Tag Archive | "Value investing"

The Power of Poverty


The world has to put “Everyone First”.

Modern communications makes inequalities of wealth and income too obvious.  Technology makes weapons of mass destruction too inexpensive and easy.

The conflicts of politics and religion are at their roots struggles of poverty.

People in poverty can see and can be armed and have nothing to lose.

We should watch the global economic slowdown and how it affects China.  If the population demands too much increased prosperity and becomes to restless… the Chinese governments easiest option is to blame  the West and increase military tensions.

Incidents like this navel misstep reported in the Japan Times (1) and publications around the world may increase in seriousness and frequency.

japan times

The article says: Experts said a near-miss between a U.S. Navy destroyer and a Chinese warship in the disputed South China Sea earlier this week could have dire implications for American allies and partners operating in the waterway and elsewhere — including Japan — after the U.S. confirmed that photos showing just how close the two vessels came to colliding were “legitimate.”

Economic tensions have always been a part of history but here’s a solid fact that is rarely reported in the doom and gloom news…  there is greater prosperity ahead, for the entire world.

The simple laws of supply and demand guarantee that a strong global economy will continue to add more and more wealth.

Technology is making people more productive.  Increased productivity increases supply.

There is a growing global population. Growing population increases demand.

Those are the basics.  We can’t really argue with that.

A recent Wall Street Journal article “World Poverty Falls Below 750 Million, Report Says” (2) supports this fact… More supply… more demand… more wealth.

The article says that population living in extreme conditions has declined by more than 1 billion people in last 25 years.  That’s great progress!

wsj.com

Here is an excerpt from the article: The global population living in extreme poverty has fallen below 750 million for the first time since the World Bank began collecting global statistics in 1990, a decline of more than 1 billion people in the past 25 years.

In a report released Wednesday, the World Bank said the extreme poverty rate had dropped to 10% as of 2015, the latest comprehensive data, and they estimate that the decline has continued over the past three years.

Expect that the World Will Remain Standing!

The press always focuses on doom and gloom.  Current news always makes the world seem about to end.

Yet despite all the negative headlines, we have lived through the Cold War and MAD, Y2K, GridX II, the Peak Oil Crisis. etc. etc. etc.  Chicken Little is always out there, selling the sky is falling.  Don’t buy into this story!

History suggests that there will always be opportunity.  The sun always shines somewhere.

We can cash in on this fact by simply looking for top value markets and investing for the long term.

Gary

Profitable Investing Made EZ

There are only three steps to sustained, safe profits in investing.   Seek value.  Cut losses.  Take profits.

Quotes from three great value professional investors support this thought.

Be fearful when others are greedy, and greedy when others are fearful.” Warren Buffett

“In the short run, the market is a voting machine, but in the long run it is a weighing machine.” Ben Graham

We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” Charlie Munger

We do not have to be brilliant to preserve our wealth.  When it comes to investing, discipline can make professional investing EZ because you become smarter than the smartest man in the world.

newton

Sir Issac Newton

Sir Isaac Newton is widely regarded as one of the most influential scientists of all time.  His role was key in the scientific revolution.

His book “Mathematical Principles of Natural Philosophy” laid the foundations for mechanics.

He supplied a foundation to optics.

He helped develop modern calculus.

Newton formulated the laws of motion and gravitation and confirmed the heliocentric model of the cosmos.

Newton built the first practical reflecting telescope.

His theories about color and cooling and the speed of sound were spring boards in physics.

In math, Newton contributed to the study of power series, the binomial theorem to non-integer exponents, and a method for approximating the roots of a function.

He is said to have been the greatest genius who ever lived!

But Sir Issac Newton also lost his shirt in the stock market. 

Newton said: “I can calculate the motions of the heavenly bodies but not the madness of the people.”

Sir Issac forgot the intelligence in seeking value. He ignored the fact that buying and selling discipline is more important than being smart.

How can we gain this discipline?  Discipline comes from simple math which is why two of the three exports I use in my Purposeful investing course (Pi) and mathematicians not economists.  I am happy to introduce an investing math program that instills investment discipline in our Pi course.

Use math and time, not emotion and timing to protect your wealth.

We need a strategy so our savings, investments & income are sufficient for a full lifetime which can be much longer than statistics suggest.  That’s really good to know but longer life expectancy is expected to worsen the shortfall in Social Security by 11 percent over the next 75 years.

What will a longer, active life do to our savings and budgets?

During nearly five decades of global investing I have noticed that some people, such as Warren Buffett, have a good value strategy that makes sure they do not lose, but increase their wealth again and again.

What is this strategy?  It is a good value strategy based on three tactics.

The first tactic is to seek safety before profit.

A research paper that studied Warren Buffet’s investing strategy was published at Yale University’s website. This research shows that the stocks he 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 so you can let time do its work.  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 Buffet strategy integrates time and value for safety and profit.

A third, 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 value, time and leverage to buy and hold “cheap, safe, quality stocks”.  He uses 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.

You can learn how to use this type of three point strategy with the Purposeful investing Course (Pi).  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.

Pi reveals investing secrets and the sciences that make investing easy, safer, less time consuming and increases the chances of profit.

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 is based entirely on good math and uses to time to take advantage of value.

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): Michael Keppler, Eric Roseman, Thomas Fischer (for currency positions) and Richard Smith, PhD (for trailing stop alerts).

The Pifolio analysis begins with Keppler who continually researches international major 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.  He compares each major stock market’s history.

Fwd: keppler

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major 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.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy.  His analysis is rational, mathematical and does not cause worry about short term ups and downs.   To invest according to the Country Selection Strategy, it is necessary to construct diversified, risk-controlled, representative country portfolios in every BUY rated country, weighting each country approximately equally in the overall portfolio.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs that are similar to 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.

This is an easy, simple and effective approach to zeroing in on value because little 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 stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Slow, Worry Free, Good Value Investing

Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.  More about the gap in a moment.

Learn how to create profitable strategies that combine good value investments with unique, personal goals.

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, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

To help overcome this gap, we continually test the Pifolio, created with Keppler’s value analysis  with a unique trailing stop system created by our friend, Dr. Richard Smith.  His Smart Trailing Stops 2.0 alerts us to any of the shares which deviate from their good value status.

tradestops.com

Richard Smith received a PhD in Mathematical Systems Theory from New York State University, Binghamton, after completing his undergraduate degree at the University of California, Berkeley.  He has spent the last 10 years researching and developing algorithms and services that give individual investors the tools they need to remain in their personal investing comfort zone, and to succeed!

Third, we test the portfolio again using a contrarian, protection oriented analysis of ENR Asset Management.

The nature of value investing is to be contrary.  Markets rise and fall, long term, guided by forces of nature.  Markets jump up and down, short term, based on the human whims of fear and greed.  Hot markets are almost always overbought and severely corrected markets are almost always oversold.  This makes contrarian investing really simple.  All you need to do is what most investors are not.  Right?

Nothing in investing is ever simple.  Doing whatever the majority of the market is not doing may expose you to good value stocks, but this process also reveals troubled companies.  Good value selectivity is also required to create an effective contrarian strategy.  Contrarian investors need tactics that weed out the dogs from the good value.

erci roseman

Eric Roseman manages ENR Global Contrarian Accounts.

ENR’s Contrarian Value Account buys distressed global, dividend-paying equities at near low prices.

The margins of safety the fund seeks is low price, low debt,  high cash-flow, strong global brands and strong management.

ENR looks for ‘event-driven’ change; spinoffs and macro catalysts that lead to change and revaluation.  For example shares in oil companies are being revalued now.

The fund only invests in stocks that pay dividends, have growth greater than inflation and are near or at 52-week low prices.

ENR’s flagship managed accounts in 2008 lost just under 5% versus losses of more than 40% for global benchmarks.

ENR accounts actually gained 3.6% in the fourth quarter of 2008 compared to a 22% crash for the MSCI World Index.

Then I add my fifty years of experience.

For example in the 1980s, I spotted 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 that includes each or all of these countries with 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 powerful report “Silver Dip 2018”.  

The best way to protect and increase your savings and wealth is with a good value portfolio of equities.

Once this type of portfolio is in place, it can be enhanced with select speculations in precious metals when the price of these metals are in ideal conditions for speculation (as they are now).

No Cash is Required

The good value equity portfolio is used as collateral to make a conservative margin investment in precious metals ETFs.

Such leveraged speculations make the most sense when metals are at good value prices as gold is now.

I have spent substantial time researching to determine a fundamental real value for gold based on genuine purchasing power.  The math I use suggests that gold should be priced at about $1,350 and ounce at this time.  I work on the premise that above $1,350 an ounce, buying gold is a speculation that is not supported fundamentally.

I work on the theory that when gold is priced at $1,350, or below, it’s a good value for long term investing and thus for speculation.

Then I look at silver and platinum also to see if they are better value than gold (they both are better value now).

Next I check our trend advisors at Tradestops.com.

The Tradestops analysis shows that gold is in an upwards trend and has been for five months.

There are three main factors we watch at Tradestops.  First we look at the Stock State Indicator (SSI) of the share.  In the case of GLD below, the SSI is in the green zone.

The SSI is based on a mathematical analysis of a share’s price for the past 521 trading days.  An SSI in the green zone indicates that the stock is performing well and has not corrected below its recent high.  If a stock has not yet hit this price, it is still on an uptrend and safe to keep holding it.

gold

Tradestops analysis for the gold ETF symbol GLD.

The Tradestops analysis of SLV shows that this silver ETF is in a downwards trend and has been for the past one year.

An SSI in the red zone indicates that the stock has corrected more than its VQ% below a recent high. The stock is not behaving in a way that is usual based on its historical market trend.

silver

Tradestops analysis for the silver ETF symbol SLV.

This analysis suggests that this is a good time to speculate in gold, but not in silver.

However when the gold-silver price ratio is at 80 or above, history suggests that the price of silver will rise faster than the price of gold.

This means that right now the price of gold is a good value,  but silver may be an even better investment than gold.

The threshold we watch for is a spread of 80. When the price of gold is 80 times (or more) higher than the price of silver history this suggests that silver is undervalued to gold and will rise faster than gold.

Rarely has the gold-silver price ratio been as high as 80, only three times in the past 36 years.

Last month the ratio shot up to 81!

However the May 21, 2018, 30 Day Gold-Silver Ratio chart from Kitco.com below shows that the gold-silver price ratio dropped back below 80 around May 1, 2018.   The chart shows that silver’s price has been rising faster than gold’s prcie and this is an early indicator that silver’s trend may be ready to reverse.

gold silver ratio

The next indicator we’ll look for is the Tradestops entry alert that shows the silver ETF’s price is on the rise.  Momentum is a key component of Tradestops Stock State Indicator (SSI) system.  The TradeStops Stock State Indicator (SSI) entry signal is a very conservative signal. It requires a stock to have made a bounce off the bottom of at least one Volatility Quotient (VQ) percentage and the stock’s trend must be strongly positive.

That entry signal will be strong suggestion that silver’s price is on the rise.

Good and Bad News When No Cash is Required

The big benefit to an overall portfolio’s return is that any profits created on margin purchases are pure profit that come with with no extra invested money.

Of course there is always something we do not know, and any losses are also pure losses so protective devices are also wise, especially stop losses which are explained in our report “The Silver Dip 2018.

Conditions for the silver dip have returned.  The availability of low cost loans and silver are at an all time low.

You receive the Silver Dip 2018 FREE when you subscribe to the Purposeful Investing Course.

Save $141.95

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 $39.95 report “The Silver Dip 2018” free for a total savings of $141.95.

Triple Guarantee

Enroll in Pi.   Get the initial Purposeful Investing Course and “The Silver Dip 2018” right away, plus start receiving update lessons on a regular basis (Typically six lessons a month).

#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 to cancel your subscription and refund your subscription fee in full, no questions asked.

#3:  I guarantee you can keep the initial course and “The Silver Dip 2108” report as my thanks for trying.

You have nothing to lose except the fear.  You have the ultimate form of financial security to gain.

Save $141.95.   Subscribe to the Pi for $197.

Gary

 

 

 

(1) www.japantimes.co.jp: US says photos near collision Chinese warship legitimate

(2) www.wsj.com: world poverty falls below 750 million

How to Live Better With Value


Get the FREE report How to be of Value – Lead a Life of Freedom and Adventure in Good Times & Bad

Anchor of Value


Merri’s and my secret investing weapon has been a personal anchor of value.

Learn how to get a FREE report, on how to earn and live through good value, below.

See how that anchor helped me buy this manor house in the Cotswold.

gary-scott-in Gloucestershire

This huge, old manor house, built over a century,beginning in the 1700s… had wonderful views and our next door neighbor was Princess Anne at Gatcomb Park.  Buying it was a pretty big step for a middle class American from Rockwood Oregon, but I was able to do so due to my anchor of value.

Recently as part of our 50th year anniversary I was interviewed on an investment webinar and the moderator asked me this question:

There are a lot of real estate investors who have been successful buying, selling and holding real estate in their own backyards.  A few have been successful investing in 2-3 markets in the USA.

But it is rare to find a successful real estate investor who has been investing in real estate all over the world.

And even more rare to find a real estate investor who has been successfully investing all over the world for FIFTY (50) years!

You are that guy!  What’s the secret?

My secret to freedom has been to use an anchor of value that I developed to invest in American residential real estate.  Though I created this anchor in the 1960s it has helped me invest in real estate, stocks, bonds and business around the world to this day.

The philosophy behind this strategy and tactics can be used to create your own anchor for investing in shares, bonds, currencies or commodities  as well as real estate.

Let’s look at value first.  The anchor helps me understand that I am investing for profit, not to be right. 

Based on the “profit rather than pride” principle  there are two (and only two) reasons why we invest in real estate.   To rent for income or to resell the property for more than we had invested.

Based on this reasoning, there are three ways to spot value in residential property.

#1: The first way to spot value is based on how much NET income can the property generate after taxes, insurance, maintenance and management costs.

#2: The second method is based on relative comparables.  Calculate how much similar properties in the area are selling for.  Also find out how much similar properties in other areas are selling for.

#3: The third method is to calculate how much a property would cost to replace with new construction.

What is the anchor?

We can build an understanding of residential value by understanding the monthly mortgage payment or rent a buyer or renter can pay.  In the USA, for example, the typical bank limit on monthly mortgage payments is about 28 percent of your gross monthly income.  Banks generally will let a borrower devote up to 28 percent of their household income in a mortgage payment and expenses (including taxes, insurance and HOA dues).

If there are many families in an area who earn an average of $4,000 a month, then this will be a good market for rentals at $1,000 a month.

This simple formula provides a basis from which all dependable value can be measured.   This is the science of the valuation.

Using this approach, years ago, Merri and I have been able to spot dozens of contrasts, distortions & trends in real estate value, everywhere.

An added factor to add into the mix is appeal.  You could call appeal the art of the valuation.

Sometimes an investment can be a really good value, but a hard sell.  The best investments are underpinned by appealing good value products and services.

Investing in what you know (and  enjoy) helps you understand appeal and makes it easier to mesh the art and the science of valuation.

For example, Merri’s and my background have a lot in common.  Merri’s formative years were in Georgia and mine in Oregon.  There were many differences between these states.  Yet as baby boomers we have much in common.  We saw the same shows on TV, Howdy Doody, the Cisco Kid, Ed Sullivan, Gunsmoke. Roy Rogers, etc.  We read the same books in school such as the Bridge over San Luis Rey, the Red Badge of Courage.  We saw the same movies, heard the same radio , listened to the same Golden Oldies, read the same news, the same magazines, so it is not surprising that our tastes are pretty much the same.

The fact we are NOT special gives us the ability to understand appeal.  There are 60 million baby boomers who have that same background.  This gives us confidence that if we like a house, others will like it as well.  This gives us good judgement (from an investing point of view) when it comes to appeal.

Our strategy is to buy houses that appeal to us which have a reasonable potential to return a decent income (and likely appreciate) based on rent in the $1000 a month range.

For example, we recently looked at a nice house just offered and with access to a wonderful lake, 2 bedroom, 2 bathroom, in very good shape with an asking price of $169,000.  The house fit the $1,000 profile and because it had a very nice guest cottage as well, meant we could likely charge $1,200 a month rent.  Merri and I looked the place over and felt just fine offering $140,000, knowing we could go up to $145,000.

How did we come to such a price?

The math worked like this.  The house will rent for $1,200 a month.  The rental market is strong and at this price it will rent quickly.  That creates an income of  $14,400 a year.  Our target ratio of price to rent is 10%.  We want a 10% cash flow, so $14,400 a year rent justifies a $14,400 price.

First, the area where we are buying is in a bit of a bubble.  Prices have started to rise beyond a reasonable expectation of return.  We did not think the house would rent for $1,300 or $1,400 a month so we were not willing to rise to the $169,000 price.

We did not get that house.  In fact this was the fifth house in a row on which we were outbid.  Because faith is vital to successful investing, we need to stick to our strategy, and our strategy is based around that 10% cash flow.  That percentage is sufficient to give us a reasonable return on our investment.

Just because everyone else is paying too much for houses, does not mean we should make this error as well.

Anchors of value help us remain logical so we don’t invest in trends that are turning into bubbles.  Anchors of value help us avoid giving back profits because we stayed in a trend for too long.

For example, my real estate anchor of value first created in Portland, Oregon in the 1960s helped me successfully understand good real estate trends in Hong Kong, Fiji and London, then the Isle of Man, Naples, Dominican Republic and Ecuador and eventually led Merri and me to invest in Smalltown USA in Mount Dora, Florida.

Real estate has always been in our blood.  I do not know why but by the age 21, I had already built a $2,000 windfall into seven duplexes and a house  on 14th Ave (mortgaged then to the hilt) in the small town of Gresham, Oregon.  I could have continued to buy, sell and rent real estate in Oregon but the wanderlust bug bit me and when I was offered a job to sell mutual funds in Hong Kong, I began to travel throughout Asia.

Owning those duplexes and that house left me with an anchor of value.  I understood rents (at that time the 1960s) from $125 in Smalltown USA to $250 a month in cities.

When I arrived in Hong Kong in 1968 real estate rentals were about the same as in downtown Portland.

Fear had created good value in Hong Kong.  In 1968 there were communist riots and bombs being set off in the streets.  The first day I arrived a motorcycle policeman had his leg blown off by a terrorist bomb.  The Chinese army was massed on the border and there were continual talks about an invasion. Hong Kong businessmen were fleeing.  Real estate was literally being given away.

Life went on.  We all figured out the fastest route to the British and American war ships in the harbor for a quick exit in case the Chinese decided to invade.  We watched out for boxes in the street that could be bombs.  Then we just got busy with life, working and earning so we could pay our rent.

I rented a huge apartment on Shouson Hill Road overlooking the ocean and the village of Aberdeen.  The owner wanted to sell this block of apartments but I had no money or experience then.  He was so desperate that he made a deal.  Instead of paying him $250 a month rent I invested $250 into mutual funds for him.

Then in 1970 the company I worked for sent me to London to spend a year at its headquarters developing a European sales training program.  I rented a nice house near Golders Green tube station on Finchley Road.  The rent was the equivalent of $250 a month.

In 1971 I was moved to work in San Francisco and I purchased a home in Petaluma, California.

petaluma

I bought this house in Petaluma California for $33,000 and assumed a 5% GI mortgage. Payments were about $175 a month.

In 1972 I returned and worked in Hong Kong for another four years.

The early 1970s was a time of serious inflation.  During that time I watched the prices and rents of real estate at the duplexes in Gresham, the house in Petaluma, and especially in Hong Kong rise… a lot!

In 1976, when I moved from Hong Kong back to London and noticed that London real estate was priced about the same as it had been in 1970.  This puzzled me. Why had London property prices remained flat despite inflation?

On investigation, I learned that there had been a huge real estate crash in 1970 continued to distort and dampen real estate prices six years later despite the rampant global inflation.  The British pound had also collapsed dropping 35% versus the U.S. dollar from 2.4 dollars per pound to a new all time low of 1.52 dollars per pound and at one point hit a low of one dollar per pound.  To my way of thinking, London houses, which I thought were already very cheap by world standards, just became 35% cheaper.

london-house

The house in Bedford Park.

I could not resist and began property shopping and eventually bought a five bedroom house in Bedford Park in West London. I made a 10,000 pound down payment and took a 25,000 pound loan to meet the 35,000 pound asking price.

First, I was right. London property had been under priced.  I was able to sell the house four years later for 115,000 Pounds.  I made a profit of 80,000 pounds.  But the currency change helped enormously too.  The pound had risen to over 2.2 dollars per pound.  My 80,000 pound profit was now worth $215,000.

I was willing to make this  purchase because I could rely on a mental anchor of value… a residential property that a working person could rent in the $250 a month range.  I was investing in what I knew and was comfortable with.

Manx real estate came next.  In the 1980s I had an offshore corporate formation business and noticed that Isle of Man overseas companies were as good as Jersey and Guernsey structures, but cost less than half.  This led me to believe that the Isle of Man would increase in popularity as a financial center.  While visiting, Merri and I discovered that a long depression had forced over 2,000 properties onto the Island real estate market (population was only 60,000).  We began taking real estate buying tours to the Isle of Man because rents and house prices were so low.  Some delegates purchased remodeled beach front condos for $12,000.

Then while conducting a seminar in Florida, we saw that real estate in Naples, Florida was much less expensive than on the East Coast of Florida.  Rents in Miami  and Ft. Lauderdale seemed really high to us, but Naples prices were much lower.  Merri had been living in Naples for some time and found a wonderful old large house just off the beach.  We bought it for a song (compared to the price we sold it for!)

Naples prices skyrocketed while we were living there and in 1995 we visited Ecuador.  Merri and I saw Ecuadorian beach front lots that would cost two million dollars in Naples that were selling for $5,000.   We saw we could buy a house on Ecuador’s beach for a price that we understood and were comfortable with.

Cotacachi hotel El Meson de las Flores

A hotel we purchased in Ecuador.

By 2009 Ecuador prices has skyrocketed and Florida real estate faltered.  We began selling out our Ecuador real estate and buying again in Florida.

In Florida we saw great rental value.  We also wanted to live closer to our children and grandchildren.  We knew that studies had shown that 80% of adults 45 and older believe it is important to live near their children and grandchildren.  Those 60 million people, just like us, were thinking differently about where they would buy and/or rent a home.

We selected Mt. Dora as a small town to buy rental real estate for numerous reasons, but the first feature was its proximity to our daughter and grandson.

I can look back through this 50 year travel and real estate adventure and see that my decisions and investments have all been linked to that original anchor of value.

We live in a turbulent world and can expect rapid change, hidden agendas, huge shifts in communication.  When we are caught in the currents of such rapid shifts, our anchors of value can help us remain steady and secure.

Gary

Get the FREE report: How to be of Value – Lead a Life of Freedom and Adventure in Good Times & Bad

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 he 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.

The course examines and regularly reports on the hows and whys of seven professionally managed portfolios so we can learn how managers find and invest in good value.  The Pifolios are:

  • Keppler Good Value Developed and Emerging Market Pifolios
  • State Street Global Advantage Emerging & Developed Market Pifolios
  • Gold & Silver Dip Pifolio
  • ENR Advisory Extra Pifolio
  • Tradestops.com Trailing Stops Pifiolio

tradestops

As you can see in this image (click to enlarge) the top performing Pifolio we are tracking is the State Street Global Advantage Pifolio was up 43.15%.  Here is the breakdown of that current Pifolio.

pifolio

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

State Street is one of the largest fund managers in the world and their Global Advantage funds invest in good value shares in good value markets.

In the updates we review each portfolio, what has been purchased and sold, why, the ramifications for high risk, medium risk and low risk investors.

At the beginning of 2018 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!

This portfolio has outperformed the US market (S&P 500) in 2017 as the chart below shows.

My portfolio blue.  S&P 500… green.

Screen Shot 2018-06-04 at 7.39.15 AM

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 2018” 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 2017” 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 2018” 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 50th 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.

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 out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

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 2018” 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

 

 

 

 

 

At the Gambler’s Heart


Wanna be a gambler?

Start a casino or be a pro.  These are the only way to be sure you’ll win.

There are about 1,500 casinos within the United States.  The total revenue for the gambling industry in the United States each year is about $40 billion. This means that if all casinos profited equally, they would make, on average, $26,666,666 annually. When divided by the 365 days in a year, the result is about $73,000 each day. This is only a mean number, however. Some casinos make much more, while others make much less.

These casinos don’t profit by letters gamblers win.

The casino that makes the most money in Las Vegas is said to be Wynn Las Vegas (around $500 million over a year).

The key for Wynn, is that gambling is simply a come-on to help attract guests.   67% of the company’s revenue is dominated by food and beverage, day and nightclub operations and the hotel room income.

If you listen to Steve Wynn talk about building a casino, he reinforces the fact that gambling is not the key. He says: “it’s the design of the entire resort that leads to this performance. It’s sight lines, material textures, performances, architecture, and every other decision that goes into building a great resort”.

Most of us cannot do that… build a casino and go through the myriad of hoops even to get started much less run the place.

Okay how about starting an Internet casino?

Starting a casino online still requires a big investment just to get started.  Most gambling sites lease their software from one of the big 3 casino software providers and they are expensive…  $11,000 or $12,000 a month for the software.  They also get a cut of the casinos’ winnings along with affiliates that advertise the casino in exchange for a commission on each player.  These and other expenses add up to $20,000 a month in fixed expenses, and commission that reach 40% of the revenue created by each gambler.  To just break even, an online casino needs to earn enough money so that 60% of its earnings equate to $20,000 a month.  So we’re looking at a minimum casino win of at least $33,000 a month just to break even.

The math in online gambling says that each new gambler who signs on to an Internet gambling site eventually generates $1,000 in revenue through his or her losses.

We may not want to take that risk… with all that expanse and know how required.  Nor do we want to be the gambled that loses a grand!

So can we become a professional gambler?

Think hard before quitting your day job. Only one-half of 1 percent of all gamblers fall into the professional category, according to the Council on Compulsive Gambling of New Jersey. While actual numbers are hard to come by, people in the field say the number of professional gamblers may be as few as 100,000 nationwide. Such gamblers are heavily regulated and must win a lot — and keep good records — to make the financials work.

Professional gamblers really are not gamblers, but are investing pros who cash in on the imbalances of gamblers.

Experts say that unlike compulsive gamblers, professional gamblers approach betting as a job rather than as a fulfillment of an addiction.

”Professional gamblers never go over the line,” says Kevin O’Neill, the deputy director of the Council on Compulsive Gambling of New Jersey, an affiliate of the National Council on Problem Gambling that has a prominent role because of Atlantic City’s casino industry. ”They take carefully calculated risks and know exactly when they have an edge.”

”There are only a few games you can make money on in the long run,” Mr. Miller said. ”You can’t beat the casinos. In sports betting you just have to beat the spread,” the expected point difference between the favored team and the underdog.

Professional gambling requires precision money management and meticulous record-keeping — practices in which most gamblers do not engage.

So we can’t start a casino real or online.  We probably won’t become a professional gambler.

Let’s do the stock market instead!

We find the same factors at play in stock markets as in casinos.   The big banks and brokerages are as rich (richer actually) than the casinos. They make their money taking a slice off each bet we make as investors.   They charge us to let us get in and stay in the game, often getting a share (management fee) of all the action (wins only, no sharing the losses).

On top of that the banks and brokerages hire equip and train professional investors  who often bet against their own customers!

When we invest in financial and commodity markets, we are either gamblers or pros, long term winners or losers.

Investing pros follow the same rules as professional gamblers.  Professional investing includes precision money management and meticulous record-keeping.

There are three huge advantages that investors have over gamblers.  We have many more games to choose from. We get to  make the odds. We can decide when to end the game.

When the dice stop rolling… when the wheel comes to a halt.  When the last card in flipped… the gambler’s bet is over.  Investors choose when the game ends so the bet can run for decades until the investment is a winning hand.

Investing is an activity where you can make money in the long run, but can only be sure to make money, when invested for the long run.

Professional investors never go over the line.  They take carefully calculated risks and know exactly how long they can hold an investment… when they will take a profit and when they will accept a loss.

We have enjoyed ten years where investing has been easy.  Even the stock market gamblers have looked good.  These easy conditions won’t last and when they change… the pros will make even more money… from guess who?

Earn.  Save.  Invest.  When you do, invest like a pro.

Gary

Profitable Investing Made EZ

There are only three steps to sustained, safe profits in investing.   Seek value.  Cut losses.  Take profits.

Quotes from three great value professional investors support this thought.

Be fearful when others are greedy, and greedy when others are fearful.” Warren Buffett

“In the short run, the market is a voting machine, but in the long run it is a weighing machine.” Ben Graham

We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” Charlie Munger

We do not have to be brilliant to preserve our wealth.  When it comes to investing, discipline can make professional investing EZ because you become smarter than the smartest man in the world.

newton

Sir Issac Newton

Sir Isaac Newton is widely regarded as one of the most influential scientists of all time.  His role was key in the scientific revolution.

His book “Mathematical Principles of Natural Philosophy” laid the foundations for mechanics.

He supplied a foundation to optics.

He helped develop modern calculus.

Newton formulated the laws of motion and gravitation and confirmed the heliocentric model of the cosmos.

Newton built the first practical reflecting telescope.

His theories about color and cooling and the speed of sound were spring boards in physics.

In math, Newton contributed to the study of power series, the binomial theorem to non-integer exponents, and a method for approximating the roots of a function.

He is said to have been the greatest genius who ever lived!

But Sir Issac Newton also lost his shirt in the stock market. 

Newton said: “I can calculate the motions of the heavenly bodies but not the madness of the people.”

Sir Issac forgot the intelligence in seeking value. He ignored the fact that buying and selling discipline is more important than being smart.

How can we gain this discipline?  Discipline comes from simple math which is why two of the three exports I use in my Purposeful investing course (Pi) and mathematicians not economists.  I am happy to introduce an investing math program that instills investment discipline in our Pi course.

Use math and time, not emotion and timing to protect your wealth.

We need a strategy so our savings, investments & income are sufficient for a full lifetime which can be much longer than statistics suggest.  That’s really good to know but longer life expectancy is expected to worsen the shortfall in Social Security by 11 percent over the next 75 years.

What will a longer, active life do to our savings and budgets?

During nearly five decades of global investing I have noticed that some people, such as Warren Buffett, have a good value strategy that makes sure they do not lose, but increase their wealth again and again.

What is this strategy?  It is a good value strategy based on three tactics.

The first tactic is to seek safety before profit.

A research paper that studied Warren Buffet’s investing strategy was published at Yale University’s website. This research shows that the stocks he 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 so you can let time do its work.  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 Buffet strategy integrates time and value for safety and profit.

A third, 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 value, time and leverage to buy and hold “cheap, safe, quality stocks”.  He uses 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.

You can learn how to use this type of three point strategy with the Purposeful investing Course (Pi).  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.

Pi reveals investing secrets and the sciences that make investing easy, safer, less time consuming and increases the chances of profit.

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 is based entirely on good math and uses to time to take advantage of value.

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): Michael Keppler, Eric Roseman, Thomas Fischer (for currency positions) and Richard Smith, PhD (for trailing stop alerts).

The Pifolio analysis begins with Keppler who continually researches international major 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.  He compares each major stock market’s history.

Fwd: keppler

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major 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.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy.  His analysis is rational, mathematical and does not cause worry about short term ups and downs.   To invest according to the Country Selection Strategy, it is necessary to construct diversified, risk-controlled, representative country portfolios in every BUY rated country, weighting each country approximately equally in the overall portfolio.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs that are similar to 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.

This is an easy, simple and effective approach to zeroing in on value because little 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 stock in that country is an attractive investment, so you do not have to pick and choose shares.  You can invest in the index which is like investing in all the shares in the index.  All you have to do is invest in an ETF that in turn invests passively in all the shares of the index.

Slow, Worry Free, Good Value Investing

Stress, worry and fear are three of an investor’s worst enemies.  These are major foundations of the Behavior Gap, a trait exhibited by most investors, that causes them to underperform any market they choose.  The behavior gap is created by natural human responses to fear.  The losses created by this gap grow when investors trade short term under stress.  More about the gap in a moment.

Learn how to create profitable strategies that combine good value investments with unique, personal goals.

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, when they should embrace risk.  Purpose is the most powerful motivator,  stronger than fear and greed.  One powerful way to overcome the behavior gap is to invest with a purpose.

To help overcome this gap, we continually test the Pifolio, created with Keppler’s value analysis  with a unique trailing stop system created by our friend, Dr. Richard Smith.  His Smart Trailing Stops 2.0 alerts us to any of the shares which deviate from their good value status.

tradestops.com

Richard Smith received a PhD in Mathematical Systems Theory from New York State University, Binghamton, after completing his undergraduate degree at the University of California, Berkeley.  He has spent the last 10 years researching and developing algorithms and services that give individual investors the tools they need to remain in their personal investing comfort zone, and to succeed!

Third, we test the portfolio again using a contrarian, protection oriented analysis of ENR Asset Management.

The nature of value investing is to be contrary.  Markets rise and fall, long term, guided by forces of nature.  Markets jump up and down, short term, based on the human whims of fear and greed.  Hot markets are almost always overbought and severely corrected markets are almost always oversold.  This makes contrarian investing really simple.  All you need to do is what most investors are not.  Right?

Nothing in investing is ever simple.  Doing whatever the majority of the market is not doing may expose you to good value stocks, but this process also reveals troubled companies.  Good value selectivity is also required to create an effective contrarian strategy.  Contrarian investors need tactics that weed out the dogs from the good value.

erci roseman

Eric Roseman manages ENR Global Contrarian Accounts.

ENR’s Contrarian Value Account buys distressed global, dividend-paying equities at near low prices.

The margins of safety the fund seeks is low price, low debt,  high cash-flow, strong global brands and strong management.

ENR looks for ‘event-driven’ change; spinoffs and macro catalysts that lead to change and revaluation.  For example shares in oil companies are being revalued now.

The fund only invests in stocks that pay dividends, have growth greater than inflation and are near or at 52-week low prices.

ENR’s flagship managed accounts in 2008 lost just under 5% versus losses of more than 40% for global benchmarks.

ENR accounts actually gained 3.6% in the fourth quarter of 2008 compared to a 22% crash for the MSCI World Index.

Then I add my fifty years of experience.

For example in the 1980s, I spotted 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 that includes each or all of these countries with 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 powerful report “Silver Dip 2018”.  

The best way to protect and increase your savings and wealth is with a good value portfolio of equities.

Once this type of portfolio is in place, it can be enhanced with select speculations in precious metals when the price of these metals are in ideal conditions for speculation (as they are now).

No Cash is Required

The good value equity portfolio is used as collateral to make a conservative margin investment in precious metals ETFs.

Such leveraged speculations make the most sense when metals are at good value prices as gold is now.

I have spent substantial time researching to determine a fundamental real value for gold based on genuine purchasing power.  The math I use suggests that gold should be priced at about $1,350 and ounce at this time.  I work on the premise that above $1,350 an ounce, buying gold is a speculation that is not supported fundamentally.

I work on the theory that when gold is priced at $1,350, or below, it’s a good value for long term investing and thus for speculation.

Then I look at silver and platinum also to see if they are better value than gold (they both are better value now).

Next I check our trend advisors at Tradestops.com.

The Tradestops analysis shows that gold is in an upwards trend and has been for five months.

There are three main factors we watch at Tradestops.  First we look at the Stock State Indicator (SSI) of the share.  In the case of GLD below, the SSI is in the green zone.

The SSI is based on a mathematical analysis of a share’s price for the past 521 trading days.  An SSI in the green zone indicates that the stock is performing well and has not corrected below its recent high.  If a stock has not yet hit this price, it is still on an uptrend and safe to keep holding it.

gold

Tradestops analysis for the gold ETF symbol GLD.

The Tradestops analysis of SLV shows that this silver ETF is in a downwards trend and has been for the past one year.

An SSI in the red zone indicates that the stock has corrected more than its VQ% below a recent high. The stock is not behaving in a way that is usual based on its historical market trend.

silver

Tradestops analysis for the silver ETF symbol SLV.

This analysis suggests that this is a good time to speculate in gold, but not in silver.

However when the gold-silver price ratio is at 80 or above, history suggests that the price of silver will rise faster than the price of gold.

This means that right now the price of gold is a good value,  but silver may be an even better investment than gold.

The threshold we watch for is a spread of 80. When the price of gold is 80 times (or more) higher than the price of silver history this suggests that silver is undervalued to gold and will rise faster than gold.

Rarely has the gold-silver price ratio been as high as 80, only three times in the past 36 years.

Last month the ratio shot up to 81!

However the May 21, 2018, 30 Day Gold-Silver Ratio chart from Kitco.com below shows that the gold-silver price ratio dropped back below 80 around May 1, 2018.   The chart shows that silver’s price has been rising faster than gold’s prcie and this is an early indicator that silver’s trend may be ready to reverse.

gold silver ratio

The next indicator we’ll look for is the Tradestops entry alert that shows the silver ETF’s price is on the rise.  Momentum is a key component of Tradestops Stock State Indicator (SSI) system.  The TradeStops Stock State Indicator (SSI) entry signal is a very conservative signal. It requires a stock to have made a bounce off the bottom of at least one Volatility Quotient (VQ) percentage and the stock’s trend must be strongly positive.

That entry signal will be strong suggestion that silver’s price is on the rise.

Good and Bad News When No Cash is Required

The big benefit to an overall portfolio’s return is that any profits created on margin purchases are pure profit that come with with no extra invested money.

Of course there is always something we do not know, and any losses are also pure losses so protective devices are also wise, especially stop losses which are explained in our report “The Silver Dip 2018.

Conditions for the silver dip have returned.  The availability of low cost loans and silver are at an all time low.

You receive the Silver Dip 2018 FREE when you subscribe to the Purposeful Investing Course.

Save $141.95

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 $39.95 report “The Silver Dip 2018” free for a total savings of $141.95.

Triple Guarantee

Enroll in Pi.   Get the initial Purposeful Investing Course and “The Silver Dip 2018” right away, plus start receiving update lessons on a regular basis (Typically six lessons a month).

#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 to cancel your subscription and refund your subscription fee in full, no questions asked.

#3:  I guarantee you can keep the initial course and “The Silver Dip 2108” report as my thanks for trying.

You have nothing to lose except the fear.  You have the ultimate form of financial security to gain.

Save $141.95.   Subscribe to the Pi for $197.

Gary

 

 

 

 

The Problem With Vig


The vig can become a crushing economic force.

The term “vig” is short for “vigorish” which in gambling is the difference between what is wagered and what is won.

Vig also describes the interest to a loan from loan sharks.  Street loans are given freely because borrowers are very unlikely to pay back the entire loan.  Instead the borrower pays the vig (high interest) to keep his or her kneecaps intact. The vig does not lower principle and the lender, like a parasite, makes the borrower come up with the vig every week.

We all know that this is not a good situation to be in…  never ending debt and interest rates so high, they suck the energy from our lives.   Those who are stuck with the vig are smothered with oppressive debt that drags at their every effort.

I’ve never thought much about it, because in the 50 years I have been in this business, no reader has ever shared that paying vig was a problem.

Then it struck me,  the US government, acting on our behalf, is forcing us all to pay increasing amounts of vig.

And the problem is getting worse!

cbo.gov

Chart at CBO.gov “The Budget and Economic Outlook: 2018 to 2028” (1).

The Congressional Budget Office says: In CBO’s projections, the economy grows relatively quickly this year and next and then more slowly in the following several years. The federal budget deficit rises substantially, boosting federal debt to nearly 100 percent of GDP by 2028.

Not only are we being forced to pay the vig, we are borrowing more to do it!

The problem does not stop there. Even as federal debt reaches 100%, it speeds up, passes its highest historical point, ever (106%), and is still rising very quickly.

The main driver of this fast debt growth are the interest payments on the debt. As debt and interest rates rise, the interest costs alone are expected to double over the next ten years.

Federal debt interest will cost even more than Social Security over the next three decades.

Even those living out of the US will be affected by the global economic slowdown, tariffs and unstable currencies that are accelerated by the cost of US debt.

We can however arrange our lives so that federal vig does the least damage.  We can reduce debt during the existing good time.  We can live within our means and we can seek good value in everything we do.

Seek an “anchor of value” (3) using mathematics. Math is a reflection of reality.  Values reflected in math are reflections of the universe, orderly, balanced, harmonic and logical.

Good value that is verified by math is a balancing factor in an imbalanced world.

Gary

See how to use mathematics in value investing.

The Only 3 Reasons to Invest

garyheadshot

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.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

This is why the core Pi model portfolio (that forms the bulk of my own equity portfolio) consists of 19 shares and this position has not changed in over two years.  During these two years we have been steadily accumulating the same 19 shares and have not traded once.

The portfolio has done well in 2017, up 22.6%, better than the DJI Index.

motif

However one or even two year’s performance is not enough data to create a safe strategy.

The good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management and the mathematical trend analysis of Tradestops.com.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major 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.  He compares each major stock market’s history.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major 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.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His 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 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 stock in that country is an attractive investment, so you do not have to spend 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 use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, France, 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, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

iShares Country ETFs make it easy to that invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

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.

Pi uses math to reveal the best value markets then protects its positions using more math created by Richard Smith founder and CEO of Tradestops.com to track each share’s trend.

We use Smith’s  algorithms that calculate momentum of the good value markets.

dr richard smith

The Stock State Indicators at Tradestops.com act as a full life-cycle measure that indicates the health of each stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.

Kepppler’s analysis shows the value of markets.  The SSI signal indicates the current trend of each stock (performing well, or in a period of correction, or stopped out).

The SSI tells you one of five things:

Screen Shot 2017-08-08 at 6.51.59 AM

Screen Shot 2017-08-08 at 6.52.12 AM

Screen Shot 2017-08-08 at 6.52.22 AM

Akey component of the Stock State Indicator (SSI) system is momentum based on the latest 521 days of trading.  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 is an example of how SSIs work.  This example shows the Developed Market Pifolio that we track at Tradestops.com.

tradestops

Equal Weight Good Value Developed Market Pifolio.

At the time this example was copied, all the ETFs in the Developed Market Pifolio (above) currently had a green SSI.

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 Pifilios are invested in good value markets reduces long term risk.

Additional protection is added by using trailing stops based on the 521 day momentum of each stock in the Pifolio.

Take for example the graph below from our Tradestops account that shows the iShares MSCI United Kingdom ETF.  This ETF had a green SSI and a Volatility Index (VQ) of 13.26%.  This means the share can move 13.26% before there is a trend shift.

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

Pi purchased the share at$31.26 and in this example the share was $34.43 and rising.  Tradestop’s algorithms suggested that if the price drops to $31.69 its momentum would have stopped and it would have shifted into 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.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

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.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get 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 Platinum Dip 2018” 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 Dip Strategy with platinum.   The “Platinum Dip 2018” 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 “Platinum Dip 2018” 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.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

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.

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 out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

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 2017” 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 “Platinum 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.

Gary

(1) www.cbo.gov/publication/53651

(2) www.nytimes.com: Ekhart Indiana rvs economic slowdown

(3) How to Create an Anchor of Value

Occam’s Investing


One way to see a complex future is with simplicity.

Occam’s razor, attributed to William of Ockham (c. 1287–1347), an English Franciscan friar, scholastic philosopher, and theologian is the problem-solving principle that the simplest solution tends to be the right one.

So here’s a secret that can help you invest more simply in an increasingly complex world.

“Avoid fashion, look at utility and value instead”.

Imagine, for example, that you were deciding which type of car company to invest in?

This is a process.

ecuador-global-investing

Me and my Bentley.

Realize that we are sold a bill of goods when we buy a luxury car.

In my dumber days I had a lot of luxury cars, Mercedes, BMW, a Bentley and a Rolls Royce, to name a few.

It took some time to figure out that this was sort of a fool’s game…  high buy in.. expensive maintenance and ridiculous repair. For what?

Who was I trying to impress and fool?  Who was making a fool out of me?

The crux of the lesson came when that Bentley above needed the front wheel bearings replaced.  The Rolls dealer wanted over $300 for a set.  Plus a really high installation fee.

Then I discovered that the Bentley, Rolls bearings were actually Chevrolet bearings with the words Rolls Royce stamped on them.  I bought the bearings at Autozone for $23, installed them myself and saved over 500 bucks.

A guys gotta learn… huh?

I sold that Bentley left than a week after fixing the bearing and bought a Suzuki.

I switched my focus on autos with high utility.

tangled-web

I love that Suzuki. It’s still at our farm, a ratrod, but running good, after 31 years.  It’s great on the farm but the utility is not good.

car

Instead my focus on value and utility led to the minivan.  With a mother, five kids and 8 grandchildren, the need to haul sheets of plywood or a bale of hay… I benefit from this really functional car.

Plus I find that my Honda Odyssey is a pretty good ride.

The New York Times article “You Don’t Drive a Minivan? You Should. Here’s Why” (1) agrees.

It says: We often shun the ones that can help our lives the most. Maybe out of pride. Perhaps ignorance. Many of us are looking for good solid family material, yet reject prospects that are committed and generous.

I am, of course, talking about minivans.

Minivans aren’t always hitting you up for gas money

Vans are underrated haulers, capable of swallowing full sheets of building material or giant 70-inch television impulse buys. And unlike uncovered pickup beds, minivans keep those items secure and dry.

Vans are the original sport utility vehicle.  “I know minivans have a bad rap, but it drives very well — kind of sporty, actually.”

If not the van… other vehicles that have utility is the place to look.

The Wall Street Journal article “America has fallen out of love with the sedan” (2) says In the age of the SUV, the humble sedan is getting kicked to the curb.

“It’s all about activity today, rather than elegance or performance,” said John Wolkonowicz, an automotive historian in Boston. SUVs “are made for dogs and kids and activities and taking care of the house. It’s the tool that does the job.”

At heart, however, the travails of the car stem from the shifting relationship between people and their automobiles. Owners are less concerned with the shape of the sheet metal or what’s under the hood than they are with how many people their vehicles can transport, or how much sports gear or home-remodeling supplies they can put into the rear hatch.

Before a recent camping trip, Eric Moe, a 31-year-old manager at a manufacturing plant near Madison, Wis., stuffed his small Honda SUV with four coolers, three tents, four chairs, 17 gallons of water and loads of camping gear. On the road, his SUV got better gas mileage than any of the three cars he had previously owned.

When we stop letting fashion drive our actions and think for ourselves, we can really get ahead.

This car example is not about whether or not a minivan is the best car.

This is not about choosing to invest in the car company with the best minivan.

This is about a process that makes decisions simple in a complex world.

A car example is good because there are few consumer purchases that are as impacted as much by fashion and image.

The minivan’s main holdup is its unfashionable image of domestic drudgery, even though they’re a dog’s and a back’s and a pocketbook’s best friend.

Why oppose the common thought?

We are continually affected by what’s around us?  It is very hard to ignore the common thought especially when it’s in a stampede.

We are sold on a bill of goods and lifestyle that often make little sense but is accepted simply because it is familiar and it seems that everyone loves it. We are inundated with the idea that acquiring new things will make our lives better. We are indoctrinated that if we do and buy what everyone else is, we are good.

This agenda of just a few people creates the fashion of thought we are taught to buy. For example, less than a dozen men mainly influence: ABC, NBC, CBS, the Turner Broadcasting System, CNN, MTV, Universal Studios, MCA Records, Geffen Records, DGC Records, GRP Records, Universal Records, Interscope Records, ESPN, Miramax Films, Touchstone Pictures.

Just ten food companies control a third of the world’s workers!

The agendas of these companies are not in our best interest!

So when investing, keep it simple.  When fashionable ideas rush towards you, get out of the way… or at least go in the opposite direction.

Think about value and utility instead of fashion.  You’ll find investing simpler in this increasingly complex world.

Gary

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 he 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.

The course examines and regularly reports on the hows and whys of seven professionally managed portfolios so we can learn how managers find and invest in good value.  The Pifolios are:

  • Keppler Good Value Developed and Emerging Market Pifolios
  • State Street Global Advantage Emerging & Developed Market Pifolios
  • Gold & Silver Dip Pifolio
  • ENR Advisory Extra Pifolio
  • Tradestops.com Trailing Stops Pifiolio

tradestops

As you can see in this image (click to enlarge) the top performing Pifolio we are tracking is the State Street Global Advantage Pifolio was up 43.15%.  Here is the breakdown of that current Pifolio.

pifolio

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

State Street is one of the largest fund managers in the world and their Global Advantage funds invest in good value shares in good value markets.

In the updates we review each portfolio, what has been purchased and sold, why, the ramifications for high risk, medium risk and low risk investors.

At the beginning of 2018 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!

This portfolio has outperformed the US market (S&P 500) in 2017 as the chart below shows.

My portfolio blue.  S&P 500… green.

Screen Shot 2018-06-04 at 7.39.15 AM

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 2018” 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 2017” 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 2018” 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 50th 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.

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 out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

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 2018” 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

 

 

 

 

 

(1) www.nytimes.com/2018/08/30/business/drive-a-minivan.html

(2) www.wsj.com: America has fallen out of love with the sedan

Equity Seasonality Warning


Earlier this month we sent our Purposeful Investing subscribers a warning about Seasonality.

We quoted one of the investment managers we track (Eric Roseman) who wrote: “Beware Worst Months of Seasonal Weakness”.

Though I’m tempted to plug one or two international stocks, I’m going to wait until later next
month or beyond. We’re soon entering the gates of the worst month of the year, statistically
speaking, for the S&P 500 Index. October might be infamous for two major stock-market
crashes in 1929 and 1987, but September is notoriously bad for stocks and other risk assets.

According to Yardeni Research, September has averaged a 1% loss from 1928 to 2017. Other
losing months include February and May, down 0.1% each.

We sent this note because the best period of stock market growth begins again in November 2018.  This means that September and October stock markets may tumble.  This can create losses, but low prices can also offer extra value.

Keppler Asset Management, another investment manager we track,  agrees with seasonality so we like to remind readers that the worst month’s in the stock market can create value opportunity.

A statistical analysis was done some years ago by Michael Keppler. This study shows that most appreciation in most major equity markets, is achieved from the beginning of November through the beginning of May.

Michael wrote: “Gary, We have done extensive research on seasonality and I am proud to announce that a shortened version of a major study which I have coauthored with our Director of Research, Dr. Xing Hong Xue, will be published in the Winter Issue of the Journal of Investing. Our research shows that basically in all major equity markets, nearly all returns are achieved from the beginning of November through the end of May. All the best to you and Merri. Michael

Keppler showed that over 30 years the Dow grew 8.16% overall.

There was 8.36% Growth in the months November through April.
There was 0.37 growth in the months May  to October.
$100 invested in the Dow grew to $848 overall over the 3o years.
$100 invested in the Dow grew to $1,067 if it were invested only in the months of November through April.

$100 invested in the Dow dropped to $79 if it were invested only in the months of May to October.

Historically the best six months for the best chances of equity profits starts in about 60 days.

There is no on-off switch but we should be thinking more about risk aversion and value accumulation, beginning about now,  until November.

Eric Roseman shared one idea that may do well at this time in the Advisory Extra bulletin when he wrote: “Why Low Stock-Market Volatility is Your Ticket to Big Gains”.

After skyrocketing earlier last February, global market volatility has since plunged to its lowest levels in nine months as complacency returns amid a ten-year secular bull market. From a high the first week of February at 37.32, the CBOE Volatility Index has crashed 68% to 12.02.

Throughout 2017, the VIX, a stock-market fear gauge, traded at its lowest levels since its introduction in 1993. Despite a brief spike in the first quarter, volatility remains depressed.

But with U.S. stocks still fetching their second-highest multiples in history, the Fed still hiking interest rates and trade wars escalating, the bull market in corporate earnings might be approaching its zenith – if it hasn’t already. Companies have started to raise prices to compensate for rising input costs. And the tonic of big corporate tax cuts enacted in December is bound to run out gas later this year or in 2019. The odds are therefore high that corporate operating margins are going to decline over the next several months, and that means heightened volatility.

Screen Shot 2018-08-09 at 7.57.35 AM

If you invest in a portfolio of global stocks and other risk-based assets like high-yield bonds, commodities, real estate or foreign currencies, holding an asset that can potentially thrive as volatility increases can cushion your losses. Finding alternative assets that appreciate in a bear market isn’t easy: Only a few such securities in the past have posted gains, including the Japanese yen (our favorite), the Swiss franc, Treasury securities and on occasion, gold.

There are a number of ETFs that claim to do better during periods of volatility such as the iShares Edge MSCI Global Minimum Volatility Global share ETF (ACWV) and the iShares Edge MSCI US Minimum Vol USA ETF (USMV).  My analysis is that these low volatility ETFs don’t protect much and perform poorly long term compared to standard indices such as the Dow, NASDAQ, etc.

Eric suggests a specific equity that may do well during the increased volatility in the August advisory.

Eric wrote: I think investors looking to hedge their risk exposure can add another security to the list of
potential market hedges: High Frequency Trading firms. Following a huge drubbing since
peaking last spring, the leading firm in this space has tanked a cumulative 46%, offering an
exceptional entry point for new investors.

High Frequency Trading companies or HFTs use computers and speedy connections to exchanges to buy and sell shares in fractions of a second. It’s a controversial business due to critics like financial author, Michael Lewis, who accused high-speed traders of exploiting ordinary investors in the 2014 book, ‘Flash Boys.’

Though it’s true that HFTs arbitrage securities to make quick profits, we like the business because it’s incredibly profitable amid high periods of volatility.

Case in point: February 5 to 9, 2018. HFTs in our ENR Safe-Haven Portfolio posted gains of 35% to 55% in just four days of trading that week when world markets plunged. Heavy volume and volatile markets are ideal for trading firms and we own stakes in two of largest companies.

The warning here is volatility may be ahead for the next two months.  Equities that lose less in bear markets or do well during periods of high volatility may be a good addition to portfolios now.

Subscribe to the Purposeful Investing Course to see details of the specific equity recommended now along with a stop loss and trading analysis by Tradestops.com showing good price points for this medium risk equity with a 23.81% volatility quotient.  Details are below.

Gary

The Only 3 Reasons to Invest

garyheadshot

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.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

This is why the core Pi model portfolio (that forms the bulk of my own equity portfolio) consists of 19 shares and this position has not changed in over two years.  During these two years we have been steadily accumulating the same 19 shares and have not traded once.

The portfolio has done well in 2017, up 22.6%, better than the DJI Index.

motif

However one or even two year’s performance is not enough data to create a safe strategy.

The good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management and the mathematical trend analysis of Tradestops.com.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major 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.  He compares each major stock market’s history.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major 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.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His 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 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 stock in that country is an attractive investment, so you do not have to spend 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 use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, France, 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, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

iShares Country ETFs make it easy to that invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

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.

Pi uses math to reveal the best value markets then protects its positions using more math created by Richard Smith founder and CEO of Tradestops.com to track each share’s trend.

We use Smith’s  algorithms that calculate momentum of the good value markets.

dr richard smith

The Stock State Indicators at Tradestops.com act as a full life-cycle measure that indicates the health of each stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.

Kepppler’s analysis shows the value of markets.  The SSI signal indicates the current trend of each stock (performing well, or in a period of correction, or stopped out).

The SSI tells you one of five things:

Screen Shot 2017-08-08 at 6.51.59 AM

Screen Shot 2017-08-08 at 6.52.12 AM

Screen Shot 2017-08-08 at 6.52.22 AM

Akey component of the Stock State Indicator (SSI) system is momentum based on the latest 521 days of trading.  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 is an example of how SSIs work.  This example shows the Developed Market Pifolio that we track at Tradestops.com.

tradestops

Equal Weight Good Value Developed Market Pifolio.

At the time this example was copied, all the ETFs in the Developed Market Pifolio (above) currently had a green SSI.

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 Pifilios are invested in good value markets reduces long term risk.

Additional protection is added by using trailing stops based on the 521 day momentum of each stock in the Pifolio.

Take for example the graph below from our Tradestops account that shows the iShares MSCI United Kingdom ETF.  This ETF had a green SSI and a Volatility Index (VQ) of 13.26%.  This means the share can move 13.26% before there is a trend shift.

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

Pi purchased the share at$31.26 and in this example the share was $34.43 and rising.  Tradestop’s algorithms suggested that if the price drops to $31.69 its momentum would have stopped and it would have shifted into 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.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

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.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get 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 Platinum Dip 2018” 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 Dip Strategy with platinum.   The “Platinum Dip 2018” 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 “Platinum Dip 2018” 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.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

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.

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 out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

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 2017” 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 “Platinum 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.

Gary

Why There is Always Something We Do Not Know


The first rule of investing is that there is always risk.   There is always something we do not know.

Did the recent drop in the share price of Facebook shake your confidence?   About $120 billion of  wealth was wiped in just a day.  Facebook shares dropped  19 percent in one of the largest one-day losses of a company’s stock market value.

Is this the beginning of a market crash or is this an opportunity?

History strongly supports the fact that the economic expansion is mature and should slow.  Since 1854, the U.S. has had 34 expansions. The periods of growth have lasted from less than a year to ten years. The current expansion in its 10th year, is the second longest of all (The 1990s expansion was longer).

Is the Facebook crunch the trigger pulled that starts a crash?

Maybe we’ll know later today.  Maybe not.

A lot of our investing strategy is based on the idea that this expansion is doomed to end soon.  It probably will, but… there is always something we do not know.

Expansions do not have to end.

For example the Wall Street Journal article How an Economic boom Can Run Out the Clock” (1)  says: Australia is experiencing an amazing economic run—a 27-year expansion that survived a regional economic crisis in the 1990s, a global economic crisis in the 2000s, and a boom-boost cycle in its core commodity sector in the 2010s.

Australia paid down gross government debt from 32% of gross domestic product in 1994 to less than 10% in 2007, according to International Monetary Fund estimates, effectively socking away resources during good times, taking some steam out of an already strong economy and leaving the government with a cushion to support the economy on a rainy day.

When the global crisis hit in 2008, Australia cut taxes and increased spending, pumping 70 billion Australian dollars (US$52 billion) into its economy, equal to 1.6% of economic output, more than U.S. stimulus equal to 1.25% of output, according to Australian Treasury Department estimates.

The US expansion probably will end.

At least it will not be prudent planning, reduced spending and saving by the government that provides  strength during a downturn.

As the chart below from the ST. Louis Federal Reserve Bank (2) shows, during this expansion, the US has increased its debt to over 105% of GDP… ten times that of the debt that Australia had.

But there is always something we do not know.

An unknown future is not something to fear, but it should be acknowledged, respected and planned for.

The thought here is to not throw history out the window.  When it comes to investing, the ability to look back is a really valuable tool.

The good news is, no one knows, so we are all equal in that way.

Create your plans. Get started. Go for it. Take a shot, but always temper you expectations with this reality.  Our reflections from the past are useful.  Our plans, powerful.  Our actions always fruitful in some way.  But the fruit is not always what we expect because there is always something we do not know.

Gary

The Only 3 Reasons to Invest

garyheadshot

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.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

This is why the core Pi model portfolio (that forms the bulk of my own equity portfolio) consists of 19 shares and this position has not changed in over two years.  During these two years we have been steadily accumulating the same 19 shares and have not traded once.

The portfolio has done well in 2017, up 22.6%, better than the DJI Index.

motif

However one or even two year’s performance is not enough data to create a safe strategy.

The good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management and the mathematical trend analysis of Tradestops.com.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major 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.  He compares each major stock market’s history.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major 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.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His 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 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 stock in that country is an attractive investment, so you do not have to spend 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 use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, France, 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, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

iShares Country ETFs make it easy to that invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

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.

Pi uses math to reveal the best value markets then protects its positions using more math created by Richard Smith founder and CEO of Tradestops.com to track each share’s trend.

We use Smith’s  algorithms that calculate momentum of the good value markets.

dr richard smith

The Stock State Indicators at Tradestops.com act as a full life-cycle measure that indicates the health of each stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.

Kepppler’s analysis shows the value of markets.  The SSI signal indicates the current trend of each stock (performing well, or in a period of correction, or stopped out).

The SSI tells you one of five things:

Screen Shot 2017-08-08 at 6.51.59 AM

Screen Shot 2017-08-08 at 6.52.12 AM

Screen Shot 2017-08-08 at 6.52.22 AM

Akey component of the Stock State Indicator (SSI) system is momentum based on the latest 521 days of trading.  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 is an example of how SSIs work.  This example shows the Developed Market Pifolio that we track at Tradestops.com.

tradestops

Equal Weight Good Value Developed Market Pifolio.

At the time this example was copied, all the ETFs in the Developed Market Pifolio (above) currently had a green SSI.

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 Pifilios are invested in good value markets reduces long term risk.

Additional protection is added by using trailing stops based on the 521 day momentum of each stock in the Pifolio.

Take for example the graph below from our Tradestops account that shows the iShares MSCI United Kingdom ETF.  This ETF had a green SSI and a Volatility Index (VQ) of 13.26%.  This means the share can move 13.26% before there is a trend shift.

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

Pi purchased the share at$31.26 and in this example the share was $34.43 and rising.  Tradestop’s algorithms suggested that if the price drops to $31.69 its momentum would have stopped and it would have shifted into 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.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

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.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get 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 Platinum Dip 2018” 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 Dip Strategy with platinum.   The “Platinum Dip 2018” 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 “Platinum Dip 2018” 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.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

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.

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 out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

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 2017” 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 “Platinum 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.

Gary

(1) www.wsj.com: How an economic boom can run out the clock

(2) fred.stlouisfed.org: US Debt as % of GDP

The Special Value of Value Now


Value investing has not been been in favor over the past few years.

This is why I created a course on investing in value.  There is extra opportunity in being out-of-step with markets.

First let me explain that even though value investments have not been the flavor of the era, our portfolios of value equities have done well.  The image below shows my personal Motif.com account that I created so we could track it in our Purposeful Investing Course (Pi).

This value portfolio (blue line) kept up nicely with the S&P 500 (green line) since we began this course, (Until May 2018.  In a moment I’ll explain why this current lag creates an extra, third opportunity).

pifolio

This portfolio is composed approximately 70% of shares from the Keppler Asset Management Developed Market Top Value Strategy and 30% from the Keppler Asset Management Emerging Market Top Value Strategy.

The strategy is to invest in Country ETFs that track the MSCI Indexes of the 18 best value stock markets (out of 43 markets) that Keppler tracks.   Here is the portfolio right now.  These are my actual investments in this portfolio.

motif.com

motif.com

Keppler asset management

This portfolio currently has triple “extra potential” value.

The first extra value is simply in pricing.  Top Value developed markets have a price-to-book that is “less than half” the US market (1.50 versus 3.29 for the US).  The PE ratios and dividend yields are also much better for these top value markets.

keppler asset management

The emerging markets have even better price to book rations, P/E ratios and yields.

keppler asset Management

The second “extra potential” value comes from extra performance when there is a major market shift and value stocks become popular again.

Value-based equities in the United States and overseas have lagged behind growth equities since 2009.   However research by Bank of America/Merrill Lynch over a 90-year period, found that while growth stocks returned an average of 12.6% annually since 1926.  Value stocks returned 17% per year over the same time frame.

Screen Shot 2018-07-10 at 5.46.39 PM

When the markets shift back to value, value shares will gain an “extra potential” spurt.

The third “extra potential” is based on currencies shifts.  The recent lag of our portfolio (versus the S&P 500) since May 2018  is due to the sudden rise of the US dollar.   This www.finance.yahoo chart,  “euro versus the dollar” shows how the euro weakened beginning in May 2018.

www.fincnae.yahoo.com

The Chinese yuan and other currencies have suffered downturns versus the greenback as well.

The factors above create a triple win proposition.

There are three other benefits in this strategy.

#1: Investing this way saves time.  Investing in country ETFs is a simple, easy fast way to invest.

#2: This type of portfolio saves on trading and management fees.    The ETFs have low fees.  Over the past 2.5 years our portfolio has had only four trades.

#3: There is enormous diversification in this portfolio.  A share in a country ETF represents an investment into dozens or hundreds of shares in the target country of the ETF.

During this era when value is unpopular, our Pi Top Value Portfolio has performed well.   Right now value investments have a special place to protect our savings and help them grow.

Gary

The Only 3 Reasons to Invest

garyheadshot

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.

We should not invest for fun, excitement or to get rich quick, or in a panic due to market corrections.

This is why the core Pi model portfolio (that forms the bulk of my own equity portfolio) consists of 19 shares and this position has not changed in over two years.  During these two years we have been steadily accumulating the same 19 shares and have not traded once.

The portfolio has done well in 2017, up 22.6%, better than the DJI Index.

motif

However one or even two year’s performance is not enough data to create a safe strategy.

The good value portfolio above is based entirely on good value financial information and mathematically based safety programs developed around models that date back 91 and 24 years.

The Pifolio is a theoretical portfolio of MSCI Country Benchmark Index ETFs that cover all the good value markets developed combining my 50 years of investing experience with study of the mathematical market value analysis of Keppler Asset Management and the mathematical trend analysis of Tradestops.com.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers, such as State Street Global Advisers, use his analysis to manage over $2.5 billion of funds.

The Pifolio analysis begins with Keppler who continually researches international major 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.  He compares each major stock market’s history.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael is a brilliant mathematician.  We have tracked his analysis for over 20 years.   He continually researches international major 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.  He compares each stock market’s history.  From this, he develops his Good Value Stock Market Strategy and rates each market as a Buy, Neutral or Sell market.  His 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 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 stock in that country is an attractive investment, so you do not have to spend 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 use.

70% is diversified into Keppler’s good value (BUY rated) developed markets: Australia, France, 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, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

iShares Country ETFs make it easy to that invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Australia (symbol EWA) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Australia Index which is composed mainly of large cap and small cap stocks traded primarily on the Australian Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Australia.

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.

Pi uses math to reveal the best value markets then protects its positions using more math created by Richard Smith founder and CEO of Tradestops.com to track each share’s trend.

We use Smith’s  algorithms that calculate momentum of the good value markets.

dr richard smith

The Stock State Indicators at Tradestops.com act as a full life-cycle measure that indicates the health of each stock. They are designed to tell you at a glance exactly where any stock stands relative to Dr. Smith’s proprietary algorithms.

Kepppler’s analysis shows the value of markets.  The SSI signal indicates the current trend of each stock (performing well, or in a period of correction, or stopped out).

The SSI tells you one of five things:

Screen Shot 2017-08-08 at 6.51.59 AM

Screen Shot 2017-08-08 at 6.52.12 AM

Screen Shot 2017-08-08 at 6.52.22 AM

Akey component of the Stock State Indicator (SSI) system is momentum based on the latest 521 days of trading.  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 is an example of how SSIs work.  This example shows the Developed Market Pifolio that we track at Tradestops.com.

tradestops

Equal Weight Good Value Developed Market Pifolio.

At the time this example was copied, all the ETFs in the Developed Market Pifolio (above) currently had a green SSI.

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 Pifilios are invested in good value markets reduces long term risk.

Additional protection is added by using trailing stops based on the 521 day momentum of each stock in the Pifolio.

Take for example the graph below from our Tradestops account that shows the iShares MSCI United Kingdom ETF.  This ETF had a green SSI and a Volatility Index (VQ) of 13.26%.  This means the share can move 13.26% before there is a trend shift.

tradestops

iShares MSCI United Kingdom ETF (Symbol EWU)

Pi purchased the share at$31.26 and in this example the share was $34.43 and rising.  Tradestop’s algorithms suggested that if the price drops to $31.69 its momentum would have stopped and it would have shifted into 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.

When the US stock market bull ends, know one knows for sure how long or how severe the correction will be.

When the bear arrives, what will happen to global and especially good value markets?

No  one knows the answer to this question.

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.

My fifty years of global investing experience helps take advantage of numerous long term cycles that are part of the universal math that affects all investments.

What you get 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 Platinum Dip 2018” 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 Dip Strategy with platinum.   The “Platinum Dip 2018” 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 “Platinum Dip 2018” 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.

In 2018 I celebrate my 52nd anniversary in the investing business and 50th year of writing about global investing.  Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades.  This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special seminar session looks at how to spot value from cycles.  Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

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.

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 out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Time is your friend when you use a good value strategy.  The longer you can hold onto a well balanced good value portfolio, the better the odds of outstanding success.

Learn how much leverage to use.  Leverage is like medicine, the key is dose.  The best ratio is normally 1.6 to 1.  We’ll sum up the strategy; how to leverage cheap, safe, quality stocks and for what period of time based on the times and each individual’s circumstances.

Learn to plan in a way so you never run out of money.  The seminar also has a session on the importance of having and sticking to a plan.  See how success is dependent on conviction, wherewithal, and skill to operate with leverage and significant risk.  Learn a three point strategy based on my 50 years of investing experience combined with wisdom gained from some of the world’s best investment managers and economic mathematical scientists.

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 2017” 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 “Platinum 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.

Gary

Value and Profits in the Mid-Cap


Here’s an investing truth we should not ignore…  “The best times in the economic cycles, are the worst time to invest in shares.”

And right now, the economic cycle is very good.

Let’s review this cycle, the risk and opportunities it creates now.

economic cycles

The current cycle is very mature.  Investors should watch out for:

  • Rising Inflation
  • Rising Bond Yields
  • Falling Unemployment
  • Expanding PE Multiples
  • Rising Short Interest Rates

These factors are leading indicators and signs of  a recession ahead.

How soon will we see a recession?

No one knows, but last week’s Wall Street Journal article “Fed Officials Debate Signal From Flattening Yield Curve: Is This Time Different?”(1)  gave us a warning that rising short interest rates are signaling a rising economic risk.

The article says: The gap between short-and longer-term Treasury yields has fallen to levels last seen in 2007.

We all remember what happened in 2007!

The article says: Atlanta Fed President Raphael Bostic and some of his colleagues are laying the groundwork to slow down the Federal Reserve’s interest-rate increases if they foresee a bond-market development that has traditionally been a harbinger of recession.

At issue is the narrowing spread between short- and longer-term Treasury yields, a difference known as the yield curve.

The gap typically shrinks when the Fed raises short-term rates. But when short-term Treasury yields rise higher than longer-term yields, a so-called inverted yield curve, a recession has almost always followed within a year or two.

Mr. Bostic’s concerns are taking on new urgency because the spread, measured by comparing yields on two- and 10-year Treasurys, has fallen to levels last seen in 2007. It dropped below 0.3 percentage point last week, down from 0.5 percentage point three months ago and 1 percentage point one year earlier.

Screen Shot 2018-07-10 at 5.36.47 PM

“Any inversion of any sort is a surefire sign of a recession,” said Mr. Bostic in an interview last month. “I want us to avoid being in a situation where” the curve inverts.

The debate over how much importance to place on an inverted yield curve could grow more fraught in the months ahead if U.S. economic growth remains strong and global growth falters. That could spur a flight to safe assets such as long-term Treasurys, pushing long-term yields below short-term yields.

A recent Purposeful Investing lesson shared an idea from Eric Roseman, CEO of ENR Asset Management, about an  equity opportunity that makes sense in this part of the cycle.  (Bolds are mine).

Eric wrote: Hunting for Mid-Cap Value in Late Stage Rally

Since last spring, a major market shift has occurred: Investors have dumped foreign assets in favor of domestic U.S. stocks and to a lesser extent, Treasury bonds as the U.S. dollar surges, emerging markets come undone and a full-scale global trade war heads into unchartered territory. Most large-cap American multinationals aren’t the ideal destination for investors as the dollar strengthens and tariffs are slapped on their goods sold abroad. But for domestic enterprises, like small-cap and mid-cap companies, sales are largely insulated from the travails of a global trade spat.

Investors have already picked over the small-cap space as the S&P 600 Small-Cap Index and the Russell 2000 Index continue to hit new all-time highs while the S&P 500 Index remains about 5% below its January 26 high.

Eric then explains that value continues to lag in the mid-cap sector of this bull market. This creates opportunity as we approach the latter innings of this 10-year economic expansion.

Eric recommends the Vanguard Mid Cap Value ETF  (2) that tracks the performance of the CRSP US Mid Cap Value Index.   This is a a broadly diversified index of value stocks of mid-size U.S. companies. The advisor attempts to replicate the target index by holding each stock in the index in about the same proportion as its weighting in the index.

The chart above of the Vanguard Mid Cap Value ETF (dark blue) shows how this fund has fallen far behind the performance NASDAQ Index (light blue) in the past five years.

This ETF represents and easy way to continue seeking value in the over priced US equity market at these late stages in the economic cycle.

Gary

The 70 Year Iron Correlation

Correlations can shine light on reality.   Correlations can help us spot realities that most of the world do not see.  Reality consists of innumerable cycles.  If we can understand a cycle, when it starts and ends, then we can better understand what’s next!

iron lung

The Dreaded Iron Lung

Are there clues in a cycle that correlates the Iron Curtain and the Iron Lung?  If so, what can this correlation help us see?

Every morning I rise around 5 a.m., meditate in the awakening of bird songs and open my mind and heart to correlations.  The connection that came to mind yesterday morning puzzles me. Will you help me think through whether or not I have spotted a clue to what the future might hold?

Russia invaded the Crimean Peninsula this year.   Though the Russians now appear to have backed off,  I think they got the main objective they wanted.

If you are a boomer who grew up as I did during the Cold War under the threat of nuclear devastation, you might still be thinking “Oh, no, not again”!

Polio is a global health emergency again.  Here is an excerpt from last week’s New York Times article “Polio’s Return After Near Eradication Prompts a Global Health Warning” by Donald G.  Mcneil Jr.

Alarmed by the spread of polio to several fragile countries, the World Health Organization declared a global health emergency on Monday for only the second time since regulations permitting it to do so were adopted in 2007.

Just two years ago — after a 25-year campaign that vaccinated billions of children — the paralyzing virus was near eradication; now health officials say that goal could evaporate if swift action is not taken.

Pakistan, Syria and Cameroon have recently allowed the virus to spread — to Afghanistan, Iraq and Equatorial Guinea, respectively — and should take extraordinary measures to stop it, the health organization said.

Boomers who grew up with the gloom and fear of polio and the iron monster lung may be thinking, “Oh, no, not again”.

What is the correlation between Russia in the Ukraine and Polio?

Philosophical author Carolyn Myss (2) writes about national consciousness and how 1929 and the Great Depression left America, “financially crippled”.  She writes:  Crippled – that’s how Americans described themselves in the 1930’s.  In keeping with the psychic nature of epidemics, and epidemics tend to emerge out of a traumatized social event or catastrophe, the polio epidemic struck in the 1930’s, crippling children around the country.  Indeed, America was now completely crippled, from its tribal chakra through to its spiritual crown.

A president was elected during the 1930’s who also a victim of polio – FDR. He was exactly what the collective soul of America needed, a leader who knew what they were going through in terms of being psychically crippled, and yet he was a man of wisdom and strength.

Then she explains how after World War II America was alive again, thriving and “back on its feet again”.  By the 1950’s, Jonah Salk discovered the vaccine for polio.  America was more than ready to not only shed its epidemic consciousness but make an evolutionary leap in consciousness to the “Self and Wealth” generation.

Here is why I need your help!

As I meditated on the Ukraine and polio and the thoughts of Carolyn Myss, I asked, what is this correlation?

Later I this revelation occurred.. Russia began the invasion of the Ukraine in 1921 and formed “The Ukrainian Soviet Socialist Republic in 1922.  The Soviet Republic broke up in 1991.

Franklin D. Roosevelt’s paralytic illness began in 1921 after exercising heavily during a vacation in Canada.

In 1988, the World Health Organization, together with Rotary International, UNICEF, and the U.S. Centers for Disease Control and Prevention passed the Global Polio Eradication Initiative, with the goal of eradicating polio by the year 2000. The Initiative was inspired by Rotary International’s 1985 pledge to raise $120 million toward immunising all of the world’s children against the disease.  The last case of wild poliovirus poliomyelitis in the Americas was reported in Peru, August 1991.

What do these correlations mean?

Roosevelt’s Polio started in America 1921.  Russia began an invasion into the Ukraine in 1921.

The Soviet Ukraine ends in 1991.  Polio is eradicated in the Americas in 1991.

The  Soviets begin an invasion into the Ukraine in 2014.  The WHO (World Health Organization)  declared a global polio health emergency in 2014.

I am intrigued but stumped and would like to brainstorm with you and share your input, thoughts and opinions.  Is this a correlation or coincidence?   If there is a correlation, what might it mean?

The implications and useful ideas on “What’s next?” could be profound, helpful and meaningful from the extrapolations we gain from understanding the relationships of these correlations!  At the least, thinking about this a bit might stimulate our thinking about the future, what Russia and viruses might bring, when and why.

Gary

Correlations help us better understand the National Psyche which can bring fulfillment and wealth.  Learn seven steps to unleashing the power in the National Psyche below.

(1) Polio’s Return

(2) Carolyn Myss on the Polio President

(3) Formation of Ukrainian Soviet Socialist Republic

(4)  Roosevelt’s Polio

(5) Polio Eradication in the Americas

(1) www.wsj.com: Fed officials debate signal from flattening yield curve

(2) Finance.yahoo.com: Vanguard Mid Cap Value ETF