November, 2011

Immutable Fact:

The social obligation of business is to sustainably maximize long-term profits for shareholders.  Nothing more.  Nothing less

~Milton Friedman

Socialist Fiction:

...Corporate executives should cooperate with the government at the expense of the interests of their employers and their fiduciary duties, because that is “socially responsible.”

~ the Teleprompter

The Professional Opinion

None this month because I forgot to renew my subscription.

Buy Recommendations

Dollar Cost Average on the Dips is what the last radio show said.

 Gold Eagle - Minden,  Nevada
Gold Eagle looking for lunch near Minden, NV.  

The last time I saw a gold eagle was at a rescue shelter and why was it at a rescue shelter?  

Did it get hit by a car?  No.

Was it shot?  No.  

It was there because the f&^%ing indians captured it and pulled out all its wing and tail feathers to use in their satanic rituals,  leaving it on the ground to die.

And we as a nation are still sending these primitives monthly checks?

One of the many perversities that could be recitfied with the stroke of a pen. 

Personal Portfolio
My own personal version of the 'Twist' worked out very well, especially for my wife.  Twisted in and out of Huntsman and Annaly several times last month, adding more shares of both Huntsman and Annaly.

BGS foods continues to lead the pack  in percentage gain for the year. ERTS has done better, but that's only a token amount.
End of the World - Again

I seem to remember something about the bible stating that the only entity that knows when judgment day is coming is God himself.  If that's the case, I would think that three false prophecies would make for a false prophet.

In the interim,  buying up Huntsman again and making some change was  a pretty good prediction. I'm thinking buying a little more MGM will also bode well.  The entertainment industry seems to be experiencing something of a rebound and some of these stocks are worth a look.

I also think DOW chemical is an attractive buy and I think I am also going to talk about Netflix and all the trials and tribulations they have been going through.
I think there maybe an opportunity there.


The Dump

This was how  the month started and that was the time to start doing some buying, which I did.  I hope a few of you did too.

Personal Portfolio

What about those banks?





Needless to say, this portion of the portfolio has not done well at all.  A large portion of this I blame directly on our anti-business government.  The other portion I blame on me in failing to understand just how anti-business this current administration is.

If I was looking to invest in these four banks,  I would be investing in the order shown above.  HBAN I think is a good regional bank and it will only perform better over time.  CITI is a strong second, considering its international exposure.  Goldman got crucified by the teleprompter and new regulations, some of them in my view anti-American, make for some strong headwinds and I think only a change in leadership will really help.  BofA  is now the poster child for the home mortgage problems and I think any new money invested in this bank will be, well........problematic for the forseeable future.

A strong economic recovery cannot take place without a strong banking and financial sector.  Many of the gains we've been seeing in the market this month have been on very thin trading volume, which tells me there is a very large lack of conviction in any economic recovery going forward.

Investing in a few financial stocks at these levels could prove rewarding in the future but to what extent and for how long is anyone's guess.   I would treat any monies invested in this sector as speculation until we  have a more business friendly government.

Old Business:  What  happened to my  version of the 'Twist'?


My version of the 'twist' involved selling NLY and buying HUN when HUN's share price tanked in relation to NLY,  and then buying back NLY when HUN's share price surged.  

I was able to pull this off three times in October due to the volatility in the market.

This left me with a lower cost basis for replacing the NLY shares, and a new position in Huntsman.  It's kind of like shorting without  having to open a margin account.

The icing on the cake would have been  to collect the NLY dividend as well but the stars weren't totally aligned.

Anyway, it's something to think about.  All it requires is a high beta and a low beta quality stock, and some patience.

Speculation Time


I think Netflix was way oversold and at these prices,  owning a small position was too hard to resist so I picked up shares in the low 80's.  What amazes me is that after seeing the backlash from Netflix customers,  that Coinstar did the same thing and jacked up  their prices too.  I think Netflix's share price will recover over time and one must remember that memories are very short anymore.  

 Man's Worst Nightmare

This loud mouthed b!&%$  has caused me more grief than any other financial 'guru' with her frequent exhortations  of  'You have to do this now!', staring into the camera with that  psychotic gaze,  trying to convince the females in the audience that if you're not doing what she's exhorting now, why your family financial future is at stake!  

Buy the Book!  

Buy the CD!  

Take Action NOW!

It's enough to make one gag.

The only time I watch parts of the show is when I can't figure out how to flip channels when it's being TIVO'd.

My Top Four  Major Gripes - AKA  Guaranteed Heartburn 101:

Claim 1:  The markets are basically going to meltdown in 2012 because of higher energy and food prices.

Comment:  Complete Bull Crap. There is no basis in reality for this claim unless she fancies herself a seer as well. 
Perhaps she and Harold Camping should hook up.

Claim 2:  You have to set up a living trust and if you don't have one,  you have to do it now!

Complete Bull Crap.  It depends on your  where your assets are and how many assets you have. 

This is  the most hyped up bunch of garbage I've run across in years.

Do yourself a favor before you get led down this path which is guaranteed to drain your wallet by first finding out which assets are not appropriate for living trusts and / or  are passed on neatly and legally without  a living trusts.  Retirement accounts come to mind.  

Claim 3:
  If you don't have term life insurance you are setting yourself up for disaster. 
Get it now before your spouse kicks the bucket, leaving you in a financial hole with no way out!                                         

Complete Bull Crap.  Ever heard of self insuring?   If the primary bread winner croaks  the world will not necessarily come to and end because the family doesn't have term life insurance.  If you live within your means and save and invest prudently,  you can have enough on hand to weather most eventualities.  The older you are the less of an effect term insurance has, other than as another payment out of your wallet when you could be paying that money into a retirement account.

Example:   Say you owe a low five figures on your house,  you have high six figures in assets and you also have a guaranteed monthly income  at retirement due  to a life of service  in the public sector........and your spouse croaks. 

While something like this is emotionally traumatic,  you do not have to do anything financial immediately! 

You don't have to change courses, seek advice or put a plan in action when prior to the unfortunate croaking, everything was just fine.

Predators troll the obits looking for people who have experienced a loss and the older that person the better because odds are there are more assets for the pilfering.  These sharks will call widows of the recently deceased expressing their sympathies for the loss and offer to help in any way possible to ease the transition into widowhood through the use of annuities,  broker sold mutual funds,  gold coins and so on. These people make their living preying on the emotionally vulnerable.

If your retirement plan has been working fine and lasting a long time,  don't fix it with an insurance product with which considering your age, may be of little or no value at all.

Claim 4: Catastrophic Health Care can wipe you out!  Buy soon as you can because at an advanced age, it can cost you dearly!

Complete Bull Crap.  If you are working and have decent health insurance, it does not make sense to buy a catastrophic plan unless there are some major health concerns in the family.  If there are, catastrophic coverage probably will cost you dearly anyway.

Most of these catastrophic health care monthly payments adjust up every ten years or so, meaning that if you can get a lower rate now while you are younger, it will not stay low as you get older so why bother with double coverage while you are employed.   Maybe someone is getting kickbacks from catastrophic health care insurance companies for pushing product.

The best insurance is to stay healthy.

Closing Comments:

It is reassuring to know that this individual will not be making a contribution to the gene pool in this lifetime, unless it involves the use of a turkey baster.

Gold Finches

Lesser Goldfinches responding to the dinner bell in Minden Nevada