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...]
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.
Are you burning down your city? How about looting? I didn’t think so. Most civil Americans look at what’s happening around their country and wonder, “What are these idiots doing?” But not the corporate titans, wealthy elites, Hollywood, progressives, etc. They’re living in shame, dealing with guilt, and want you to pay for it. “Hey, why don’t we sign a letter?” wonders another empty suit on bended knee to communist China. Behind closed doors, the corporate elite, you know, the ones with the huge stock options—they look at shareholders with disdain. Why? Because in board meetings, it's those … [Read more...]
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...]
Some corporate mission statements are now guided by words like “globalism” and “environment” rather than those of the business they’re in, or even traditional focuses such as shareholders, profit, and growth. Let’s get back to our roots and let “We the People” make the political rules. Glenn Greenwald writes at his blog on Substack: Large corporations have obviously witnessed the success of this tactic — to prettify the face of militarism and imperialism with the costumes of social justice — and are now weaponizing it for themselves. As a result, they are becoming increasingly aggressive … [Read more...]
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...]
The financial services business is booming. The keyword being “services.” Because as millions of existing and new retirees look for help, the demand for service is stretching some firms’ capacity to help them. Not Fidelity’s, because, as you know, Fidelity is #1. With all the talk about robo-advisers, one fact remains with automated services; nothing can replace a live conversation with a financial adviser. I know my customers. I know when their emotions are high, and that’s something I don’t see a robot catching. Service is a huge part of getting your finances right. I know you don’t … [Read more...]
In my conversation with you this week, we talked about the appropriate draw rate from your portfolio. We discussed how the days of a four percent draw are history. With interest rates nailed to the floor, you need to adjust accordingly. Thankfully, most of you have, I hope. Take a look at Dick Young’s investment North Star. That, in a nutshell, is how savers are penalized by Washington. Now, look at the dividend yield on the Dow Jones Industrial Average. Do the math. A simple back of the napkin calculation of a 50/50 portfolio yields a fraction of what it used to. These are not easy … [Read more...]
In my conversations with you, you’re telling me home prices are crazy. It really doesn’t matter where you live. Take, for example, a realtor and prospective client I was talking with yesterday. He operates in the mountain west and said he has tons of buyers, just no homes to sell. No supply. And that’s residential real estate today in a nutshell—supply. On a recent trip to Key West, we talked with a realtor getting ready to show a house as we were walking by. Curious, we asked if we could take a quick look. This tastefully done home was a perfect, cozy, old town Key West conch retreat. The … [Read more...]
Sometimes it’s hard to talk politics. So let’s talk about religion. Because when it comes to kneeling down in front of the stock altar, IBM has got some religion. I’m talking about DIVIDEND RELIGION—paying one since 1916. Can I get an AMEN! Look at the chart for my Survival Guy Stock above and consider life back in 1986 for a moment. Tom Cruise was lighting it up on the big screen with Top Gun. IBM? Not so much. (Talk about needing to put out a fire.) But it still paid a dividend that year. Sometimes setting it and forgetting it works wonders. What were you doing in 1986? Me? I was … [Read more...]
You’re telling me what friends are asking you the most. But first, let’s take a step back. You’ve been through a lot over the last year. Most of you stuck with me as we watched the world turn upside down. We lived to fight another day. Hey, I’m Your Survival Guy, not your "hope we make it" guy; what did you expect? You didn’t think I’d leave you behind, did you? You didn’t panic (maybe a little), you didn’t drop to your knees and raise your hands to the sky in despair (it’s OK, no one saw that), and you stuck to your plan (too scary not too). You made it through in your own way in one of the … [Read more...]