Posted on 01 September 2014.
Welcome to September and the Labor Day weekend.
This is a big holiday weekend in the USA.
Guest barn and delegate parking at our Writer’s Camp.
A reader sent this note last week: I have to tell you, your and Merri’s writings are so inspirational. Just by reading it I get so many ideas! I am just not used to it!
I am working on my personal healing for a long time now. No real sickness I had, but just a very unhealthy lifestyle. Maybe some karma and just plain ignorance…I had to work through this. But in the meanwhile I did dream..and visualize…to arrive some day at my perfect life.
It gives me hope that you address your writings to people who are about to retire, because if you can save them. I have a big chance since I am only 40.
This piece that I am reading now helps a lot: Report on “How to Use Super Thinking to Gain Everlasting Health & Wealth“
I replied: Thanks for your kind words. Just remember perfection is a process not a place. My favorite poet, Khalil Gibran, made this comment on perfection.
“Advance, and never halt, for advancing is perfection. Advance and do not fear the thorns in the path, for they draw only corrupt blood.”
This message shares more of Gibran’s wisdom in a moment.
Our Labor Day starts at the empty deep woods seminar hall on Little Horse Creek.
We get everything ready.
Delegates arrive and we all get to work.
Let’s look at why on Labor Day so many of us are working and learning in our striving for a perfect lifestyle.
Why in the world would someone be happy to do extra work on a holiday?
Because they love the labor they do. This is why today Merri and I are conducting a Super Thinking + Writer’s Camp. We are deliriously happy that we have a full house so we have extra labor to do on Labor Day.
This is why the theme in our investing, business and writing camps is to have a global view and to turn your passion into profit.
Labor Day is a big day. Perhaps it should be a greater celebration than it is.
Labor Day can give us one of the most important investing and business clues of all.
Labor is defined in the dictionary as “1. a. Physical or mental exertion, especially when difficult or exhausting; work.
How wrong can one be! Labor is giving…a part of the human existence that we need more than we can imagine. The universe is a process of receiving and giving.
We give with our labor… be it physical, mental or emotional and it is part of our condition to give.
I saw the truth of this in action over a decade ago in Ecuador, when the Ecuadorian economy stopped. The country ran out of gas. All the banks were closed and accounts frozen.
Yet everyone… (almost all)… came to work…even though there was no money, no transportation to work and they knew they would not get paid.
Hotel workers showed up for work… even though there was no salary paid.
Workers like these fisherman who park their boat kept right on working even though their money and ability to be paid were gone.
The sight was unbelievable. The Pan American Highway (there was no gas/fuel so no buses, no cars, no trucks, no traffic) was filled with hundreds and hundreds of people walking to work.
This is when the realization hit me. People want to work. We humans need to give. This is half of our natural existence… to give along with the need to take. This is the universal principle give…take…give…take.
Give and take, are each parts of the whole. They go together and when either is lost or missing, a great imbalance begins. Labor is the lack of slavery and dependence.
It’s as bad to just receive without giving as it is to work without receiving.
This is how it is with investing and business…a give and take wholeness.
During the 40 years I have been writing and speaking about global business and investing, I have watched some investors make fortunes while many people lost.
The difference was that the losers just keep asking, “What’s in this for me?”
The winners though asked “What will this labor provide and how much will it receive for the giving?” instead.
The winners had the profit motive for sure…but through giving. Their successful outlook was full and complete.
The typical losing mentality just looks at the receiving without seeing the whole. The losers forget to ask, “What does this give?”
Next time you look at an investing or business idea, think about the problem it solves first. What labor does the business or capital provide? Then (and only then) ask about the profit.
Good investment and business opportunities contain both seeds…for giving to the market and for receiving from the giving.
Finally, if you focus on opportunities in areas you love, you get a bonus. You become involved in whole ideas that are good for others, profitable and satisfying to you AND fun! Then work is not labor but love.
I have a plaque above my desk that I read every day… “Action is thy Duty. Reward Not thy Concern”.
Every Labor Day I like to share a poem by the great poet, Khalil Gibran. He stated this thought about labor better than I in his poem (one of my favorites) The Prophet. Here is that part of the poem with our best wishes for a fulfilling Labor Day.
Read the FREE report “How to Use Super Thinking to Gain Everlasting Health & Wealth“
The Prophet by Khalil Gibran
You work that you may keep pace with the earth and the soul of the earth.
For to be idle is to become a stranger unto the seasons, and to step out of life’s procession, that marches in majesty and proud submission towards the infinite.
When you work you are a flute through whose heart the whispering of the hours turns to music.
Which of you would be a reed, dumb and silent, when all else sings together in unison?
Always you have been told that work is a curse and labour a misfortune.
But I say to you that when you work, you fulfill a part of earth’s furthest dream, assigned to you when that dream was born,
And in keeping yourself with labour you are in truth loving life,
And to love life through labour is to be intimate with life’s inmost secret.
But if you in your pain call birth an affliction and the support of the flesh a curse written upon your brow, then I answer that naught but the sweat of your brow shall wash away that which is written.
You have been told also life is darkness, and in your weariness you echo what was said by the weary.
And I say that life is indeed darkness save when there is urge,
And all urge is blind save when there is knowledge,
And all knowledge is vain save when there is work,
And all work is empty save when there is love;
And when you work with love, you bind yourself to yourself, and to one another, and to God.
And what is it to work with love?
It is to weave the cloth with threads drawn from your heart, even as if your beloved were to wear that cloth.
It is to build a house with affection, even as if your beloved were to dwell in that house.
It is to sow seeds with tenderness and reap the harvest with joy, even as if your beloved were to eat the fruit.
It is to charge all things you fashion with a breath of your own spirit,
And to know that all the blessed dead are standing about you and watching.
Often have I heard you say, as if speaking in sleep, “He who works in marble, and finds the shape of his own soul in the stone, is a nobler than he who ploughs the soil.
“And he who seizes the rainbow to lay it on a cloth in the likeness of man, is more than he who makes the sandals for our feet.”
But I say, not in sleep but in the over-wakefulness of noontide, that the wind speaks not more sweetly to the giant oaks than to the least of all the blades of grass;
And he alone is great who turns the voice of the wind into a song made sweeter by his own loving.
Work is love made visible.
And if you cannot work with love but only with distaste, it is better that you should leave your work and sit at the gate of the temple and take alms of those who work with joy.
For if you bake bread with indifference, you bake a bitter bread that feeds but half man’s hunger.
And if you grudge the crushing of the grapes, your grudge distills a poison in the wine.
And if you sing though as angels, and love not the singing, you muffle man’s ears to the voices of the day and the voices of the night.
The greatest asset of all is the ability to labor at what you love wherever you live. This brings everlasting wealth.
Merri and I wish you wonderful labor wherever you are.
Gain From the Volatility of the Next Four Years
However America’s politics turn out, one thing is sure. There will be volatility in stock markets during the next four years.
The first reason markets will bounce has nothing to do with politics or policies. The market’s downward shift is simply due regardless of the party or the person in office.
Second the new politics will create an uncertain era. Everyone is shaken whether they are pleased with the election or not and nothing frightens markets like uncertainty.
Third we’ll see rising interest rates over the next 48 months. This will push markets down.
Despite these pitfalls, there is a way to profit using the downtrends to pick up good value shares.
During nearly five decades of global investing I have noticed found that good value strategies increase through bull markets and bear, through good presidents and bad. The steps to take are simple.
The first tactic is to seek safety before profit.
We can look at Warren Buffett’s investing strategy as an example. Buffett success is talked about a lot, but rarely does anyone explain how he make so much money. That was the fact until some researchers really stripped his operation bare. They looked at everything and learned the deepest of Buffett’s wealth management secrets. Fortunately they published all in a research paper at Yale University’s website. that reveals important truths about extending wealth.
This research shows that the stocks Buffett 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).
The second tactic is to maintain staying power. At times Buffet’s portfolio 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 outperformance 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.
The Buffett strategy integrates time and value for safety and profit.
A third tactic is using limited leveraging, tactic in the strategy boosts profit. Buffett leverages his portfolio at a ratio of approximately 1.6 to 1. The Yale published research paper shows the leveraging methods used by Warren Buffett to amass his $50 billion fortune. The researchers found that the returns from Buffett’s investment company, Berkshire Hathaway, far outweighed those achieved by any rival that has operated for 30 years or more. The research shows that neither luck nor magic are involved. Instead, the paper shows that Buffet’s success hinges on using leverage at the rate of 1.6.
To sum up the strategy, Buffet uses limited leverage to invest in large purchases of “cheap, safe, quality stocks”. He limits leverage so he can hold on for very long periods of time, surviving rough periods where others might have been forced into a fire sale or a career shift.
Stated in another way buffet uses logic (buy good value) to have the conviction, wherewithal, and skill to invest with leverage over many decades.
What do we do when we are not Warren Buffett?
May I introduce the Purposeful Investing Course (Pi) for those who want to invest like Warren Buffet, but know they are not. This course is based on my 50 (almost) years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.
Enjoy Extending Wealth
Pi’s mission is to make it easy for anyone to create a three point strategy, like Buffett’s even though they do not have a lot of time for or knowledge about investing.
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. One tactic as mentioned is 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, we enjoy the process more and are more likely to hold on during down times, when most poor investors panic and sell.
Slow, Worry Free, Good Value Investing
Stress, worry and fear are three of an investor’s worst enemies. They create the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market sector they choose. The behavior gap is created by natural human responses to fear. Pi helps create profitable strategies that avoid losses from this gap.
Spanning the Behavior Gap
Behavior gaps are among the biggest reasons why so many investors fail. Human evolution makes fear the second most powerful motivator. (Greed is the third.) Fear creates investment losses due to behavior gaps. Fear motivates us more strongly than desire. By nature investors are risk adverse.
Winning investors though embrace risk because they have a plan based on good value.
Purpose is the most powerful motivator, stronger than fear and greed, so a strategy with purpose is the most powerful of all.
Combine your needs and capabilities with good value secrets and the math to back up your value selections through the Pifolio – The Pi Model Portfolio
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 (often created by someone with vested interests) and is based entirely on good math.
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 follow this research of a brilliant mathematician and have tracked this analysis for over 20 years. This is a complete and continual study of international major and emerging stock markets.
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 matches this mathematical certainty with my fifty years of experience. This 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. There is so much more to write and 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.
Pi also explains when leverage provides extra potential without undo risk. For example in 1986 I issued a report called “The Silver Dip” that showed how to borrow 12,000 British pounds (at almost 1.6 to 1 dollars per pound the loan created US$18,600) and use the loan to buy 3835 ounces of silver at around US$4.85 an ounce.
Silver had crashed, I mean really crashed from $48 per ounce. As prices decreased from early 1983 into 1986, total supply had fallen to 449.7 million ounces in 1986. Mine production was restricted by the low prices at this time, with silver reaching a low for this period of $4.85 in May 1986. Secondary recovery also was constricted by these low prices.
Then silver’s price skyrocketed to over $11 an ounce within a year. The $18,600 loan was now worth $42,185.
The loan was in pounds and in May 1986 the dollar pound rate was 1.55 dollars per pound. So the 12,000 pound loan purchased $18,600 of silver. The pound then crashed to 1.40 dollars per silver. The loan could be paid off for $13,285 immediately creating an extra $5,314 profit. The profit grew to $47,499 in just a year.
Conditions for the silver dip have returned. The availability of low cost loans and silver are at an all time low. The price of silver has crashed from nearly $50 an ounce to below $14 as did shares of the iShares Silver ETF (SLV).
(Click on chart from Google.com (1) to enlarge.) Imagine investing in a spike like this… with leverage!
At the same time the silver gold ratio hit 80, a strong sign to invest in precious metals.
I have updated a special report “Silver Dip 2016” about a leveraged silver 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 gained through 30 years of speculating and investing in precious metals. While working on the report, when the gold silver ratio slipped to 80 and the price of silver dropped below $14 an ounce, I knew I needed to share this immediately.
I released a new report “Silver Dip 2015” so readers were able to take advantage of these conditions and leverage 1.6 times as a speculation. That report generated profits as high as 212% and a revised 2017 issue has been produced.
“The Silver Dip 2106” sells for $39.95 but you receive “Silver Dip 2017” FREE when you subscribe to Pi.
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 the $29.95 report “Three Currency Patterns For 50% Profits or More” and the $39.95 report “The Silver Dip 2017 free.
Enroll in Pi. Get the first monthly issue of Pi, and the report “Three Currency Patterns For 50% Profits or More” and “The Silver Dip 2016” 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: I guarantee you can keep “Three Currency Patterns For 50% Profits or More” and “The Silver Dip 2106” report as my thanks for trying.
You have nothing to lose except the fear. You have the ultimate form of financial security to gain.
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