Here, in the deep wilderness, day after day, I hiked many miles with no one just me, the moose, wolves, bald eagles and my thoughts.
Moose Lake lodge… one of Merri’s and my favorite wilderness destinations.
These northern reaches of Canada are places of deep silence that evoke a lot of thoughts. One morning while riding a horse many miles from the lodge my mind wandered and soon I realized I was more than lost in thought. I was lost in the woods! As the eve fell I knew I was in a grave situation.
I had made most of the stupid amateur mistakes any woodsman can make, wandering for hours off the trail leaving my horse, coat, compass and matches miles away. Every protection was left behind! Thinking about investing and the beauty of the woods instead of location suddenly found me bordered by deep woods and swamp, miles from anywhere or anyone and not knowing how to get back.
What should I do… stay put, plow ahead or try to retrace my tracks? The forest had nasty quirks. There were grizzlies and just that morning the valley had erupted in mournful cries from a pack of wolves. I had a gun but only three bullets. Would shots attract my hunting partner who was miles away? Would he hear? The wind had risen. The weather was turning cold. There was a chance my shots would not be heard. Should I shoot to attract attention or save the bullets for protection during a night alone in the woods?
I decided to use the bullets to attract attention…I shot all 3 of them. It worked! My guide appeared and I slept in a soft bed that night instead of tied high up in a pine tree listening for those wolves!
That era reminded me of a lesson which is to always be aware, wary and careful. This incident can be used to help answer a question so many readers sent after the recent article about North Korean hacking being WWIV.
Many readers simply wrote “WWIV?”
Fundamentals of Global Economics
New readers often miss several basic foundations of the mindset we use at this site. One foundation is the importance of conflict in the cyclical pattern that flows through the basic fundamentals of human nature. These cycles have resulted in a series of industrial revolutions that have been directing stock markets, global economics and the world’s political and social interaction for over 1000 years.
An excerpt from the update of my report “Running Risk – How to Profit in Risky Times” may help clarifiy what I mean by WWIV and its importance to each of us in life, business and investing.
The cyclic suggestion in that article entitled WWIV is that there are struggles that create new disruptive technology. Austrian economist Joseph Shumpeter wrote about this and it is a pretty accepted line of economics that disruption derived from war enhances productivity when it is moved from the military to the domestic realm.
To grasp this dilemma, let’s think about the history of modern society. Several hundred years ago Europe was dominated by a feudal political system. The economy was powered by agriculture based on manpower and domesticated livestock. The limiting velocity of man, of his thoughts, ideas and commerce was the speed of a horse. Fate, current and wind ruled marine travel.
Then in desperation over manpower shortages caused by a series of plagues, humanity took an economic evolutionary turn. We made a giant step forward with new ideas about mechanical power. These ideas gave rise to incredible inventions such as the steam engine and telegraph.
We have moved thru seven industrial eras. The first era was feudal dominated by the stirrup and the Holy Roman Empire.
Then came five eras best described by Joseph Schumpeter, on how innovation creates industrial revolutions altering the way we live, work, earn and keep money. He described five great economic eras that began in the late 1700s:
Era #1: 1785-1845-fueled by water power-60 years. Textiles and iron works were the backbone of growth industries.
Era #2: 1845-1900-fueled by steam-55 years. Railways and steel provided the main growth in this era.
Era #3: 1900-1950-fueled by the internal engine-50 years. Electricity and chemicals provided the major growth.
Era #4: 1950-1990-fueled by electronics-40 years. Petrochemicals and aviation were the innovations which became mainstream in this period.
Era #5: 1990-current-fueled by digital networks- 30 years+ ? Software and new media create the growth elements in this era.
We are now moving into a new era called the Imagination Era bringing with it changes that may help resolve the many negative issues our global society faces now.
Each era greatly empowered massive new numbers of individuals, an empowerment that led to entire new classes. The working middle-class was born. This empowerment allowed the working class to rise from feudal subservient positions to positions of economic and hence political influence.
Much of the world’s population became much richer, but these changes were accompanied by turmoil caused by periods when the old order had not let go and the new order had not taken hold. Many forces came into play and there were struggles for dominance to establish order.
Forms of this turmoil were WWI, the massive economic recession of the 1930s, WWII and the Cold War. Wars and recession are signals that the economic-social structural order is breaking down, but that a new order has not yet taken control.
Serious things go wrong. Such breakdowns lead to enormous conflicts that we call wars. Major wars accompany great social, political and industrial change and bring out the most competitive aspects of society. This speeds up change. The key is that the struggle is so intense and the stakes so high that all concepts of return on investment for research and development are thrown out the window.
How can we know what’s next?
Cycles in the Dow at Stockcharts.com (see link below).
These cycles are one part of a compass to global economics that can help each of us determine our unique path of living, earning and investing.
This chart shows the relationship between a falling market… faltering economy and intense military struggles that create disruptive technology leading to increased productivity in mankind.
The question we have been asking at our site for several years is… what will cause WWIV?
This is one of many factors. The Dow for example has decreased in importance as a global economic bellwether. The NASADAQ investments for example became increasingly important in the 1990 to 2000 dot.com climb.
The US has also lost much importance in the global economy. Synchronicity between US and other markets need extra understanding now.
However the charts below of the Dow Jones Industrial and Morgan Stanley MSCI World Index suggest there is still a very strong correlation.
Dow Jones Industrial Index 2005 – 2013.
Morgan Stanley Capital Index World Index 2005 – 2103.
Currency changes need to be accounted for.
This mobile scenario is then overlaid by the never ending search for value.
Most important the way every individual’s circumstances, wants, needs, desires and mission are the keys that fit a unique piece into this global puzzle.
To sum up the global fundamentals, two gigantic forces struggle one against the other. The positive forces include added efficiency from shifting into a computer driven industrial revolution, which is opening a global economy. Individuals are empowered to be more, be in more places, do more, make more and have more.
The negative force is the resistance, congestion, and pollution to and from this change. Evolution takes place unequally and creates distortions. As these distortions grow, the risks of a correction global rise. The growing tensions are revealed in commerce and the rapidly changing art of war.
Man has always run risk. Change brings risk. Today we face change taking place at a faster and faster pace. This means we run an increased risk. The fundamentals explained above help us see how to profit from running risk.
Gain Comfort, Time and a Value With PiIf you subscribe to our Purposeful investing Course today, you’ll get our Value Investing Seminar online FREE
The goal of our seminar is not to make money one time, but show how to repeatedly find special profit opportunities that enhance safety as they increase profit.
Learn an investing strategy that reduces stress with slow, worry free purposeful tactics that cash in on financial rather than economic news.
I am sending this report “How to Grab Sequential Value Profits” to subscribers of the Purposeful investing Course (Pi) this weekend and want to give you a chance to save $517.90 if you subscribe to Pi.
The annual fee for Pi is $299. I have reduced this to $197 in this special offer. You receive the updated for 2017 $29.95 report “Three Currency Patterns For 50% Profits or More”. You receive the $39.95 report “Silver Dip 2017”. You also receive the $49 report “How to Grab Sequential Value Profits” plus our $297 online seminar for total savings of $517.90.
Learn from the Value Investing Seminar, our premier course that we have been conducting for over 30 years. Tens of thousands of delegates have paid up to $999 to attend. Now you can join the seminar online FREE in a special offer described below.
This three day course is available in sessions that are 10 to 20 minutes long for easy, convenient learning. You can listen to each session any time and as often as you desire.
The sooner you hear what I have to say about current markets, the better you’ll be able to cash in on perhaps the best investing opportunity since 1982.
Tens of thousands have paid up to $999 to attend.
Improve Safety – Increase Profits
Start this weekend. Learn how to improve the safety and profit of your savings and investments by selecting diversified, good value investments in a multi-currency portfolio during stock market downturns. Few decisions are as important to our wealth as the value of the markets and currencies we invest in.
Many investors missing the great long term risk, the falling US dollar. The greenback has been strong for the past five years, but this is temporary. The dollar’s strength came after the great recession of 2009 just as there was a temporary dollar strength after the great recession of the 1980s. In the 1980’s that dollar strength lasted five years. Then the dollar collapsed over 50% versus major currencies. Now the greenback is in a similar place.
The strong US dollar and low interest rates created a bigger than normal stock breakout, but the US market has been in an overall bear trend since 2000. Now both, the market and the greenback are scheduled to fall.
This year I celebrate my 51st anniversary in the investing business and 49th year of writing about global investing. Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades. This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.
Stock and currency markets are cyclical. These cycles create extra profit for value investors who invest when everyone else has the markets wrong. One special seminar session looks at how to spot value from cycles. Stocks rise from the cycle of war, productivity and demographics. Cycles create recurring profits. Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.
The effect of war cycles on the US Stock Market since 1906.
Bull and bear cycles are based on cycles of human interaction, war, technology and productivity. Economic downturns can create war.
Here is the war stock cycle. Military struggles (like the Civil War, WWI, WWII and the Cold War: WWIII) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine, production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet. The military technology shifts to domestic use. A boom is created that leads to excess. Excess leads to correction. Correction creates an economic downturn and again to war.
Details in the online seminar include:
* How to easily buy global currencies, shares and bonds.
* Trading down and the benefits of investing in real estate in Small Town USA. We will share why this breakout value is special and why we have been recommending good value real estate in this area since 2009.
* What’s up with gold and silver? One session looks at my current position on gold and silver and asset protection. We review the state of the precious metal markets and potential problems ahead for US dollars. Learn how low interest rates eliminate opportunity costs of diversification in precious metals and foreign currencies.
* How to improve safety and increase profit with leverage and staying power. The seminar reveals Warren Buffett’s value investing strategy from research published at Yale University’s website. This research shows that the stocks Buffet chooses are safe (with low beta and low volatility), cheap (value stocks with low price-to-book ratios), and high quality (stocks of companies that are profitable, stable, growing, and with high payout ratios). His big, extra profits come from leverage and staying power. At times Buffet’s portfolio, as all value portfolios, has fallen, but he has been willing and able to wait long periods for the value to reveal itself and prices to recover.
This chart based on a 45 year portfolio study shows that holding a diversified good value portfolio (based on a good value strategy) for 13 month’s time, increases the probability of out performance to 70%. However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.
Time is your friend when you use a good value strategy. The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.
Learn how much leverage to use. Leverage is like medicine, the key is dose. The best ratio is normally 1.6 to 1. We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.
Learn to plan in a way so you never run out of money. The seminar also has a session on the importance of having and sticking to a plan. See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk. Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.
Enjoy investing more with slow, worry free, good value investing. Stress, worry and fear are three of an investor’s worst enemies. These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to under perform any market they choose. The behavior gap is created by natural human responses to fear. The losses created by this gap grow when investors trade short term, under stress.
Learn how to put meaning into your investing by creating profitable strategies that combine good value investments with unique, personal goals.
Learn what I am doing with my good value portfolio. My personal investment portfolio comes from a continual analysis of international stock markets and a comparison of their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.
We’ll update the good value markets for the beginning of 2017 next week, but the markets included in this 2016 portfolio are:
These markets have been chosen based on four pillars of valuation.
• Absolute Valuation
• Relative Valuation
• Current versus Historic Valuation
• Current Relative versus Relative Historic Valuation
The online seminar also reveals how to use Country ETFs to easily construct a diversified, risk-controlled, equally weighted representative country portfolios in all of these good value countries.
To achieve this goal my portfolio consists of Country Index ETFs that track an index of shares in a specific country. These country ETFs provide diversification into a basket of equities in the good value countries. The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.
This is an easy, simple and effective approach to zeroing in on value because little management and guesswork is required.
The seminar also discloses the results of a $80,000 share purchase cost test that found the least expensive way to invest in good value. The keys to this portfolio are good value, low cost, minimal fuss and bother. Plus a great savings of time. Trading is minimal, usually not more than one or two shares are bought or sold in a year. I wanted to find the very least expensive way to create and hold this portfolio so I performed a test.
The Test for Low Cost Trading
Research put every part of this portfolio in place, except knowing the best, easiest and least expensive way to buy. A search for an optimal way to buy and hold boiled down to two methods. One tactic to test was to use a unique online broker that appeared to offer the lowest cost deal. The other approach was to use a community bank in Smalltown USA. The small town bank that I use looks after my 401K trust account and the service is first class. The benefit of small banks is that they still treat us as a human beings (instead of a number) and when we need, it’s easy to go right to the top to answer a question or get a problem resolved. There are no call centers and the bank and the person looking after my account is just around the corner.
I created a test to see which offered the least expensive service.
Working with my banker in Smalltown USA, I created two accounts, one at the online broker and the other at the bank. I placed $40,000 in each.
I set up the order for the country ETFs online, while my trust manager set up orders for the identical amounts of the same shares in his system. Then we got on the phone, coordinated our timing and on a count of three each pushed the button “BUY”.
I share the results of this test in the seminar. The savings that can be gained on any purchase of country ETFs has the potential to be more than the cost of the seminar.
I have good news about the cost of the seminar as well. For almost three decades the seminar fee has been $799 for one or $999 for a couple. Tens of thousands paid this price.
In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.
The Purposeful investing Course (Pi) teaches exactly what to do in situations such as we are seeing in global stock markets now. This course is based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.
Enjoy Repeated Wealth
Pi’s mission is to make it easy for anyone to have a strategy and tactics that turn market turmoil into extra profit.
Pi reveals investing secrets and the sciences that make investing easy, safer, less time consuming and increases the chances of profit.
One secret is to invest with a purpose beyond the cash. Another tactic is to have staying power. This means not being caught short and having to sell during a period of loss. This also means having enough faith in a strategy that we stick to the plan. When we invest with purpose, doing what we love, and when we believe in the basic mathematics of value, we enjoy the process more and are more likely to hold on during down times, when most poor investors panic and sell.
Lessons from Pi are based on the creation and management of a Primary Pi Model Portfolio, called the Pifolio. There are no secrets about this portfolio except that it ignores the stories from economic news (often created by someone with vested interests) and is based mainly on good math that reveals the truth through financial news.
The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets using my (almost) 50 years of global experience and my study of the analysis of four mathematical investing geniuses (and friends).
The Pifolio analysis begins with a continual research of international major stock markets that compares their value based on:
#1: Current book to price
#2: Cash flow to price
#3: Earnings to price
#4: Average dividend yield
#5: Return on equity
#6: Cash flow return.
#7: Market history
We combine the research of several brilliant mathematicians and money managers with my years of investing experience.
This is a complete and continual study of what to do about the movement of international major and emerging stock markets. I want to share this study throughout 2017 with you.
This analysis forms the basis of a Good Value Stock Market Strategy. The analysis is rational, mathematical and does not worry about short term ups and downs. This strategy is easy for anyone to follow and use. Pi reveals the best value markets and provides contacts to managers and analysts and Country Index ETFs so almost anyone can create and follow their own strategy.
A country ETF provides diversification and cost efficiency by spreading one simple, even small investment into a basket of equities in a good value stock market. The costs are low and this type of ETF is one of the hardest for institutions to cheat. Expense ratios for most ETFs are lower than those of the average mutual fund.
Little knowledge, time, management or guesswork are required. The investment is simply a diversified portfolio of good value indices. Investments in an index are like investments in all the shares of a good value market.
Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.
For example in the 1980s, a remarkable set of two economic circumstances helped anyone who spotted them become remarkably rich. Some of my readers made enough to retire. Others picked up 50% currency gains. Then the cycle ended. Warren Buffett explained the importance of this ending in a 1999 Fortune magazine interview. He said: Let me summarize what I’ve been saying about the stock market: I think it’s very hard to come up with a persuasive case that equities will over the next 17 years perform anything like—anything like—they’ve performed in the past 17!
I did well then, but always thought, “I should have invested more!” Now those circumstances have come together and I am investing in them again.
The circumstances that created fortunes 30 years ago were an overvalued US market (compared to global markets) and an overvalued US dollar. The two conditions are in place again! There are currently ten good value (non US) developed markets, plus 10 good value emerging markets.
Pi shows how to easily create a diversified, worry free portfolio in some of these good value markets using Country Index ETFs.
The current strength of the US dollar is a second remarkable similarity to 30 years ago. The dollar rose along with Wall Street. Profits came quickly over three years. Then the dollar dropped like a stone, by 51% in just two years. A repeat of this pattern is growing and could create up to 50% extra profit if we start using strong dollars to accumulate good value stock market ETFs in other currencies.
This is the most exciting opportunity I have seen since we started sending our reports on international investing ideas more than three decades ago. The trends are so clear that I have created a short, but powerful report “Three Currency Patterns for 50% Profits or More.” This report shows how to earn an extra 50% from currency shifts with even small investments. I kept the report short and simple, but included links to 153 pages of Good Value Stock Market research and Asset Allocation Analysis.
The report shows 20 good value investments and a really powerful tactic that shows the most effective and least expensive way to accumulate these bargains in large or even very small amounts (less than $5,000). There is extra profit potential of at least 50% so the report is worth a lot.
This report sells for $29.95 but you’ll receive the report, “Three Currency Patterns For 50% Profits or More” FREE when you subscribe to Pi.
Plus get the $39.95 report “The Silver Dip 2017” free.
With investors watching global stock markets bounce up and down, many missed two really important profit generating events. The price of silver dipped below $14 an ounce as did shares of the iShares Silver ETF (SLV). The second event is that the silver gold ratio hit 80 and has remained near this level, compared to a range of the 230s only two years ago.
These two events are a strong sign to invest in precious metals.
I prepared a special report “Silver Dip 2017” about a new leveraged speculation that can increase the returns in a safe portfolio by as much as eight times. The purpose of the report is to share long term lessons about speculating in precious metals gained through 30 years of speculating and investing in gold and silver.
The low price of silver offers special value now so I want to send you this report because the “Silver Dip 2017” offers enormous profit potential in 2016.
Subscribers who acted on the report when it was originally issued picked up a fast 54.1% profit. The report updates what to do in 2017.
Save $517.90 If You Act Now
Subscribe to the first year of The Personal investing Course (Pi). The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking $102 off the subscription. Plus you receive FREE the $29.95 report “Three Currency Patterns For 50% Profits or More”, the $39.95 report “Silver Dip 2016”, the $49 report “How to Grab Sequential Value Profits” and our latest $297 online seminar for a total savings of $517.90.
Enroll in Pi. Get the first monthly issue of Pi and the three reports Value Investing Seminar right away.
#1: I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free purposeful investing.
If you are not totally happy, simply let me know.
#2: I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.
#3: You can keep the three reports and Value Investing Seminar as my thanks for trying.
You have nothing to lose except the fear. You gain the ultimate form of financial security as you reduce risk and increase profit potential.
Subscribe to a Pi annual subscription for $197 and receive all the above.
See great stock charts at stockcharts.com/freecharts/historical/djia1900.html