Prediction-Joe average is about to get screwed

This is how investors get screwed.

Right now there fleeing the stock market and going into bonds.The 10 year treasury is yielding less than 3%--3%--now tell me who would tie up their money for 10 years for less than 3%-only people that think there will be no economic growth,the economy sucks and will suck for quite some time.
Anyway, As their pulling money from the stock market and putting it into bonds the market is going to have a huge rally then all of a sudden interest rates start going up and the 10 year bond that was yilding 3% is now up to 5%.These bond holders see the market hitting new highs and at the same time their losing value on their bonds because a 10 year bond yielding 3% is worth less than a 10 year bond yielding 5%.
So what do they do? See,this isn't rocket science,they sell their bonds at a loss and go into the stock market near the top and guess what? Their screwed again


See I can make wild ass predictions just like those fancy wall street strategists.And just like them I actually believe in my prediction.But unlike them i am going to follow the trend of the market. I might make a prediction but I sure as hell am not locked into it.

Down down down and the flames went higher- Part 2

So back on july 11 I advised taking some kind of defensive action and I'm pretty sure the one other person that reads this blog did nothing.
July comes to an end with the s&p down 3.9% for the week and 2.2% for the month.
On top of that comes this story from the great predictors that I have told you are clueless

WASHINGTON (MarketWatch) -- Leading economists on Friday began marking down their growth estimates for the rest of 2011 in response to data showing first-quarter growth of just 0.4% and second-quarter growth of 1.3%. Deutsche Bank lowered its third-quarter growth estimate by a percentage point to 2.5% and cut its fourth-quarter estimate to 3% from 4.3%, IHS Global Insight said third-quarter growth will be probably less than 2% and possibly less than 1% vs. its prior 3.4% forecast and Capital Economics said a 2% third-quarter view is "more plausible" than its prior 2.5% forecast. "Previously, we highlighted the possibility that the economy was on the brink of a growth recession - a sustained period of below trend growth typically accompanied by rising unemployment," said the Deutsche Bank economists. "The disappointing Q2 GDP results and downward revisions to the prior three quarters lead us to believe that this indeed is the case."
Gee what a freaking surprise. Next you'll start hearing from the great brain trust of market predictors that will start lowering their predictions on where the market will end the year.
I can't emphasize enough that you have to find someone that knows what there doing,knows how to read charts,knows how to take defensive action.
Capital preservation-no one knows whats going to happen when they get this debt ceiling straightned out and anybody that tells you differently is full of crap

steve jobs should run treasury

Here's something to keep in mind as you follow this evening's congressional debate over the debt ceiling.

According to the latest daily statement from the U.S. Treasury, the government had an operating cash balance of $73.8 billion in at the end of the day yesterday.

Apple's last earnings report (PDF here) showed that the company had $76.2 billion in cash and marketable securities at the end of June.

In other words, the world's largest tech company has more cash than the world's largest sovereign government.

That's because Apple collects more money than it spends, while the U.S. government does not.

Are you one of the people taking all your money out of the market?

This is always so interesting to me.

The problem is most people just guess where their money sould be. They have no reliable way to decide and thus rely on the news or what they hear from someone else.

They get in at the highs and they get out at the lows and they do it consistently.

Trust me there are way better ways of making your investment decesions.

Anyway,here are the latest numbers and you can see people are fleeing stocks and piling into bonds.

Your 401k allocation needs fixing so what are you waiting for?

Your a lawyer, a doctor, an engineer, a programmer, a recruiter, a administrator, a salesman or whatever and you don't pay any attention to your investments, especially your 401k allocation.
It behooves you to call me. I want to help you. Think about it, you might call a plumber for a plumbing problem, a lawnman to cut your grass, a roofer to fix your roof, an electrician to fix your electrical problem.
Then why not call someone to fix one of the biggest problems you have, one that effects the rest of your life, one that your ignoring, your 401k allocation.

Bad advice from firms that should know better

it only took me 20 years to learn this

http://moneywatch.bnet.com/investing/blog/fund-watch/bad-advice-from-firms-who-know-better/672/

The 401k mindset vs the new car mentality

I met with a couple of prospects this week . One is a relatively new investor who has about $20,000 in his 401k plan but has no idea of what funds he is in or why he is in them. The other was someone who has about $500,000 in their 401 k but guess what, he also has no idea of what funds he is in or why he is in them.
The new investor when I ask him about his plan tells me he is young and retirement is so far away he doesn't see any point in worrying about it. The other guy is thinking about retirement but he also pays little attention to it except to see what the monthy account is worth.
It makes a huge difference to be in the right sectors and to pay attention to the overall market.
Since 3/2009 when the indicator i use turned up to favor stocks over bonds or cash the s&p is up 77%,the barclays aggregate bond fund is up 6.83%.So someone please tell me why your not paying attention or at least finding someone to help you pay attention. Whats ever more startling is that the small cap index is up 0ver 140% and midcaps are up 121%.
The really sad part is that both of the fellows above could have quite a bit more money if they would find someone that knew what they were doing.
Both of these felllows drive brand new bmw's and were telling me how much time they put in to doing the research to get the best buy.
So they spend hours worrying about buying a depreciating asset but spend no time managing an asset that they need to appreciate throughout their life.
If this hits home at all you need to talk to me and at leat let me show you how I can be of help.

If your looking for yields of 8% and more

Here's an idea if your looking for higher yield.Absolutely not as safe as those 10 year govt bonds yielding less than 3% but these have performed pretty well.
Do your own research

PASADENA, Calif. & LISLE, Ill.--(BUSINESS WIRE)-- The Boards of Directors of Flaherty & Crumrine/Claymore Preferred Securities Income Fund Incorporated (NYSE:FFC - News) and Flaherty & Crumrine/Claymore Total Return Fund Incorporated (NYSE:FLC - News) today approved new regular monthly dividend amounts to be paid in August.

The new regular monthly dividend rate for FFC will be $0.136 per share, which equates to an annual dividend of $1.632 per share. This new monthly dividend represents an increase of approximately 4.6% over the prior monthly dividend.

The new regular monthly dividend rate for FLC will be $0.1395 per share, which equates to an annual dividend of $1.674 per share. This new monthly dividend represents an increase of approximately 3.3% over the prior monthly dividend.

The August monthly dividend will be paid on August 31, 2011. Record and expected ex-dividend dates will be announced early next month.

Donald F. Crumrine, Chairman of the Boards of the funds, said “We are very pleased that both funds continue to deliver on their objectives of high current income. The continued recovery of the funds’ net asset values allowed them to increase their borrowings throughout the first half of the fiscal year. Earnings from that additional borrowing, together with very low borrowing costs, allows the funds to earn additional income that can be distributed to shareholders.”

FFC and FLC were organized in 2003 as closed-end, diversified investment companies. FFC invests primarily in preferred securities with an investment objective of high current income consistent with preservation of capital. FLC invests primarily in preferred and other income-producing securities with a primary investment objective of high current income and a secondary objective of capital appreciation. FFC and FLC are managed by Flaherty & Crumrine Incorporated, an independent investment adviser which was founded in 1983 to specialize in the management of portfolios of preferred and related securities. Flaherty & Crumrine also manages two other U.S. closed-end funds: Flaherty & Crumrine Preferred Income Fund (NYSE:PFD - News); and Flaherty & Crumrine Preferred Income Opportunity Fund (NYSE:PFO - News).

Website: www.fcclaymore.com

Contact:
Press and Analyst Inquiries:
Flaherty & Crumrine Incorporated
Donald F. Crumrine,
626-795-7300

Danger Will Rogers

The s&p chart is making a classic step down pattern-meaning its making lower highs and lower lows. Not a good sign for the market. Really need to keep your eye on this chart.

The financials are horrible. This is a place,the financials, where i tell my 401k clients that they should put at least part of their 401k monthly contribution into.If you have a financial mutual fund in your 401 k i highly recommend that kind of strategy since your avg. in at a low cost basis.

The relative strength of stocks vs. money market is weakning but still favors stocks over anything else. I still have my hedge,the inverse s&p and will keep it until or if the s&p makes a higher high.

Stay alert will rogers!!!!!!!!!!!!

Tipping a waiter 20%-Where in the Hell did that come from

Ok--This is my question. On thursday we go out ot eat at the Outback and the check is like a $150 for 4 people. Since we tip usually 20% that was a $30 tip. On saturday we go to the prime rib and the check is $330. So the tip is $66.

Now I start thinking, the waiters at both places were good. They took our orders in a timely fashion,served our food in a timely fashion and made sure to ask if everything was ok.Why in the hell does the guy at the prime rib deserve a $66 tip for delivering food.The prime rib was about $50 while at the outback a steak was about $20. But what I'm getting at is why am i tipping a guy based on the value of what he serves? Does it take more effort to serve a $50 steak than it does to serve a $20 steak?

What's even more outrageous is the price of drinks.A bottle of wine at the prime rib is like $60, a bottle of wine at outback is like $26. Why am I tipping a guy $12 to serve a bottle of wine at one place and $5.20 at another?

Something is wrong with this system. I'm not exactly sure what to do about it but leaving a $66 tip for the same service I left a $30 tip for seems kind of insane

More Easing--Oy Vey

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke said on Wednesday the central bank is ready to ease monetary policy further if the economy weakens and inflation moves lower, suggesting policymakers are actively mulling further stimulus.

This is why the market is rallying today and this is the reason I am adding to my SDS which is a short of the S&P 500.

I've said it before and i'll say it again--It's all about capital preservation!
Although the trend is still up as far as I can tell the market is very shaky and I want to protect my clients until the trend is more definitive.

Down down down and the flames went higher

So here we are after a pretty nice rally over the last several weeks .So is this a normal pullback or is this the start of something bigger? I'm pretty sure cnbc is bringing out all the doomsayers today but to be quite honest NOBODY knows.

So what to do? For my clients I have bought a starter position in sds which has made a double bottom and has turned up. SDS is a etf that double shorts the s&p 500. I am not selling any of my long positions but this is a hedge to see how it plays out .

The trend is still up for stocks and relative strength of stocks vs. bonds or cash is still in favor of stocks. What is troubling is the previos high on the s&p was in the 1370 back range back in May, it went down to the 1260 area and then rallied up to 1350 before turning down again. What this means is that it made a lower high which to me means there could be a problem.

Bond yields are dropping which means there are some serious problems. If people are willing to take a yield of less than 3% on a 10 year govt bond is very troubling.

The Orioles and Trend following

Here's a good example of the difference between trend following and listning to so called experts make predictions on what's going to happen and than base your decesions on those predictions.
I'm a huge orioles fan,have been my entire life. Hasn't been easy the last many years but i've stuck by them and every year have high hopes.But lets face it the trend is and has been down for many years.This year they went out and brought in some new players that were going to score runs and the bullpen and starting pitching was going to be better and so on and so forth.A lot of so called experts were predicting that they would be much improved but when your in the same division as the yankees and red sox its hard to improve that much. Anyway,as usual the experts are wrong,the orioles are the same as they've been,their trend is still down.Until the trend changes you can only expect things to remain as they've been.
The same goes with investing,all the experts can tell you what they "think" is going to happen,where the market,economy etc will be in a year but they really are only guessing.What you need to do as an individual investor is block out all the noise of these talking heads and just follow the trend .when the trend is positive for stocks you need to be in stocks.Just because some blowhard on cnbc says that the economy sucks is not a reason to bail out of stocks if the trend is up. When the trend changes you of course need to change but don't listen to what other people predict just be smart and follow the trend

It's not freaking rocket science

Ok-someone was asking me how I manage money and I told him I compare stocks bonds and cash as a starting point and whichever is strongest based on relative strength is where i over weight. Since 3/09 its been stocks and from there I look to see what is stronger large cap,mid cap, small cap. Hands down its been small cap than mid cap and lastly large cap.

Well when do you make changes he asked? I told him I follow the trend,when the trend changes I change.

I've been doing this for quite a while and I can tell you its not rocket science. All one has to do is follow the trend. Of course most people aren't interested in watching their money so they have someone fill out a form that shows them to be conservative, aggressive,fairly aggressive,hugely aggresive and so on and so forth. And this person than allocates their money to 5-10 mutual funds and in all likelihood they rarely ever hear from that person again and they stay allocated that way for ever. They usually discover this after some market disaster. Once that passes and they have regained most of their money they go back into hibernation until the next disaster. Never realizing that maybe they could have avoided some of the disaster by just following the trend.

Back in the 2001-2002 dot com era,if they would have followed the trend they could have saved alot of the down.In 2008,the housing disaster they could have followed the trend and avoided alot of the down, And than in 2009 when the market turned up,the trend changed to positive,they could have mad a lot of money .

Every major firm on wall street is constantly telling you where they "think" the market will be in 2 months, they tell you where they "think" the economy is going.The sad part is peopl actually rely on these asinine predictions. No one can predict anything. It is what it is. And you need to understand that if you want to hold onto your money.

If these guys were so freaking smart why didn't they tell you to get out of the market back in the dot com era or that housing prices were going to collapse

If your in bonds you need to read what morningstar is saying

http://systematicrelativestrength.com/

The retail investor is missing the entire rally--Is this you?

The Investment Company Institute is the national association of U.S. investment companies, including mutual funds, closed-end funds, exchange-traded funds (ETFs), and unit investment trusts (UITs). Members of ICI manage total assets of $11.82 trillion and serve nearly 90 million shareholders. Flow estimates are derived from data collected covering more than 95 percent of industry assets and are adjusted to represent industry totals.



Retail mutual fund investors continue to pull the most money from domestic equities—the asset class with the best YTD performance.

If someone tells you they use modern portfolio theory run for your life

This is a good little article if your the least bit interested in why i like momentum investing and why i think mpt is a crock


http://www.advisorperspectives.com/newsletters11/26-momentinv2.php