Tag Archive | "economic news"

Anchor Sinks Investments


Here’s how to have a path to everlasting wealth.

Dive deep for truth.  Our recent message entitled, Divided Issues, examined a problem we have, as humans. We have to live and act upon on information and beliefs that we can only trust as true, knowing that there is always something we do not know.

Why are the foundations of our beliefs being increasingly shaken?   What can we do to carry on so we are successful and fulfilled?

We have never had as much technology that provides as much information.  Does this help us zero in on truth?   Actually the technology probably can fog rather than clear our vision.  Technology makes the entry level of publishing easier.   That’s good if you want to write or publish, but means that anyone can add in their opinion.  This leaves us wondering and scratching our heads over what might be fact based on actuality and what might be alternative facts based on agendas.

One problem is we live in a global economy, but most news is local.

Our world is increasingly connected, but Americans at all educational levels know less about the world than their counterparts did 20 years ago.

Alisia Miller has a great presentation at Ted.com (1) that shows how mainstream media slants the news.

For example, one month when North Korea agreed to dismantle its nuclear facilities, there was massive flooding in Indonesia and important news from Paris on global warming.  The U.S. accounted for 79 percent of total news coverage in the USA.  This is an image from Miller’s Ted.com presentation showing the land mass of the world.

ted talk on media

The graph below from Miller shows the number of seconds of news devoted to each country, during this period, when so much urgent activity was taking place outside the USA.

ted talk on media

A big remaining percentage was about Iraq.  The combined coverage of Russia, China and India reached just one percent.

The death of a movie star eclipsed news about every country, except Iraq, and received 10 times the coverage of the important Paris report on global warming.

Hidden agendas have too much influence over the news.

One reason we do not hear more global news is due to finance.  Broadband news has seriously eroded revenues of broadcast media.  News networks have reduced the number of their foreign bureaus by half.  For example, the total number of news networks in all of Africa, India and South America are three, ABC mini-bureaus in Nairobi, New Delhi and Mumbai, each staffed by one person.

Covering TV stars is cheaper than staying abreast of global news.

The bigger problems are in our brain.  Even if all the news was true and we had full access to it, this is more than we can possibly absorb.  We are ruled by a human constraint called “Limited Channel Capacity”.   Limited Channel Capacity is the word used to describe the fact that our brain can only deal with a limited amount of information at once.  If we are bombarded with too much data, we become confused and overloaded and freeze up like a deer caught in a spotlight.

It doesn’t matter how rational we think we are.  The chemicals in our brain often force us to make irrational decisions.  This affects our decisions, whether in love, life or our investment portfolios.

One Problem is Anchoring

Anchoring is related to overconfidence.  We make decisions based on information available.  Later, if we  get news that materially affects any forecasts we initially made instead of conducting a new analysis, we just revise our old analysis.

Because we are anchored in the old thinking, our revised analysis won’t fully reflect the new information.

Regret Minimization

How we act in the future is often affected by the outcomes of our previous experiences.   For example, we may have sold a stock at a 20% gain, only to watch the stock continue to rise after your sale.  We think, “If only I had waited.”  On the other hand if one of our investments falls in value our thinking leads to unpleasant feelings of regret.

Regret minimization occurs when we avoid investing altogether or invest conservatively because we don’t want to feel that regret.

We need effective, but easy to use ways to focus the news we absorb and powerful tools to verify the accuracy of the data before we invest.  We need the ability to dive below the surface of the noise generated by media and reach the still waters that run deep with truth.

We can reach truth better when we use financial news and mathematical tests of value to validate conclusions we arrive at from economic news.

Take for example, recent economic news.   Economic news shows that there has been a strong economy in the USA.

Economic news reveals growth problems in China.  Economic news spotlights risks in Europe.  The UK is leaving the European Union. Germany may suffer from so many new Syrian immigrants, etc.

Financial news from the latest Keppler Asset Management Developed Market analysis (below) shows that six of the ten best value developed markets are in Europe.

keppler-analysis

If we invest in Keppler’s Top Value portfolio which includes both the UK and Germany, the mathematics are even more in our favor than if we invest in Europe.

The economic news may be distorted and even if not,  current news is always changed by future surprises.

Investing in top value improves our odds because we begin with the best deal.

Economic news is slanted by opinion, lack of context, hidden agendas and more.  Financial news has mathematical discipline. 1 + 1 = 2.  There cannot be shades of opinion, slants or hidden agendas in that.

Winston Churchill once said: “It is always wise to look ahead, but difficult to look further than you can see.”  We live and invest in the turbulent shallows of the here and now.  History is filled with opinion and points of view.  Current news is distorted.  The future is unknown.  This makes it important to dive below the short term ups and downs of life and seek a more accurate form of reality.  One way is by relentlessly seeking value in investing and everything we do.

Gary

(1) www.ted.com Alisa_Miller-News about the news

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.

keppler asset management chart

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.

Leverage

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).

silver chart

(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.

Save

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.

Triple Guarantee

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.

Subscribe to the Pi for $197.   You Save $158.95.

Gary

 

 

 

Why Financial News?


A great deal of economic news is opinion, conjuncture or based on statistics that are often falsified or misconstrued.   Plus the news we see is prejudiced by what commerce thinks we want to see.

Advertising revenue is the driving source of news.  Audience determines ad rates and ad rates determine profits so all the news is aimed at attracting readers, not necessarily informing them.

Plus a lot of economic news is unreliable, or so unusable that it will just waste our time.

Let’s look at an example of a very recent economic news about the price of gold and the US dollar.

gold chart

30 day gold chart from Kitco showing dollar price of gold from Feb 22 to March 1, 2017. (1)

A February 24, Wall Street Journal article said “Dollar Edges Higher With Trump Speech Looming” (2).

Then  the Wall Street Journal article of  February 25, 2017, says “Gold rises as dollar falls” (3) said:  “Gold prices rose to their highest level in 3½ months Friday, lifted by dovish expectations of Federal Reserve interest-rate increases and political uncertainty in the U.S. and abroad.”

The Kitco gold chart above shows that yes gold did rise and fall, but the information was basically useless.  Gold’s price (in dollars) was falling when the Journal suggested it was rising and on February 25th gold’s price was falling when the Journal said it was rising.

More importantly the rising and falling was nominal.  Only huge leveraged traders could have earned more than the cost of trading gold that week.  Overall, for the week, the price of gold had a blip and then ended almost exactly where it began.

To have read this economic news was a waste of time.  Even worse, to have acted on what was written would have been a waste of money.

We need to use mathematically based financial news to make investment decisions.

The excerpt from our Purposeful Investing Course (Pi) outlines how investors use the Pi strategy in up to seven layers of tactics based around Financial News.

Pi Tactic #1:  Determine purpose of investing and use math to reveal good value in stock markets around the world.

Pi Tactic #2:  Diversify 70% to 80% of portfolio equally in good value developed markets.

Pi Tactic #3:  Invest 20% to 30% equally in good value emerging markets.

Pi Tactic #4:  Use trending algorithms to buy, sell or hold these good value markets.

Pi Tactic  #5:  Add spice speculating with “ideal conditions”.

Pi Tactic  #6:  Add spice speculating with leverage.

Pi Tactic  #7:  Add spice speculating with forex potential.

Here is another excerpt from the course that shows how to use math to determine “ideal conditions” for the price of gold.  The mathematical ratio to work with for gold is its price in relation to inflation.  The goal is not to determine if it will go up or down in the short term.  Gold’s price will rise and fall, sometimes too much, sometimes not enough.  When investors have a value line to determine when the price is too low, then accumulating gold for the long term increases the odds of profit.  This excerpt shows how Pi determines the value of gold.

#1:  Gold price to inflation.  This is perhaps the most speculative of the ratios since a meaningful inflation rate is hard to define. Statistics can be misleading.  In the Silver Dip Report 2017 there is an analysis of inflation that shows the median house price has increased 49 times but the average American house has changed greatly since 1944.

Gaining a true perspective on gold’s value is also difficult because the price of gold was fixed for many years.  The gold price was fixed at $35 an ounce at the end of WWII.  The fixing did not take into account the huge inflation this conflict created.  This also impacts any accuracy in understanding what the real price of gold should have been at the end of the war.

These factors can distort the accuracy of the picture. How much is gold really worth now?  What is its real value?  This is truly THE golden question.

Here are a few theories that can help us understand the relationship between the price of gold and cost of living.

First, we use gold’s 1944 price and the costs of houses and cars and wages at the same time.  Since the mid 1940s US median income increased 29 times.  House prices rose 47 times. The cost of cars jumped 36 times.

Gold was up 35 times in the same period from $35 to $1,235 an ounce.

If these conclusions are accurate,  it means that gold was a reasonable hedge against inflation.  Had you stored a pile of the precious metals away in 1942 to buy a car, you could do it.  A house maybe not, but again the statistical house purchased today might be very different from the statistical house purchased in the mid 1940s.

The gold cost of living relationship is true for the cost of going to a movie, up 33 times.  Apartment rentals are up 34 times.

But other basics have inflated far less.  Gas is up 19 times, but of course bounces around a lot.  Postage:  16 times.  Bread:  21 times.  Sugar: 10 times. Hamburger about 13 times.  Coffee:  11 times.  Eggs: 13 times increase.  Milk: 16 times.

Gold failed for keeping up with education.  The biggest increase is for Harvard tuition, up 107 times.  Or does this mean that a Harvard education has become a really lousy value?  That’s a question for another time.

This first comparison suggests that gold is not necessarily badly undervalued.  If the conclusions of the inflation are correct, this first comparison suggests that anytime gold drops below $1,225, it is likely at a fair value, about where it should be priced in relationship to other costs of living.

Second Comparison

inflation

Another way of looking at inflation is to lump all the price increases together.  In this instance, according to the inflation calculator website that uses the graph above, prices overall have risen 13.7 times since the end of WWII.

This second comparison would suggest that gold, up 35 times, has risen far more than inflation and is not a good value at $1,225.  However, because the price of gold was fixed at $35 an ounce, the original price must be suspect.

Third Comparison

If we use the 1944 inflation rate and compare it to the the price of gold in 1971, we see a value conclusion similar to comparison #1.

Why 1971?  That’s the year President Nixon told the Fed to stop honoring the dollar’s value in gold.  That meant foreign central banks could no longer exchange their dollars for U.S. gold, essentially taking the dollar off the gold standard.

Unhinged from the dollar, gold quickly shot up to $120 per ounce in the open market.  This $120 price is a glimpse of what the correct price of gold may have been in the mid 1940s.

If this third theory is correct, the price of gold has risen from $120 to $1,225, up about ten times, less than the 13.7 times inflation from 1945.

On the other hand, gold’s price rise from 1971 is still much higher than inflation from 1971 until now.  Then the inflation calculator website’s chart below shows inflation since 1971 has pushed prices up 5.8 times.  This would suggest that gold around $696 an ounce would be a good value.

inflation

However, since the $35 an ounce gold fixing obscures the true price rise, if we split the price half way between the $35 and 1971 price ($120), we perhaps have a more accurate view.  The adjusted price is $77.   If $77 was a more accurate real value for gold in the mid 1940s, then its price has risen 15 times and is in line with the 13.7 times cost of living increase.

Fourth Comparison

The fourth comparison uses a chart from Macrotrends.com that shows the price of gold since 1905 without adjusting for inflation.

inflation

The same site has this chart showing the price of gold based adjusted to the Consumer Price Index from 2015 till now.

inflation

In this comparison, gold’s actual price is almost the same as its adjusted purchasing power price, around $1,235.

Conclusion

The comparisons above are indicators that the price of gold is likely to continue rising and falling along the cost of living increases from a current fair value of $1,225.  This is the premise we use at Pi.

We keep the $696 price in mind when we calculate potential drawdowns, in case the assumption of a $1,225 fair gold price turns out to be horribly wrong.

These comparisons crystallize the fact that there is risk when it comes to speculating in gold.   They remind us never to speculate more than we can afford to lose or at least hold for extended periods of times. They also remind us not to catch gold fever when we read claims of $2,000 or $5,000 an ounce gold!  Unless inflation turns into mega inflation.

We are living in a high tide of news.  News can flood our every waking minute if we let it.  When it comes to investing, if we cut out the economic news and rely on mathematically based financial news instead, we gain time and reduce the frantic nature of our modern world.  This can reduce investment trading costs, help ease the behavior gap most investors suffer.  Turning off the economic news makes life less stressful and more comfortable and profitable as well.

Gary

(1) Kitco gold charts

(2)  www.wsj.com/articles/dollar edges higher with Trump speech looming

(3) www.wsj.com: Gold rises as dollar falls

“If I Live Long Enough, I’ll Really Cash In Next Time”

Periods of good investing performance are always followed by periods that are bad.

Think about this…

The US dollar has risen over 50% above its lows of 2011.   The greenback is at its highest level versus the Chinese yuan since 2008.  India’s rupee is at an all-time low against the buck.  Other Asian currencies, the Singapore dollar and Malaysian ringgit have plunged to depths not seen since the financial crisis of 1997-98.  The euro, Mexican peso and Canadian dollar have crashed.  In other words, the US dollar is in a period of high performance.

What happens is the greenback is in a free fall.  Smart investors can cash in huge profits.

Yet there is a bigger economic problem that can ruin the purchasing power of your cash faster than you can imagine.

While the dollar was rising non US governments and businesses accumulated almost ten trillion dollars of debt denominated in US dollars.

The terror in this debt is that it acts as a destructive and very rapid financial amplifier.  Dollar debt is like a short position.  When the dollar rises, borrowers scramble to short-cover their position by selling their own currency.  This defeats the purpose of their hedging as it increases the strength of the dollar.  So they short even more.  Those short sales create an upward dollar spiral.  The buck rises higher and higher, based entirely on fear and speculation.

When that leverage energy is spent the currency stalls and plummets out of control… like now.

The last time we saw such a upwards spiral was from 1980 to 1985.  The dollar rose 50% in those five years.

Guess what?

Then it collapsed 50% in just two years.

The US dollar is in a similar position as at the beginning of Ronald Reagan’s first term in the 1970s.  This was a time of widening budget deficits, rising interest rates and a US dollar surge.  This created a problem then, as it does now, and creates huge opportunity for those in the know.

The rise of the dollar, the debt and the US stock market creates an especially dangerous conflict because Donald Trump wants to balance America’s trade.  A stronger dollar makes this impossible because it pushes up the cost of US material, US labor and US exports.

The overpriced dollar, the poor value of the US stock market (compared to other markets) create a dollar crisis and a special opportunity for you and me as investors.

“If I Live Long Enough, I’ll really cash in next time”.    I made this promise to myself in the 1980s.   A remarkable set of economic circumstances helped anyone who spotted them become remarkably rich.  Some of my readers made enough to retire.  Others picked up 50% currency gains.  I invested as much as I could handle then as the profits rolled in for about 17 years.  I had wished I could have invested more.

Now those circumstances are here again.

And I have…

invested more… a lot more… betting again the dollar.

The swollen stock market prices, huge dollar denominated debt and weakening dollar are three patterns that can create a fast 50% profit.

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 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.

There is a way to accumulate good value equities denominated in the following currencies of special strength, including the Euro, Canadian dollar, Singapore dollar, British pound, New Taiwan dollar and Chinese yuan.

The report reveals 21 special non dollar equities that have the greatest opportunity for safety and appreciation.

I kept the report short and simple, but include links to 153 pages of global stock market and asset allocation analysis so you can keep this as simple or as complex as you desire.

The report shows 22 good value investments and a really powerful tactic to use that allows you to inexpensively accumulate these bargains now even in very small amounts (even $5,000).  There is extra profit potential of at least 50% so the report is worth a lot.

Research shows that most people worry about having enough money if they live long enough.   I never thought of that.   I just wanted to live long enough to see the remarkable economic opportunity that started in 1980 come again so I could hit the jackpot.  This powerful profit wave has begun.  I have made the investment myself  suggest you investigate this in my report “Three Currency Patterns For 50% Profits or More.”

Order the report here $29.95

My Guarantee

Order now and I’ll email the online report “Three Currency Patterns For 50% Profits or More” in a .pdf  file right away. 

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 within 60 days and I’ll refund your subscription fee in full, no questions asked.

You can keep the report “Three Currency Patterns for 50% Profits or More”  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.

Order the report here $29.95

Or get this report free.  Subscribe to the Purposeful Investing Course (Pi) described below.

 

The Hidden Lie in Economic News


Here is why we have to beware of economic news.

US sotck chart

US stock chart comparison at www.finance.yahoo.com (1) Click n chart to enlarge.

A recent USA Today first page headline article was entitled “Seven year bull makes investors 16 T richer” says that as the bull market celebrates its seventh birthday the real accomplishment is putting $16 trillion into the pockets of investors” (2).

The article said: Just to put that into perspective, that’s nearly equal to the U.S. gross domestic product of $17 trillion.

How exciting!  These words and comparisons sound great.  However when examined a bit more closely, we can see that these thoughts are really misleading.  I do not think this is intentional, just the way the media works… selling what readers want to see.

First, the chart above shows that the S&P 500 and Dow have only risen about 54% in the last ten years.  NASDAQ is up about 106%.  With dividends, those numbers might be good, but not special in any way.  These figures still present a highly distorted picture.

Those modest ten year returns rely on one eight of the growth from just seven shares (out of thousands) that together generated $2 trillion of the last seven year’s growth.

These seven companies were Apple, (AAPL) up 7,751.7%,  Amazon.com, (AMZN) up 824.9%, Alphabet, (GOOGL) up 398.8%, Wells Fargo, (WFC) up  389.4%, General Electric, (GE) up 305.5%, Microsoft, (MSFT) up 248.8% and Berkshire Hathaway, (BRKA) 185.9%.

Remove these shares and the bull market of the last seven years looks pretty grim.

Also, if we deduct the low interest on cash and bonds premium that has pushed US shares to very over priced levels, this third peak in the 16 year sideways Bear Market (from 2000 to 2016) would be closer to the peaks of 2000 and 2007.

s&P chart

Publishers rely on economic news that sells more than they rely on news that informs what’s really important. Even accurate economic news often presents a misleading picture.  This is why financial news based on core business fundamentals such as price-to-book-value, price-to-earnings and dividend yield are better indicators to follow when seeking investments.

Mathematics might be boring, but mathematics are much more comparable and harder to misinterpret.  Numbers applied to value do not misinform.

Gary

(1)  finance.yahoo.com S&P Chart

(2)  usatoday.com 7 year bull makes investors 16 trillion richer

Investing Beyond the Boom

Warren Buffet once warned against the Cinderella effect.

He said “Don’t be fooled by that Cinderella feeling you get from great returns.  Nothing sedates rationality like large doses of effortless money.  After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball.  They know the party must end but nevertheless hate to miss a single minute of what is one helluva party.  Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”

Cinderella may have lost a shoe when she fled the party to meet a midnight curfew.  We can lose much more when we rush from a crashing stock market.

Most investors face emotional dangers that build in rising markets.

Almost everyone feels good.

But the clock of economic reckoning is ticking.

No wants to see it.  Nothing rises forever and especially… not everything at the same time.

Yet no one wants to leave the party until the end.

But many edge closer to the door.

When the clock chimes there could be a stampede even though leaving in a hurry may be the worst way to go.

Here are seven steps that can help avoid this risk.

  • Choose investments based on markets instead of shares.
  • Diversify based on value.
  • Rely on financial information rather than economic news.
  • Keep investing simple.
  • Keep investing costs low.
  • Trade as little as possible.
  • Make the decision process during panics automatic.

One strategy is to invest in country ETFs that easily provide diversified, risk-controlled investments in countries with stock markets of good value.  These ETFs provide an easy, simple and effective approach to zeroing in on value.  Little management and less guesswork is required.  The expense ratios for most ETFs are lower than those of the average mutual funds.  Plus a single country ETF provides diversification equal to investing in dozens, even hundreds of shares.

A minimum of knowledge, time, management or guesswork are required.

The importance of…

easy…

transparent…

and inexpensive. 

Keeping investing simple is one of the most valuable, but least looked at, ways to avoid disaster.  Simple and easy investing saves time.  How much is your time worth?  Simple investing costs less and avoids fast decisions during stressful times in complex situations where we are most likely to get it wrong.

Fear, regret and greed are an investor’s chief problem.  Human nature causes  investors to sell winners too soon, and hold losers too long.

Easy to use, low cost, mathematically based habits and routines help protect against negative emotions and impulse investing.

Take control of your investing.  Make decisions based on data and discipline, not gut feelings.  The Purposeful investing Course (Pi) teaches math based, low cost ways to diversify in good value markets and in ETFs  that cover these markets.  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 With Pi

Pi’s mission is to make it easy for anyone to have a strategy and tactics that continually maintain safety and turn market turmoil into extra profit.

One secret is to invest with a purpose beyond the immediate returns.  This helps create faith in a strategy that adds stickiness to the plan.

Another tactic is to invest with enough staying power so you’re never caught short.

Never have to sell depressed assets during periods of loss.

Lessons from Pi are based on the creation and management of Model Portfolios, called Pifolios.

The success of Pifolios is based on ignoring economic news (often created by someone with vested interests) and using financial math that reveals deeper economic truths.

One Pifolio covers all the good value developed markets.  Another covers the emerging good value markets.

The Pifolio analysis begins with a continual research of 46 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

This is a complete and continual study of almost all the developed major and emerging stock markets.

This mathematical 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.

Learn how to invest like a pro from the inside out.

At the beginning of 2019 my personal Pifolio is based on select ETFs in the Keppler Developed and Emerging markets.  My Pifolio is invested in Country ETFs that cover seven developed and three emerging markets:

Norway
Australia
Hong Kong
Germany
Japan
Singapore
United Kingdom
Taiwan
South Korea
China

Don’t give up profit to gain ease and safety!

Regardless of economic news, these markets represent good value and have been chosen based on four pillars of valuation.

  • Absolute Valuation
  • Relative Valuation
  • Current versus Historic Valuation
  • Current Relative versus Relative Historic Valuation

When you subscribe to Pi, you immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last two years.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

Included in the basic training is an additional 120 page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

You also receive two special reports.

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!

30 years ago, the US 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 in this special offer, you 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 2019” free.

With investors watching global stock markets bounce up and down, many missed two really important profit generating events over the last two years.  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, compared to a ratio of 230 only two years before.

In September 2015, I prepared a special report “Silver Dip 2015” about a silver speculation, leveraged with a British pound loan, that could increase the returns in a safe portfolio by as much as eight times.  The tactics described in that report generated 62.48% profit in just nine months.

I have updated this report and added how to use the Silver Dip Strategy with platinum.   The “Silver Dip 2019” report shares the latest in a series of long term lessons gained through 40 years of speculating and investing in precious metals.  I released the 2015 report, when the gold silver ratio slipped to 80.  The ratio has corrected and that profit has been taken and now a new precious metals dip has emerged.

I have prepared a new special report “Silver Dip 2019” about a leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.

You also 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 this special offer.

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.

seminars

Tens of thousands have paid up to $999 to attend.

This year I celebrated my 51st anniversary 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.

stock-Charts

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.

The chart above shows the war – stock market cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) 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.

Use time not timing.

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.

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%.

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.

The online seminar also reveals  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 this test.

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, but online the seminar is $297.

In this special offer, you can get this online seminar FREE when you subscribe to our Personal investing Course.

Save $468.90 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 2019” and our latest $297 online seminar for a total savings of $468.90.

ecuador-seminar

Triple Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report, access to all the updates of the past two years, the two reports and the 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, easy diversified 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 two 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 Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, the “Silver Dip 2018” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio updates throughout the year.

Subscribe to a Pi annual subscription for $197 and receive all the above.

Your subscription will be charged $299 a year from now, but you can cancel at any time.

Gary

 

 

 

 

 

How to Dive Deep in a Shallow World


Here’s how to have a path to everlasting wealth.   Dive deep for truth.

We have never had as much technology that provides as much information.  This can show us what is real and what is not.  However the same technology can  also  fog our vision.  Learn how to circumvent three obstacles that can block us seeing from seeing what is really going on.

Obstacle #1:  We live in a global economy, but most news is local.

Americans at all educational levels know less about the world than their counterparts did 20 years ago.   Over half of Americans reviewed in a study say they closely follow global news.  Our world is an increasingly connected world.  Technology gives us greater, faster knowledge.  The volume and pace of the news makes getting below the muddied waters of shallow information hard.

Alisia Miller has a great presentation at Ted.com (1) that shows how mainstream media slants the news.

ted talk on media

For example one month when North Korea agreed to dismantle its nuclear facilities, there was massive flooding in Indonesia and important news from Paris on global warming, the U.S. accounted for 79 percent of total news coverage.  This is an image from Miller’s Ted.com presentation showing the land mass of the world.

ted talk on media

This graph from Miller shows the number of seconds of news were devoted to each country, during this period, when so much urgent activity was taking place outside the USA.

ted talk on media

A big remaining percentage was about Iraq.  The combined coverage of Russia, China and India reached just one percent.

The death of a movie star eclipsed news about every country, except Iraq, and received 10 times the coverage of the important Paris report on global warming.   One of the biggest amounts of news time was devoted to news about Britney Spears.

Even worse, local TV provides a large segment of the news and only dedicates 12 percent of its coverage to international news.

Obstacle #2:  Hidden agendas have too much influence over the news.

One reason we do not hear more global news is due to finance.  Broadband news has seriously eroded revenues of broadcast media. News networks have reduced the number of their foreign bureaus by half.  For example, the total number of news networks in all of  Africa, India and South America,are three, ABC mini-bureaus in Nairobi, New Delhi and Mumbai, each staffed by one person.

Covering TV stars is cheaper than staying abreast of global news.

Broadband has not replaced this gap.  Pew and the Colombia Journalism School analyzed 14,000 front page Google News’ stories.  The coverage was almost as slanted as broadcast media’s.  Another study of news stories showed that most global news from U.S. media are recycled stories from AP and Reuters that don’t put things into a context so people can understand their connection to it.

These financial facts make media vulnerable to the agendas of big business and big money.  Take politics as an example.  A well known maxim says, “All politics is local”.   A political candidate can talk all he wants about his international agenda, but the guy who promises local jobs and a safe clean community is the one most likely to get elected.  This means that big political spenders not only influence Congress, but also slant the news with their huge political advertising payments.

For example, Sheldon Adelson and his wife, reported donating $93 million in the 2012 election.  This does not include contributions they were not required to disclose so  actual donations during 2012 were likely to have been more.  Financially hard pressed publishers will think twice about creating ire that would lose this type of revenue.

Super donors are taking even more control over the news.  Recently Adelson purchased The Review-Journal, the biggest newspaper in Nevada.  Many question whether he will interfere with the paper’s journalistic independence.  There are suggestions that Adelson paid the substantial premium in the purchase so he could neutralize a newspaper that has been a painful thorn in his side.  The senior editor has already departed.

Obstacle #3:  We live in a pretty good world.  Good stuff happens all the time in most places.  Positive events are so commonplace that good news does not sell.  The rarity of bad news and the addictive nature of adrenaline create a pattern that favors negative news.

There are three bigger problems.  First, even if all the news was true and we had full access to all of it, this is more than we can possibly absorb.  Second, if we could absorb it all, we couldn’t act.  We are ruled by a human constraint called “Limited Channel Capacity”.   Limited Channel Capacity is the word used to describe the fact that our brain can only deal with a limited amount of information at once.  If we are bombarded with too much data, we become confused and overloaded and freeze up like a deer caught in a spotlight.  Finally, even if we could  absorb and process all the current news, the Golden Rule of Investing #1 kicks in every day.; “There is always something we do not know”.

We need effective, but easy to use ways to focus the news we absorb and powerful tools to verify the data’s accuracy before we invest.  We need the ability to dive below the surface of the noise generated by media and reach the still waters that run deep with truth.

We can reach truth better when we use financial news and mathematical tests of value to validate conclusions we arrive at from economic news.

Take for example, recent economic news.   Economic news shows that there has been a strong economy in the USA.  Economic news reveals growth problems in China. Economic news spotlights risks in Europe.  The UK may leave the European Union. Germany may suffer from so many new Syrian immigrants.

We can draw conclusions and make investing decisions based on this economic news, but there will be surprises.

Financial news from the latest January 2016 Keppler Asset Management Developed Market analysis (below) shows that the Morgan Stanley Capital Index (MSCI) of European shares is a much better value than the US MSCI index.   If you buy into US shares, you pay 2.77 book value.  The Europe Index can be purchased at only 1.78 times value.  Europe offers a better deal on Price to Earnings, Dividend Yield, Return on Equity, etc.

If we invest in Keppler’s Top Value portfolio which includes both the UK and Germany, the mathematics are even more in our favor than if we invest in Europe.

Screen Shot 2016-01-23 at 5.35.50 PM

The economic news may be distorted and even if not,  current news is always changed by future surprises.

Investing in top value improves our odds because we begin with the best deal.

Economic news is slanted by opinion, lack of context, hidden agendas and more.   Financial news has mathematical discipline. 1 + 1 = 2.  There cannot be shades of opinion, slants or hidden agendas in that.

Winston Churchill once said: “It is always wise to look ahead, but difficult to look further than you can see.”  We live and invest in the turbulent shallows of the here and now.  History is filled with opinion and points of view.  Current news is distorted.  The future is unknown.  This makes it important to dive below the short term ups and downs of life and seek a more accurate form of reality.   One way is by relentlessly seeking value in investing and everything we do.

Gary

(1) www.ted.com Alisa_Miller-News about the news

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.

keppler asset management chart

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.

Leverage

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).

silver chart

(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.

Save

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.

Triple Guarantee

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.

Subscribe to the Pi for $197.   You Save $158.95.

Gary