Tag Archive | "Value investing"

Have Two Sources of Income


We cannot be sure what equity investments will do so we need a second source of income to make sure we have time to complete our equity investing plan.

Recent messages at this site have warned about the dangers of sideways motion and showed how this type of action can last for many years, even decades.

An article in the New York Times “Warren Buffett’s Optimistic? Pessimistic? No, Realistic” (1) confirms these facts.

The article says about Buffett:  He was careful to say the markets would improve in the long term — though his time frame for certainty was decades, not months or not even necessarily years from now. About the current climate, he said, “You can bet on America, but you kind of have to be careful about how you bet.” He added “simply because markets can do anything.”

He talked about the possibility of a second wave of coronavirus infections. He acknowledged that the world might profoundly change for years to come. And he spent a notable portion of the meeting detailing the economy’s performance since 1789, with a particular focus on the years between 1929 and 1951, a period in which the stock market took 22 years to get back to its highs.

More than his words, he spoke with his wallet. He usually relishes a down stock market to take advantage of lower prices. Not this time. He hadn’t made any purchases recently; he didn’t buy up stocks when they had fallen last month during what felt like a mini-panic: “We have not done anything, because we don’t see anything that attractive to do.”

This time, he is husbanding his capital. “Our position will be to stay a Fort Knox,” he said.

“I don’t believe anyone knows what the market is going to do tomorrow, next week, next month, next year.”

This chart below can help us understand why Buffett focused on the 1929 to 1951 period.  It shows the performance of the Dow Jones Industrial Average for over 100 years (since Feb.1919).  It’s interactive and I recommend looking it over.  Click here. Macroeconomics.net

chart

Let’s look at what happened to the Dow Jones Industrial Average at various points in each bear market over the past 100 years.

In July 1929 the DJIA rose to an all time high of 5,198.  Then it collapsed to 814 by June 1932.  The index did not regain that previous high number again until December 1958.

That full recovery took 29 years for investors who invested at the Dow’s all time high.

If an investor entered a Dow Jones Industrial Index ETF (for example only – they did not exist in that era) after the index had fallen 30% (it was then 3,648) in July 1930, it still took 24 years for the index to recover to 3,733 in November 1954, or about 24 years.

However if an investor invested in the index after it fell 40% to 3,119 in February 1931, he or she only waited a bit over five years to November 1936 when it reached 3,324.

However… and note the trend as it repeats in each recovery, after achieving a big recovery, the Dow dropped back and stayed below its all time high until August 1954.

Fast forward to the next bear that began in 1966. The DJIA reached a high of 7,884 in December 1966.

Investors who invested right at that top, did not see a recovery until August 1995 when the Dow reached 7,801, in about 30 years.

Investors who entered the market 30% below the 1965 high (5,519 in Sept 1969) saw it recover by March 1973 but then slipped until June 1987 and then immediately slipped again to September 1991.  The full convincing recovery took about 26 years.

Investors however who waited until the DJIA fell 40% to 4,731 in December 1973 saw a recovery in January 1987, but again the index immediately slipped and did not reach that level again until August 1988, about 15 years.

In other words it took a full 15 years for a full convincing recovery.

The next DJIA high came in December 1999 at 17,671.

When this bear began, the index reached a 30% loss (12,370) by August 2002.

Those who jumped in then saw a quick recovery by June 2003.

The DJIA then rose into the 17,000 again, but fell quickly yet an the 30% loss range was not reached again until October 2010.

Those waited for a 40% (10,603) fall missed the recovery completely. The Dow’s lowest point was 11,220 before it began the bull that just ended and rose to 28,738

If the DJIA falls 30% from this latest all time high it will reach 20,107.

A 35% drop will bring the index to 18,680. A 40% drop will bring it to 17,243.

This review provides three clues.

It suggests that the time from an all time high to the next can take decades, but the periods between them are becoming shorter.

There are also suggestions that investments in the Dow at 30% below the top have a mini crash after their first recovery.

In the 2008 bear and bull waves, the Dow Jones Industrial Average never reached a 40% drop.

Investors who want to time markets and get in right at the bottom, might have a pretty good wait if history repeats.  Those who increase their portfolios after a 30% drop can also have a considerable wait as well, but if they put off much longer they’ll miss some of the rebound.

These facts and the uncertainty of what’s ahead means we should have more than one way to gain profit.

This is why we created the International Club over 30 years ago, to help club members earn income from an at home business plus protect their savings and increase its value with value equity investing.

When you join the club you get seven workshops and courses on how to earn everywhere with home micro businesses.  We call this our “Live Well and Free Anywhere Program”.   The program contains a series of courses and reports that show ways to earn income from your home and be free. These courses and reports are:

  • The course “Self Fulfilled – How to Write to Self Publish”
  • The course “Event-Full – How to Earn Conducting Seminars and Tours”
  • The course “International Business Made EZ”
  • Video Workshop by our webmaster David Cross
  • The entire weekend “Writer’s Camp” in MP3
  • The report “How to Raise Money Abroad”
  • Report and MP3 Workshop “How to Gain Added Success With Relaxed Concentration”

The fee for this package is normally $299.

As a club member you get these seven courses FREE.

Club members also receive a second way to profit, the $299 Purposeful Investing Course (PI) FREE.

The Purposeful Investing Course is a complete and continual study of what to do about the movement of international major and emerging stock markets.

The course teaches how to form  a Good Value Stock Market Strategy.  The course teaches an analysis that 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 costs are low and this type of ETF is one of the hardest for institutions to cheat.  Expense ratios for most ETFs are lower than those of the average mutual fund.  Little knowledge, time, management or guesswork are required.  The investments create a diversified portfolio of good value indices in the best value stock markets around the world.

Pi opens insights to numerous long term cycles that most investors miss because they have not been investing long enough to see them.

The Pi subscription is normally $299 per annum but as a club member you receive Pi at no charge and save an additional $299.

When you join the International Club you receive both courses, plus much more:

#1: The seven part $299 “Live Well and Free Anywhere Program including our Self Publishing Course”.  Free.

#2: The $299 Purposeful Investing Course (Pi).   Free.

#3: The $29.95 report “Three Currency Patterns For 50% Profits or More”.  Free.

#4: The $39.99 report “Silver Dip 2019”.  Free

#5: Three Natural Health Reports at $19.99.   All three free.

#6: The $39.99 “Live Anywhere – Earn Everywhere” report.  Free.

#7: Plus updates and other report I release in the year ahead.

These reports, courses and programs would cost $767.73 if purchased individually.

The International Club membership is $349 so the 2020 membership normally saves $418.78.

However due to the COVID-19 Pandemic we have cut membership in half and are currently accepting the discounted membership of $174.50 today.  You save $598.23 instead!

Then because this global recovery is going to take years, we’ll maintain your membership at just $99 a year rather than $349.  Your membership will be auto renewed in 2021 at $99, though you can cancel membership at any time.

Save $598.23.  Join the International Club for just $174.5o.   Receive all the above online now, plus all reports, course updates and Pi lessons through the rest of 2020 and into of 2021  at no additional fee.

Don’t miss this opportunity.  Sign up with this special offer.

Click here to become a member at the discounted rate of $174.50

Gary

(1) www.nytimes.com/2020/05/03/business/dealbook/warren-buffett-berkshire-hathaway.html?campaign_id=2&emc=edit_th_200504&instance_id=18184&nl=todaysheadlines&regi_id=48317279&segment_id=26549&user_id=208b2cbe62eb7b536babab791d172bc7

Investment Sea Change


Sideways motion kills the average investor, leading them to buy at the top, sell at the bottom, again and again.   The greatest protection is value.

Now can be a good time to invest, but for the long term.  Expect a lot of ups and downs along the way.  The recovery could be for the long haul so sticking to the best values will be key.

We can see what I mean from looking at the chart below at macrotrends.net which shows the S&P 500 Index at its bottom of the 2008 crash.

charts

The S&P 500 took about five years from 2008 to 2013 to return to its previous high.

Even after the first big drop from over 15,000 down into the 12,000 range in September, 2008, the S&P did not reach the 12,000 range again until January of 2011.  Prices rose and fell, rose and fell.

We are seeing this pattern again. March was one of the worst months for the US market ever.  April was one of the best ever.  Then the market began to slide away again in May.

Expect volatility in all equity markets, but of the 46 markets we track, many of these markets are at their best prices in decades.

Last week we sent our Purposeful Investing Course subscribers the 52 page Keppler Asset Management Quarterly Emerging-Markets Analysis for this spring and included this chart.

keppler

The price-to-book of the Top Value Emerging Markets Index is just 1.07 and the average dividend yield 4.79%.

The price-to-book of the top value developed markets is even lower, 1.00 with a higher dividend yield of 5.23%.

These are historic low prices that suggest extreme good value for investors who can steadily accumulate through market volatility that may last for several years.

How much the pandemic and its interference in the global economy will change markets is still unknown.

How much volatility we will see in the next year or two is also unknown, but what we do know is that top value the top value  stock markets globally now offer incredible value.  Keppler Asset Management’s value analysis projects that a $10,000 investment portfolio, equally weighted, in top value equity markets (based on his analysis) will be worth between $13,394 and $20,462 in four years.

Look for good value equity investments for the long term now, but base your investments on your liquidity needs and do not hurry.  Plenty of bargains will abound for quite some time.

I cut my investing teeth on bear markets, when I started investing, writing and talking about stock investments in May 1968.  At that time the Dow Jones Industrial Average was 6721.

The Dow dropped to 2158 by June 1982, so I learned about the dark side of the market from the get-go.

I was right there in December 1999 as well when the DJIA was 17625 and dropped to 9229 over the next ten years till January 2009.

Then it began this last meteoric rise up through December 2019 and hit 28262. Now in just three months it has fallen to 23,700 range as of yesterday.

In the chart below, I have marked the high and low points I have lived through in the historical chart below to show that we could expect a low of 15,000.  This means that a correction could have plenty of room to go.

This is not a prediction… just a possibility we should plan for.   Always ask yourself… “when will I have to liquidate?”

If your liquidity needs are near term, you do not want to liquidate when the Dow is at 15,000!

Screen Shot 2020-03-10 at 7.00.14 AM

The key to maintaining discipline is to create a logical math based plan to be able to hold on through a downturn.  Then stick to the plan!

Gary

I would like to help you learn an easy way to invest in the best value investment during this special time of opportunity.  See how to become an International Club member, save $598.23 and obtain a 130 page report on how to invest in good value shares now.

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

Treat the Terror – Not the Problem


Is the coronavirus really a risk?

There’s many things we can be terrified about.  But we should not be.  See how to stop the fear below.

coronavirus

Our real fear should be of mania created by the news.

Take terrorism as an example.

Terrorists really cannot defeat us.  Yet, look at how much the Western world has distorted its way of life over terrorism mania.

I do not claim in any way to be a military strategist but do try to follow the thinking of those who are good at strategic global thought such as… the late Lee Kwan Yew.  See his perspective on terrorism and the press.

I worked and spent a lot of time in Singapore during the late 1960s and early 1970s and recall vividly the way Singapore used to be.  Lee Kwan Yew had a lot to do with Singapore emerging from a form of colonialism, that included a lot of poverty, to one of the wealthiest societies in the world.

Lee Kwan Yew outlined the risks of relying on local press in an with UPI’s Arnaud de Borchgrave, when asked the question “why don’t democracies produce great statesmen anymore?”  Here’s an excerpt.  Bolds are mine.

A: I don’t know how long this phase will last, mass media domination, owned by a group of media barons who want constant change for their balance sheets.   But it’s also the enormous pressure of media competition and the giant appetite for advertising revenue, what television program gets what viewership, or eyeballs, or clicks online. Never mind the consequences. If you get the advertising, you win.

Even if we can’t win, we mustn’t lose or tire. We cannot allow them to believe they have a winning strategy, and that more suicide bombers and WMD will advance their cause and give them a chance to take over. 

But let me repeat, they cannot conquer you.  They can create trouble.  So micro actors can cause a lot of trouble for your friends, but they can’t eradicate them.

How to treat the terror.  Mania in stock markets can ruin our investing if we let it.  Be smart rather than fearful.  Get, and act on, math based facts…  not the scary headlines in the news. 

It’s a fact.  Terrorists cannot defeat us.  Plus the math suggests that the coronavirus is not as serious as the press is making it.

Here are some math based facts about COVID-19 that the MD, I have used for decades, sent me.

medscape

Medscape says, bolds are mine (1): The mortality rate associated with COVID-19 may be “considerably less than 1%,” instead of the 2% reported by some groups, write Anthony Fauci, MD, director of the National Institute of Allergy and Infectious Diseases, and colleagues in an editorial published February 28 in the New England Journal of Medicine.

The editorial appeared alongside a report by Wei-jie Guan, PhD, and colleagues, that characterized 1099 patients with laboratory-confirmed COVID-19 from 552 hospitals in China through January 29, 2020. Guan is with the Guangzhou Institute of Respiratory Health, First Affiliated Hospital of Guangzhou Medical University in China,

“Guan et al report mortality of 1.4% among 1099 patients with laboratory-confirmed Covid-19; these patients had a wide spectrum of disease severity. If one assumes that the number of asymptomatic or minimally symptomatic cases is several times as high as the number of reported cases, the case fatality rate may be considerably less than 1%,” Fauci and colleagues write.

“This suggests that the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively.”

Even a 1% mortality is terrible.  Merri and I are aged 73 and 77, so we have noted the added risk, but as an actual killing illness for all of society, COVID-19 is a minor league player compared to SARS or MERS.

Look at the facts.

Fact #1: We all know that stock markets rise and fall.  This is the nature of all markets.

Fact #2: The US stock market was far too expensive.

Fact #3: The time was past due for stock market prices to correct.

Fact #4: Periods of high performance are always followed by periods of low performance and vice versa.

Pay attention to the vice versa.

We know that there will be a rapid upwards shift in the stock market after the panic subsides.

The only question is when and this is what we should be planning for.

The best time to sell shares is when investors are buying and the best time to invest is when market mania sells.

Now is the time to create a plan of extra investing in the stock market in the era of great opportunity ahead.

Yesterday we sent our Purposeful Investing Course (Pi) subscribers a full analysis of 100 years of stock market crashes, in 1929, 1966, 1999 and 2010) so they can learn what to expect and know when to take advantage of the enormous opportunity building up now.  Here’s an excerpt from the study we sent.

Fast forward to the next bear that began in 1966. The DJIA reached a high of 7,884 in December 1966.

Investors who invested right at that top, did not see a recovery until August 1995 when the Dow reached 7,801, in about 30 years.

Investors who entered the market 30% below the 1965 high (5,519 in Sept 1969) saw it recover by March 1973 but then slipped until June 1987 and then immediately slipped again to September 1991.  The full convincing recovery took about 26 years.

Investors however who waited until the DJIA fell 40% to 4,731 in December 1973 saw a recovery in January 1987, but again the index immediately slipped and did not reach that level again until August 1988, about 15 years.

In other words it took a full 15 years for a full convincing recovery.

I am planning my entry into value stock markets now so when the magic point is reached, I’ll automatically be investing while other investors flee.

This strategy has always created exceptionally good deals for me and the subscribers who listen to math and logic.

See below how to subscribe to Pi and get the full analysis of 100 years of stock market crashes.

Have a good weekend.    In the midst of the current madness, I think that Rudyard Kipling’s poem, “How to be a Man”(2)  is worth a read.  Here is the first part.

“If you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;

“If you can wait and not be tired by waiting,
Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise:

“If you can dream – and not make dreams your master;
If you can think – and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same:

“If you can fill the unforgiving minute
With sixty seconds’ worth of distance run –
Yours is the Earth and everything that’s in it,
And – which is more – you’ll be a Man my son!

Gary

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1) www.medscape.com/viewarticle/926089?src=WNL_trdalrt_RM_200307_MSCPEDIT&uac=66459CZ&impID=2302922&faf=1

(2) fs.blog/2012/12/how-to-be-a-man-rudyard-kipling/

 

Benefits of US Small Cap Shares


Last week we sent our Purposeful Investing Course subscribers the February 2020 ENR Extra Advisory Bulletin.  The entire bulletin is only available to ENR’s largest investors and Pi subscribers.

ENR is one of the very few SEC registered investment advisors that can help US investors bank and hold assets with non US banks. (1)

This month’s bulletin shows how value investments continue to offer extra potential… especially small cap value shares.

The bulletin said: Value equities in the United States remain far less expensive than growth stocks.

We’re still buying the Vanguard Small-Cap Value ETF (NYSE-VBR). Levying just 0.07% in annual fees,
VBR has declined 3.5% from its high and should be accumulated at a time when the American
domestic economy is improving. The Fund trades at 16.2 times trailing earnings or half of the
S&P 500 Index with a much stronger earnings growth rate in 2020. Investors pay a reasonable
1.7 times price-to-book.

enr asset mamangement

The US markets are not in the good value markets in the Pifolio.  Value investors who want to invest in US value equities should consider the Vanguard Small-Cap Value ETF (NYSE-VBR).

Gary

Subscribe to the Purposeful Investing Course and read the entire  ENR Advisory Extra Bulletin  for February 2020.

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1) http://www.enrassetmanagement.com/

Gaining the Value Premium


Choosing value over growth is a powerful math based way to get the best stocks while maintaining maxim safety. 

Last week I sent Purposeful Investing Course subscribers the 79 page Keppler Asset Management’s Good Value Developed Markets Analysis  for the winter of 2020. This analysis showed a “Value Premium” opportunity.

The analysis said:  Current annual earnings growth of the MSCI World Value Index of 3.5 % beats the earnings growth of the MSCI World Growth Index of -2.5 % by 6.0 percentage points.

This does not make sense considering that the MSCI World Growth Index now sells at a premium of 143 % to the MSCI World Value Index based on key fundamentals, e.g. book value, cash flow, earnings and dividends.

The market must adjust to these facts sooner rather than later.

Let’s shed more light on the Value Premium.  A Fidelity article “Comparing the results of value and growth stock market indexes explains the Value premium” and shows that value shares have a significant advantage over growth shares in the long term.

Fidelity shows that over the period 1990–2015, large-cap U.S. value stocks had a total dollar premium of over $9,200 more during this 26-year period (assuming a starting investment of $10,000). In other words investors who put $10,000 into value shares earnd $9,200 more than investors who put $10,000 in growth stocks at and for the same time.

For Midcap value shares the gap was even more.  The value premium was over $22,000 and small-cap value shares turned $10,000 into $124,669, or $44,791 more than the ending balance in small-cap growth shares over the 26 years.

The chart from Credit Suisse and the London Business School shows similar results from the years 1926 up to 2012.

Screen Shot 2020-02-01 at 7.42.24 AM

Then after the big stock market correction in the early 2010s, this chart from valuewalk.com (1) shows that growth shares surged ahead of value shares.

Screen Shot 2020-02-01 at 7.44.21 AM

This has created a huge distortion.   Keppler Asset Management (KAM) did the math on this distortion in the “Winter Developed Market Value Analysis” and said:

While the average developed market—as measured by the KAM Equally Weighted World Index—is now undervalued by 27% vs. the cap-weighted MSCI World Index based on traditional valuation measures, the Top Value Markets are now undervalued by 37% compared to the MSCI World (Standard) Index, by 50% compared to the MSCI USA Index and by a whopping 62% compared to the MSCI World Growth Index.

Value stocks worldwide have lagged growth stocks since the onset of the bull market ten years ago.  This creates a distortion.

I have repeatedly mentioned the difference in total returns over the last five years showing how value investments have lagged by a wide margin.

This means that currently, international value stocks remain among the cheapest in the world.

One ETF  that provides a way to easily invest globally in value shares is the iShares Edge MSCI Intl Value Factor ETF  (symbol IVLU) that tracks the investment results of an index composed of international developed large- and mid-capitalization stocks with value characteristics and relatively lower valuations.

Learn an even better way to invest in global value with our Purposeful Investing Course below.

Gary

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1) www.fidelity.com/learning-center/trading-investing/trading/value-investing-vs-growth-investing

(2) www.valuewalk.com/2018/02/performance-differential-growth-stocks-value-stocks-now-greater-time-history/

 

Where Stocks Will Be in 2023.


Here’s a powerful math based forecast for global stock markets.

I just sent Pi subscribers the 79 page Keppler Asset Management’s Good Value Developed Markets Analysis  for the winter of 2020.

Part of this analysis includes Keppler’s forecasts for global stock markets over the next four years.

I give this chart a great deal of attention as it’s based entirely on mathematics, not conjecture, guesswork or opinion.

You can see the entire real-time forecasting history for the KAM Equally Weighted World Index, starting at the end of 1993 in the forecast chart below.

Keppler’s numbers are based on relationships between price and value over the previous fifteen years moving forward in monthly increments and thus adjusting steadily to an ever-changing norm.

The chart includes two remarkable episodes: The five-year period (1997-2001) during which the KAM Equally Weighted World Index stayed above the upper forecast band, and the period starting in October 2008 when it fell below the lower forecast band, where it stayed through April 2014 (5 years and 7 months).

Since then, the Index (green line) fell slightly below the lower forecast band again twice in the first half of 2016. In the past, index levels below or slightly above the lower forecast band subsequently turned out to be attractive entry points for long-term investors.

keppler

I treat times when the green line drops below the lower grey line as an especially good time to invest in global equities.

Keppler’s implicit three-to-five-year projection places the KAM Equally Weighted World Index at 16,043 in local currencies (LC) by December 31, 2023, up from its current level of LC 13,114.

This corresponds to a compound annual total return estimate of 5.2 % in local currencies—down from 6.2 % last September. The upper-band estimate of LC 19,251 by December 31, 2023 implies a compound annual total return of 10.1 % (down 1.1 percentage points from three months ago),  while the lower-band estimate of LC 12,834 indicates a compound annual total return of minus 0.5 % (down from +0.5 % last quarter).

This forecast suggests that stock market prices globally are slowing down and over the next three years investors who are diversified in share around the world will earn between a 10.1% to a slight loss.

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 my Purposeful investing course (Pi) is based around 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 three point good value strategy that increases their wealth again and again.

What are the three tactics of this strategy?

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 limited 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 years of global 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 Pi Model Portfolio.  There are no secrets about this portfolio except that it is based entirely on good math and uses time to take advantage of value.

The value analysis is used to create a portfolio of MSCI Country Benchmark Index ETFs that cover  stock markets that are undervalued.  I have combined my 50 years of investing experience with the study of the mathematical market value analysis of Michael Keppler, CEO of Keppler Asset Management.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers use his analysis to manage over $2.5 billion of funds.  However because Keppler’s roots are in Germany (though he lives and operates from New York) and most of his funds registered for the European Union, Americans cannot normally access his data.

I was lucky to have crossed paths with Michael about 25 years ago, so I am one of the few Americans who receive this data and you will not find his information readily available in the US.

In a moment you’ll see how to remedy this fact.

The Pifolio analysis begins with Keppler’s research that continually monitors 46 stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  Then Keppler takes market’s history into account.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Listen to Michael Keppler explain his philosophy for 6 minutes and 43 seconds here.

Michael’s analysis is rational, mathematical and does not cause worry about short term ups and downs.  Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each good value (BUY) market.

This is an easy, simple and effective approach to zeroing in on value because little time, management and guesswork is required.  You are investing in a diversified portfolio of good value indices.

A BUY rating for an index does NOT imply that any one stock in that country is an attractive investment.  This eliminates the need for hours of research aimed at picking specific shares.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.  Investing in the index is like investing in all the shares in the index.  You save time because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2020.

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 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.

How you can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (PI).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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” 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” 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” about a leveraged speculation that can increase the returns in a safe portfolio by as much as eight times.

You also learn from the online 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.

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” and “Three Currency Patterns For 50% Profits or More” reports, and value investment seminar, plus begin receiving regular Pifolio update lessons throughout the year.

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

Your subscription will be charged $99 a year from now, but you can cancel at any time.

Gary

Do Everything – Doing Nothing


A little over four years ago, I took a challenge to start the most boring investment course… perhaps in the world.

Borrowing, but safe and profitable.

The course is called the Purposeful Investing Course.  We call it Pi and it has proven what we thought…. boring, but good if safety and profit mean more to you than excitement.   Pi is a course about the value of investing in good value stock markets and then just do nothing.

A friend in the publishing business said, “Gary you are crazy.  Investors want action.”  I realized he was right but have stuck to my guns because this is how  I invest and that’s what I always have written about for over 50 years.

I write about what I am doing.

This type of investing does have some advocates who invest big money.

Warren Buffet of course is the ultimate value investor.

value investing

Steve Edmundson, the investment chief for the Nevada Public Employees’ Retirement System

A Wall Street Journal article “What does Nevada’s 35 billion fund manager do all day nothing?” (1) reviews the activity of Steve Edmundson, the investment chief for the Nevada Public Employees’ Retirement System who also invests billions doing nothing.

Edmundson is my kind of guy, really low key.  He manages tens of billions but works alone and often eats leftovers at his desk for lunch.

Yet his investments regularly earn more than pension funds that have hundreds of staff.

The article says:  He generally doesn’t work outside 8 am to 5 pm hours.  His daily trading strategy: Do as little as possible, usually nothing.  The Nevada system’s stocks and bonds are all in low-cost funds that mimic indexes.  Mr. Edmundson may make one change to the portfolio a year.

News doesn’t matter much.  Will the 2016 elections affect his portfolio?  “No.”  Oil prices?  “No.”  He follows Fed Chairwoman Janet Yellen, but “there’s a difference between watching and acting.”  Mr. Edmundson, 44 years old, has until recently been a pension-world outlier.  Other state retirement systems turned to complicated investments and costly money managers to try to outperform markets with algorithms and smarts.

His strategy is to keep costs low and not try beating markets, he says.  “We’re bare bones.”  From his one-story office building in Carson City, Mr. Edmundson commands funds whose returns over one-year, three-year, five-year and 10-year periods ending June 30 bested the nation’s largest public pension, the California Public Employees’ Retirement System, or Calpers, and deeply-staffed plans of many other states.

“Doing nothing is harder than it looks,” says Ken Lambert, Mr. Edmundson’s predecessor an only outside investment-strategy consultant.  Harder, he says, because of the restraint needed to practice inaction.

In fact “Do nothing value investing” has become a huge trend.   Another Wall Street Journal article:  “Making Billions With One Belief: The Markets Can’t Be Beat” (2) is about the mutual fund manager DFA.  They are rising quickly as one of the largest fund managers in the USA, moving from eighth largest to sixth largest last year.  Their strategy is also “do nothing”.  Well, they do something about nothing, but a lot of trading and market timing is not part of that something.

The article says:  Dimensional Fund Advisors LP, is drawing nearly $2 billion in net assets per month at a time when investors are fleeing many other firms.

DFA, whose founders and advisers include leading purveyors of efficient-market theory, is built on the bedrock belief that active management practiced by traditional stock pickers is futile, if not an absurdity.  DFA’s founders are pioneers of index funds.  But these men concluded long ago that investors who respected efficient markets could nevertheless achieve better returns than plain index funds deliver.

The Austin, Texas firm remains all but unknown to the general public, since its funds are available exclusively through financial advisers or to big institutions.  But the firm manages $445 billion and already holds at least 5% of the total shares outstanding of 545 U.S.-listed companies, it says.

As of Dec 31, 2019, Dimensional Fund Advisor had nearly $609 billion of assets under management. For the past three decades, the company is providing investment management strategies to its clients.

You and I cannot invest direct in DFA, but we can learn how to do something about nothing.

This is how I invest, slowly.  In 2019  I only made one addition and no liquidations in my Pi portfolio.  This has been typical, to do little for greater safety, higher returns and extra time for all in life I consider more important than messing around with short term stock market moves.

You can learn more about Pi below.  Even if you never join our course to learn about “Do nothing value investing,”  get on the band wagon somehow.  Again and again investors are proving that less is more when it comes to investing in value shares.

Gary

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1) www.wsj.com/articles/what-does-nevadas-35-billion-fund-manager-do-all-day-nothing-1476887420

(2) www.wsj.com/articles/making-billions-with-one-belief-the-markets-cant-be-beat-1476989975

 

The Power in Long Term


A Purposeful Investing Course subscriber sent in this question. 

Please when you have questions, ask away!  That’s why I am here… to serve you.

Good Morning Gary.  I am a PI subscriber and have been doing my homework as I want to learn to invest myself by using the guidance you provide in PI.  In looking at your portfolio this year of 17 country ETFs plus silver and platinum and also looking at Kepplers 12 emerging market ETFs, I see that you include some of those ETFs but certainly not all.  Am I misreading this?  Thanks for any input.

This subscriber is correct that not all of the Keppler good value markets are in the Pifolio, plus one market that is neutral value (Canada) is included.

There are a couple of reasons for this.
First, I wanted to set up the Pifolio and leave it for 5 years to see the undisturbed long term results.
My thinking behind this decision is nicely summed up in a recent article “Value Investing Is A Long-Term Strategy And Should Be Judged Accordingly” (1)
Here’s some excerpt from that article:

When investing in unpopular stocks, which is where value often comes from, it often requires waiting until they become popular again before you reap your rewards through rising prices.

Almost by definition, value investing rarely performs well in the short run. This is especially true when you are in a strong bull market like we’ve been in since March 2009. Most companies as represented by the S&P 500 are currently trading at fundamental multiples that are significantly above historical norms. Below is a 20-year historical earnings and price correlated FAST Graph of the S&P 500. There are two valuation reference lines on the graph.

The dark blue valuation reference line represents a normal P/E ratio of 18.12. The orange valuation reference line represents a fair value P/E ratio of 15. As you can see, for most of that time frame market prices traded between those valuation references. However, note the two outliers calendar year 2000 to the beginning of 2002 and calendar years 2017 to current. Clearly, current valuations are high. Not necessarily crazily high as some people believe, but undoubtedly higher than historical norms nevertheless.

share charts

However, I have a second portfolio because when we started the MOTIF Pifolio, I also had our banker invest exactly the same amounts in my personal account at exactly the same time as we executed the MOTIF Pifolio.   I wanted to test whether MOTIF, which has very low trading fees, was adding hidden costs at purchase.  They were not.
So I have an account at my bank that had an identical portfolio at inception appx. four years ago.
I have added some of the missing markets in my personal acct.
Next January, after 5 years of the Pifolio I plan to examine the differences between buy and update, as markets rise and fall in value, versus a buy and hold for five years approach.
Keep in mind most of the markets that were (or were not) good value, have changed very little.  France for example shifted from good value to neutral.  Each investor can make up their mind abouth whether to sell in a shift of this sort.  I have not sold the France ETF in my accoun.
The Pi system is much more  a “buy and hold” than “trade a lot” system.
To date there has not been much difference in performance between my personal portfolio and the Pifolio.
Here is a review of the Keppler good value markets and the ETFs within the Pifolio and departures in the Pifolio.
The good value developed markets are: Australia, Austria, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom
Canada.  Canada is a neutral value market, but has near good value values.  I hold iShares MSCI Canada Index ETF  in my personal portfolio but it is not in the Pifolio.
France. The iShares France Index ETF was good value when Pi began, but is still in the Pifolio even though it has dropped to neutral value.

Germany.  The iShares MSCI Germany Index ETF is in both portfolios.

Norway.  The Norway Global X MSCI Norway is in both portfolios and is overweighted.  See why here.
The good value emerging markets are:  Brazil, Chile, China, Colombia, the Czech Republic, Korea,Malaysia, Mexico, Poland, Russia,Taiwan and Turkey 
China.  We are overweighted in China with the iShares FTSE/Xinhua China 25 Index Fund (a Keppler Emerging Market)  because I treat China as a developed market).
The Czech Republic, Poland and Russia are not included as they were not good value or there was no ETF that represented the market.

Gary

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1)  Value investing is a long term strategy and should be judged accordingly

Speculation Opportunity in Norway


Last month I sent this lesson to Purposeful Investing Course (Pi) subscribers.

Now is a time, more than normal, to exercise caution in stock markets and maintain one’s value investing disciplines, but there are also seeds for value based speculation.

This chart of the S&P 500 performance for the past 30 years shows that the US market did exceptionally well in the 1990s, then was horrible in the 2000s and then did really well again in the 2010s.

No one knows what will happen in the 2020s, but chances are this will be a decade that ruins many investors.

microtrends.com

However there will be investing  opportunities and good value discipline includes the courage to buy when a market or currency is out of sync with mathematical reality. 

The December Market Outlook (1), we share with Pi subscribers, reveals such a speculative opportunity (bolds are mine):

The NOK or Norwegian krone in October hit a record intraday low of 10.31 to the EUR. Its decline is hard to decipher. The krone is undervalued by many common measures. Norway’s economic performance is solid while budget and trade balances are in surplus.

The Norges Bank is the only European central bank hiking rates four times this year. The NOK should be strengthening, not declining. Though the NOK has long been correlated to oil prices, the export-dependency on salmon has increased markedly over the last decade. Having almost doubled since 2008, salmon prices have plunged 20% this year. Ten years ago, Norway exported about 15 times more oil than fish but that ratio has narrowed considerably to just 3.5 times, according to Nordea Bankin Oslo.

The chart below from www.finance.yahoo.com shows how the US dollar has risen continually against the Norwegian economy.

yahoo.com

The chart below from Economist.com shows that Norway’s economic conditions are one of the strongest in the world.

economist.com

Norway’s current account balance at +7.1% of GDP (versus -2.4% for the US) is among the highest of all developed markets.

The Norwegian government’s budget balance at a +6.6 (versus -4.7% for the US) is by far the strongest.

The kroner interest rate on ten year gvt bonds at 1.1% is below the US rate of 1.7%, but if the krone appreciates versus the US, the real return could be higher.

However beyond kroner bond investments, we can see speculative potential in the Norwegian stock market.

In 2019 all markets included in the MSCI World Index were up, but in the last month Norway was down -1.5%.

Yet we saw that Norway remains one of the good value developed markets.

The Good Value Developed Markets are: There is no change in our country ratings this month. The Top Value Model Portfolio holds the ten “Buy”-rated markets Australia, Austria, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom at equal weights.

This is where the special speculation opportunity comes in.  The Norwegian Krone is under priced and the Norwegian market  is a good value market.

yahoo.com

The chart above from www.finance.yahoo.com shows how the Norwegian stock markets as evidenced via the iShares MSCI Norway ETF (symbol ENOR) performed in a similar pattern to the S&P500 from 2015 to 2018, but lagged seriously behind after.

Norwegian markets has overwhelming value stats compared with the US market.  Norway’s price to book is in the 1.8 range versus over 3 for the US.  The average dividend is 4.47% vs. 1.86%.

Long term, Keppler’s research suggests an equally weighted portfolio provides the best risk adjusted profit, but in instances of this nature, an overweighting in the Norwegian market is a healthy value oriented speculation.

I personally have an overweight position in ENOR.

Gary

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1) Read the entire December edition of ENR Asset Management’s Market Outlook here.

If prompted for a username and password, please use the following case sensitive keywords:

Username: enr

Password: Montreal

China After the Deal


Last day for 50% discount on Pi subscription.  See below.

Let’s take a look at China.

Earlier this month I sent our Purposeful Investing Course subscribers an update on the Chinese stock market’s potential since conclusion of the Phase I trade deal.

I shared some thoughts from the January 2020 issue of the ENR Asset Management Market Outlook (1) about the US, China Trade Deal.

The Outlook says:

The United States and China agreed to terms of a ‘Phase One’ deal earlier in December, which includes a commitment by China to purchase $50 billion worth of agricultural goods in 2020 along with energy and other goods. The U.S. agreed it would reduce the tariff rate on many Chinese imports ranging from 15% to 25%. The United States will soon turn its focus on the European Union, which continues to build significant trade surpluses with the United States since the 1980s. In 2019, that trade deficit is projected to be about $150-$180 billion;

Though world markets welcome the limited détente between the United States and China, implementation of the Phase One trade accord will prove tricky to implement. Any improvement in relations is likely to be temporary with tensions on both trade and other issues like technology likely to remain confrontational.

Having lived in Hong Kong for 6 years (decades ago), I gained great respect for the tenacity and long range view of the Chinese philosophy.

The Chinese play a long game and the recent New York Times article “Trump Gets His Trade Deal, China Gets the Win” by Dr. Eswar Prasad (2), professor at Cornell University and a senior fellow at the Brookings Institution suggests their tactics in this recent agreement reflect this fact.

Here’s some excerpts from the article:  China has suffered short-term pain from the trade war, but it stands to gain in the long term.

The phase-one agreement leaves many issues unresolved, so tensions between the two countries may continue.

What has the deal accomplished? It will bring some significant changes but comes with a big price tag for the American economy. The long-term effects might end up favoring China.

As part of the deal, China has agreed to increase its purchases of products from the United States.

More important, China has agreed to beef up its protection of intellectual property rights, to refrain from forcing foreign companies operating in China to transfer their technology to domestic firms, and to open up more of its economy to foreign investment.

In return, the United States has reduced some tariffs on Chinese imports and canceled additional tariffs.

Why did China make these concessions? Therein lies a deep irony. Many elements of the deal will make the Chinese economy stronger. China wants to be a more dynamic, innovation-led economy, so better protection of intellectual property rights will help. Opening up parts of its economy, such as banking and insurance, will spur competition and innovation in, for example, the Chinese financial sector. Many of the ostensible concessions are in areas where Chinese reformers have long sought to create change for their country’s own good.

China’s economy will also get a short-term boost from the trade deal. Stimulus measures, such as more spending by local governments, lower taxes and more bank credit, have kept growth from stalling, but the economy remains fragile.

This is why I, my portfolio (the one we track in our Purposeful Investing Course Pi) treats China as a developed rather than emerging country.  As the value of the ETF I chose for the portfolio, has risen it, as of January 16, 2020 represents, 8.1% of the portfolio.

Hong Kong represents 7.9% of the portfolio as well, so 15.9% of the total investments are Chinese related.

Let’s look at these two Chinese related ETFs.

The iShares FTSE/Einhua China 25 Index (symbol FXI) invests in the 25 largest Chinese companies.  Here’s some data from my online broker Motif.

motif

This Chinese market ETF was up 13.4% in 2019.

The iShares Hong Kong Index ETF (symbol EWH) represents investments in a good value developed market.

motif 2020-01-16 at 7.15.03 AM

The fund rose 9.67% in 2019.

The largest economies after the US and China, are the UK, Germany, France and Japan.  All three European economies were boosted by the Marshall Plan in the 1940s right after WWII.

Marshall Plan type support was expanded in the 1950s to include Japan.  China was not included in support from the US economy until after President Nixon thawed East West tensions in the 1970s.   This delayed China’s economic expansion by 20 years.

My belief is that as China, the largest nation in the world by population (four times more people than the USA) continues to improve its productivity and GDP per person, will continue to rise faster than that of the Western world, for a bit longer.  Due to the huge population its economy is just too large to treat as a secondary market.

Keep in mind, all of the investment in both China and Hong Kong are predicated on value. 

My overweighting in China is based on my assumption of the future… an educated guess at best. My investments in China now are based on math.  The Chinese stock market is a good value market.

The decision to invest in the Chinese and Hong Kong markets are first and foremost based on the math that compares average Price to Book, Price Earnings Ratio and Dividend Yields of each market.

                Price to Book           P/E Ratio           Average Dividend Yield

USA                3.65                          23.1                                1.83%

China             1.81                           14.7                                 1.87%

Hong Kong   1.28                           14.4                                 3.03%

Gary

Coronavirus and the Stock Market Round One is Done

Coronavirus and the stock market.  Round Two is coming.

This virus and the market faced off in the spring.  The market won.  As the chart below shows, after a huge March 2020 collapse, by early June, the DJIA was back to its December 2019 level.

stock chart

The market’s back up, but history suggests that we’ll see volatility in the ten years ahead.

Here is a chart of the Dow Jones Index for the past three decades.  The .dotcom bubble burst just before the beginning of the 2000 decade.

microtrends.com

The market then went nowhere from 2000 to 2014.   Finally it started reaching new high levels.

Such decades long sideways movement after a severe correction is nothing new in the stock market.

So everything’s in order… except the pandemic.  The ravages of the coronavirus dramatically increase the unknown and this uncertainty is the greatest purveyor  of weakness that a stock market can have.

How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past four and a half years, my strategy, to protect against the next stock market crash and yet gain income and appreciation from rising share prices is to invest in an equally weighted portfolio of the value based country ETFs.

We track 46 stock markets around the world in our Purposeful Investing Course to determine which markets offer the best value so we can be in a perfect position to take advantage of stock market corrections all over the world.

Since no one knows what the future will bring, investing in value makes the most long term sense.

Our Purposeful Investing Course (Pi) teaches 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.

Sticking to math based stock market value and country ETFs eliminates the need for hours of research aimed at picking specific shares.   Investing in an index is like investing in all the major shares of the market.  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 Pi portfolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that tracks an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund as well so such ETFs provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2019.  Now I am updating my plan to decide when it’s best to invest more.

70% is diversified into developed markets: Austria, Canada, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, China, Colombia, the Czech Republic, South Korea, Malaysia and Taiwan.

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

The ETFs provide incredible diversification for safety.  For example, the iShares MSCI  Japan (symbol EWJ) is a Country Index ETF that tracks the investment results the Morgan Stanley Capital Index MSCI Japan Index which is composed mainly of large cap and small cap stocks traded primarily on the Tokyo Stock Exchange mainly of companies in consumer staples, financials and materials. This ETF is non-diversified outside of Japan so an investment in the ETF is an investment in hundreds of different Japanese shares.

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 almost every market.

You can create your own good value strategy.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (Pi).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

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.

You also receive a 100+ page PDF value analysis of 46 stock markets (23 developed markets and 23 emerging stock markets).  This analysis looks at the price to book, price to earnings, average yield and much more.

This year I will celebrate my 52nd anniversary of global investing and 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.

Those five decades of experience have taught me several incredibly valuable lessons.

The first lesson is that there is always something we do not know.

The second lesson is that stock market booms and busts always eventually return to value.

Third, the only sure way to succeed is to use time not timing.

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

A 45 year portfolio study shows that holding a diversified good value portfolio (based on a  good value strategy) for 13 month’s time, increases the probability of out performance to 70%.  However those who can hold the portfolio for five years gain a 88% probability of beating the bellwether in the market and after ten years the probability increases to 97.5%.

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but during the pandemic to introduce you to this online course  I am knocking $124.50 off the subscription.

Guarantee

Enroll in Pi.  Get the basic training, the 46 market value report and access to all the updates of the past two years.

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 in the first two months for a full no fuss full refund.

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential. 

Due to the COVID-19 pandemic we have cut the subscription to $174.50.  You save $124.50!

Then because this global recovery is going to take years, we’ll maintain your subscription at just $99 a year rather than $299.  Your subscription will be autorenewed in 2021 at $99, though you can cancel at any time.

Click here to subscribe to Pi at the discounted rate of $174.50

Subscribe to Pi today and you get a year’s subscription to Pi now, get the 130 page basic training, the 120 page 46 market value analysis, access to over 100 previous Pifolio updates, plus begin receiving regular Pifolio updates throughout the year.

Gary

 

(1) ENR Market Outlook at http://www.enrassetmanagement.com/marketoutlook.html.

If prompted for a username and password, please use the following case sensitive keywords:

Username: enr

Password: Montreal

(2) www.nytimes.com/2020/01/15/opinion/china-trade-deal-trump.html?nl=todaysheadlines&emc=edit_th_200116?campaign_id=2&instance_id=15127&segment_id=20368&user_id=208b2cbe62eb7b536babab791d172bc7&regi_id=483172790116