Image from WSJ.com article “Wells Fargo, Awash in Scandal, Faces Violations Over Car Insurance Refunds” (1)
How bad are the thieves who are supposed to look after our money? The big guys can cheat their customers again and again. The New York Times article above shows how this bank has ripped off its customers for a third time in just one year.
The article says: Wells Fargo, the scandal-plagued bank, is facing new regulatory scrutiny for not refunding insurance money owed to people who paid off their car loans early.
This is the third such incident revealed in just the last year, for just this bank.
How many shenanigans are not revealed in this industry?
Last year, Wells Fargo bank employees created millions of credit card and bank accounts that customers had not requested. They robbed customers of millions.
Last month, this same bank was found to have forced unneeded collision insurance on consumers who financed their car purchases. That practice hit 800,000 customers caused 274,000 people to be delinquent and 25,000 cars to be wrongly repossessed.
Now the Federal Reserve Bank of San Francisco is investigating a different insurance rip off related to a different type of insurance called guaranteed auto protection insurance, or GAP.
It is not mandatory for car buyers to carry GAP insurance, which typically costs $400 to $600. But car dealers push the insurance, and lenders like it because of the protection it provides. When borrowers pay off the loans early, Wells Fargo should have provided a refund of some of the GAP insurance premium.
Guess what… they did not.
We are on our own! We should not expect the authorities to protect us.
The Wall Street Journal article “When Brokers Want to Move Your Money Out of a Very Good Thing” (2) explains why.
The article says: So far this year, here’s what our friends in the federal government have done for — and to — citizens who hope to find simple ways to save enough money for retirement without anyone robbing them blind.
■ Continued a year’s long fight against a rule that requires many retirement advisers to act in their clients’ best interests.
■ Reversed a rule that would have made it easier for states to create retirement savings plans for people who don’t have one at work.
■ Abandoned a new federal program to help lower-income savers, young ones in particular.
The article tells how brokers allegedly persuaded about 200 people to move money out of a safe government plan and put the funds in expensive annuities, earning hefty commissions. The overall costs in the government plan are about as low as employer-based retirement savings plans get, about 38 cents for every $1,000 someone had invested.
Moving investors out of the plan earned four brokers about $1.7 million in commissions, at the investor’s expense. Once again Wall Street used investors hard earned savings to line a broker’s pocketbooks.
We publish The Purposeful investing Course (Pi) to help readers improve their investment trading discipline so they can increase profits, reduce risk, reduce trading costs and save time.
The core of the Pi strategy is to use math based financial news to invest in a portfolio of equities in the best value stock markets using country ETFs. These mathematically calculated valuations do not change quickly, and the portfolios researched by Pi have not traded once in the last two years.
This creates an enormous thrift.
One big question about how to manage these Pi portfolos called Pifolios is “What to do when markets have a severe correction?”
Here is an excerpt from a recent Pi Update that looks at two strategies for dealing with market downturns but keeping costs down.
The first strategy is hold on and continue to accumulate value. This works well if an investor has time for the portfolio to ride before cash is required. If one sticks to the strategy (and does not bail out at the bottom), this strategy requires the least time. Investors can focus on more important aspects in life.
Plus trading costs are kept at a minimum.
The second strategy is to use math to spot trends and use trailing stops (based on market momentum not entry price) to get out of a market before it severely declines.
This strategy offers the best long term profit, IF an investor can stick to the strategy AND ALSO uses the same math to get back into the market as it recovers.
As the US Stock Market leaps from all time high to all time high, it’s time to ask ourselves “When will the US stock market bull be over? What to do about it?”
At Pi we track market momentum in all the Pi ETFs at Tradestops.com.
On June 16, 2017 Dr. Richard Smith CEO of Tradestops wrote: “Is This 9-Year Bull Market Over?”
We are well into the ninth year of a bull market that has barely seen any 10% corrections, much less a 20% drop. But warning signs that this bullish market are coming to an end have begun to show up.
The three danger signals mentioned at that time were:
#1: The short-term trend of the Dow Jones Transportation Average (DJTA) was to the downside, yet the short-term trend of the DJIA was to the upside.
The Dow Theory states that (DJTA) must also be trading at new highs for the new highs of the Dow Jones Industrial Average (DJIA) to be confirmed, otherwise the trend of the DJIA is not sustainable.
Since 1999, each time this has occurred has been the precursor of a downward move in the DJIA.
#2: The divergence in the DJIA and the Nasdaq Composite Index (COMP). The DJIA was trading at new highs, yet the COMP was trading more than 2% off its most recent highs.
Since 1971, there have been 12 times that the DJIA has been at new highs with the COMP at least 2% off its highs. In 9 of the previous 11 occurrences, the DJIA has moved lower.
#3: Commercial traders in the DJIA had a historically-large net negative position. When their positions have been negative in the past, it has led to downturns in the DJIA.
Last week Dr. Smith warned again in an editorial titled “Is the Bear About to Pounce?” and pointed out that the divergence of the Dow Jones Transportation Average (DJTA) from the Dow Jones Industrial Average (DJIA) has grown.
The short-term trend of the DJTA is to the downside, yet the short-term trend of the DJIA is to the upside.
The benefit that Tradestops offers investors is a Stock State Indicator of specific shares that suggests price levels for rising trailing stops as the markets rise.
Dr. Smith also wrote in last week’s editorial: “No matter what happens with the markets, however, I’m not worried. I’ve got my stops in place. I know what I’ve got at risk and I’m comfortable with it. Could something go terribly wrong? You bet. That’s what my stops are for. They’re like having your seat belt on in the car.
“On the other hand, could something go terribly right? Absolutely! The entire summer has seen the stock market climb a wall of worry to new all-time highs. Just today we saw stronger than expected job creation. Upside surprises are always a possibility.
“My stops protect me on the way down, but they’ve also been moving higher and capturing greater profits on the way up. We should never forget that trailing stops are just as important for “unlimiting your upside” as they are for limiting your downside.”
Warnings of a Wall Street crash lead us to other important questions.
Will other stock markets fall in tandem with the US?
Will other stock markets rise as investors pull out of the US and invest in other markets.
Whatever the answer, the best place to be is still in good value markets. The best strategy is still to use math based financial news to reveal good value and to invest equally in good value markets.
Trailing stops is an additional way to protect again a global secular stock market slide.
Pi uses math to reveal the best value markets. Pi also uses math at Tradestops.com to see the momentum of these good value markets.
For example, we can see that all the ETFs in the Pifolio have green SSIs (Stock State Indicators).
The Stock State Indicators at Tradestops.com act as a full life-cycle indicating the health of your stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.
What this signal indicates is the current health of the stock (performing well, or in a period of correction, or stopped out).
The SSI will tell you one of five things:
Momentum based on the latest 521 days of trading is a key component of the Stock State Indicator (SSI) system. A stock changes from red to green in the SSI system only after it has already gone up a healthy amount and has started a solid uptrend.
How SSI Alerts Are Triggered
If the position has already moved more than its Volatility Quotient below a recent high, the SSI Stop Loss will trigger. This is an indicator that the position has corrected more than what is normal for this stock. It means to take caution.
Below are the Major and Emerging market Pifolios that we track at Tradestops.com.
Click on images to enlarge Equal Weight Good Value Developed Market Pifolio.
All the ETFs in the Developed Market Pifolio currently have a green SSI. This is also the case for the Good Value Emerging Market Pifolio below.
Good Value Emerging Market Pifolio.
We do not know when the US market will fall. We only do know that it will. We also do not know if, when the US market corrects, global markets will follow or rise instead.
The fact that the Pifolios are invested in good value markets reduces long term risk.
Additional protection can be added by using trailing stops based on the momentum of each stock in the Pifolio.
Take for example, the iShares MSCI United Kingdom ETF. This ETF has a green SSI at this time.
iShares MSCI United Kingdom ETF (Symbol EWU)
Pi purchased the share at $31.26 and it is currently at $34.43 and rising. Tradestop’s algorithms suggest that if the price drops to $31.69, its momentum will have stopped and it is trading sideways. The stop loss price is currently $29.86. If EWU continues to rise, both the yellow warning, and the stop loss price will rise as well.
There are numerous signs that the nine year US stock market bull will end. No one knows for sure when or how severe the correction will be.
When the bear arrives, what will happen to global and especially good value markets? We do not know the answer to this question either.
What we do know is that the equally weighted, good value market Pifolios have the greatest potential long term and that math based trailing stops can be used to protect against a secular global stock market correction when it comes.
You can learn how to use Tradestops.com to improve investing discipline.
Gary
(1) www.nytimes.com: Wells Fargo, awash in scandal, faces violations over car insurance refunds
(2) www.nytimes.com: When brokers want to move your money out of a very good thing
The Only 3 Reasons to Invest

The stock market has always been the best place of places to protect and increase wealth over the long haul. Yet it’s also been the worst place to lose money, a lot of it, quickly.
There are only three reasons why we should invest. We invest for income. We invest to resell our investments for more than we had invested. We invest to make our world a better place.
The goal of investing should be to stabilize our security, bring feelings of comfort and elimination of stress!
We should not invest for fun, excitement or to get rich quickly. We should not divest in a panic due to market corrections.
This is why my core stock portfolio consists of 19 shares and this position has hardly changed in three years. During this time we have been steadily accumulating the same 19 shares and have traded only three times.
A model portfolio that dates back to 1969 has dramatically outperformed almost every stock market in the world.
A hundred US dollars invested in that portfolio in 1969 is now worth $44833 compared to $100 invested in an equity weighted world index being worth $11,548.
This portfolio is built around a strategy that’s taught in my Purposeful Investing Course (Pi). I call these shares my Pifolio.
This portfolio more or less matched the S&P 500 until May 2018. Then a stronger US dollar made the portfolio look like it was falling behind. This currency illusion creates a special opportunity we’ll view in a moment.
This portfolio above is based on stock price to value analysis built around 91 years of stock market data.
The value analysis is used to create a portfolio of MSCI Country Benchmark Index ETFs that cover stock markets that are undervalued. I have combined my 50 years of investing experience with the study of the mathematical market value analysis of Michael Keppler, CEO of Keppler Asset Management.
In my opinion, Keppler is one of the best market statisticians in the world. Numerous very large fund managers use his analysis to manage over $2.5 billion of funds. However because Keppler’s roots are in Germany (though he lives and operates from New York) and most of his funds registered for the European Union, Americans cannot normally access his data.
I was lucky to have crossed paths with Michael about 25 years ago, so I am one of the few Americans who receive this data and you will not find his information readily available in the US.
In a moment you’ll see how to remedy this fact.
The Pifolio analysis begins with Keppler’s research that continually monitors 46 stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return. Then Keppler takes market’s history into account.
Michael Kepler CEO Keppler Asset Management.
Michael’s analysis is rational, mathematical and does not cause worry about short term ups and downs. Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each good value (BUY) market.
This is an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required. You are investing in a diversified portfolio of good value indices.
A BUY rating for an index does NOT imply that any one stock in that country is an attractive investment. This eliminates the need for hours of research aimed at picking specific shares. It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries. Investing in the index is like investing in all the shares in the index. You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.
To achieve this goal of diversification the Pifolio consists of Country Index ETFs.
Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country. ETFs do not try to beat the index they represent. The management is passive and tries to emulate the performance of the index.
A country ETF provides diversification into a basket of equities in the country covered. The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.
Here is the Pifolio I personally held at the beginning of 2020. There have been no changes since.
70% is diversified into Keppler’s good value (BUY rated) developed markets: China, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.
30% of the Pifolio is invested in Keppler’s good value (BUY rated) emerging markets: Brazil, Chile, Colombia, South Korea, Malaysia and Taiwan.
iShares Country ETFs make it easy to invest in each of the MSCI indicies of the good value BUY markets.
For example, the iShares MSCI Germany (symbol EWG) is a Country Index ETF that tracks the investment results of the MSCI Germany Index. The fund is at all times invested at least 80% of its assets in the securities of its underlying index that primarily consists of all the large-and mid-capitalization companies traded on the Frankfurt Stock Exchange.
iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.
There is an iShares country ETF for every market in our Pifolio.
This year I celebrated my 52nd 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.
How you can create your own good value strategy.
I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use. I call this strategy Purposeful Investing (PI). 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 get this course when you enroll in our Purposeful Investing program (Pi) with a triple guarantee.
Triple Guarantee
Enroll in Pi. Get the 130 page basic training, a 46 stock market value report, access to all the updates I have sent in the past three years, two more reports on investing (described below) and an online 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.
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.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.
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.
Save $102 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.
Triple Guarantee
Enroll in Pi. Get the basic training, the 46 market value report, access to all the updates of the past two years, 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 reports 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, 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 $99 a year from now, but you can cancel at any time.
Gary