Subjective Mirage
Big fund companies like BlackRock, led by their EGO-focused CEOs like Larry Fink, have created an entirely new industry for themselves out of pushing ESG (environmental, social, and governance) funds onto unsuspecting investors who want to make the world better with their money. While investor intentions are good, funds companies are more interested in the higher fees they can charge for saving the world than in actually driving change. The way you know that's true is the complete mish-mash of what these fund companies consider acceptable in their ESG products. The ratings they use for … [Read more...]
Democrats Trying to Cut Taxes for the Wealthy?
Democrats are working hard to cut taxes for the wealthy. Yes, you read that correctly. While Democrats are normally found calling for raising taxes on the wealthy, that isn't the case for many when the wealthy taxpayers affected are also major campaign donors. The cap on the State and Local Taxes paid (the SALT cap) set in place by the 2017 Tax Reform hit wealthy people in high tax states the hardest. Wealthy residents from places like California, New York, and New Jersey saw significant tax increases. Those high tax states happen to be home to many of the Democratic Party's biggest … [Read more...]
A WIN FOR BLACKROCK: Biden Throws Small Landlords Under the Bus
In 2018, the IRS recorded over ten million returns that included income from rental properties. That's more than just the "top 1%." There are millions of middle-class Americans who have invested in rental properties to achieve goals like putting their kids through college or saving for retirement. The moratorium on evictions created to help families through COVID-19 has put a lot of pressure on these landlords who must maintain properties, even if their tenants aren't paying rent. Here's the story of one landlord, Buddy Shoup from Spectrum News 1: When Buddy Shoup was 6 years old, he … [Read more...]
THE GREAT RESET: You Could Be Forced to Rent a House from BlackRock
If Klaus Schwab, John Kerry, and Bill Gates get their way, you won't own a home, in fact, you'll own very little at all. Private ownership creates inefficiencies, and inefficiencies generate more greenhouse gases, so if the Great Reset is going to work (for them), you need to give up what you own, starting with your home. Don't worry though, BlackRock's Larry Fink, another global climate change warrior for hire, is more than happy to buy your home and rent you another. Kit Knightly explains at Off Guardian [my emphasis added in bold]: The incipient “Great Reset” is a multi-faceted beast. We … [Read more...]
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