Tag Archive | "vaue investing"

We Need Greater Caution Now


Spread the word… be careful of brands!

Our summer Creek Cabin sits over Little Horse Creek.

This is a perfect place to be during the summer heat… high in the mountains, far from the madding crowd, soothed by the creek as it sings its way down the mountain.

Yet there is also fiber optics broadband that provide up to a gigabyte of band width. so though remote we are perfectly connected.

little-horse-creek

Our Creek Cabin at Merrily Farms.

We are in the process of expanding the Creek Cabin and while talking with the county building inspectors, I was reminded of an important fact about the current state of social and economic decay that can have a serious impact on our investments.

cabin

The key to our society, our economy, our way of life is trust.

Humans are the only species that can cooperate flexibly in very large numbers. The glue that binds that cooperation is trust in some idea, like a nation, like money, like care in the medical system, human rights.

We have trust that these ideas as truth.  The bigger the idea,  greater the trust must be.

The trust requires transparency… which is why there has always been such importance in the freedom of the press.

The problem is in this era of global economics and ease to manipulate information there has been a shift in how truth and trust are built and maintained.

Brands can no longer be trusted.

We were grumbling to the inspectors of our Creek Cabin extension about the additions in the building codes, especially in the electrical system.

His explanation was that appliances are so poorly built in this day and age that the county has to build in additional safety to protect the houses from the appliances.

Recently when I was at Lowes looking at lawn mowers, a man who has a lawn maintenance business told me never to buy a low price brand lawn mower (such as John Deere or Cub Cadet).  They were all built in factories in China or elsewhere overseas and would not last.  These companies had sold their brand to increase volume of sales.

How did we let this happen?  How did we allow manufacturers to turn us into commercial lambs continually led to the slaughter.

I recall how in the early 1990s we took a group of investors on an Eastern European tour.   The brand new hotel in Budapest was so inferior that when I washed my face and toweled off, it turned brown.    The towels were so cheap the that the dye came out of the towel on their first use.

I remember clearly laughing at how poor the quality of the Eastern European products were.

Little did I know that the rot of product performance had started in the USA.  Brands were becoming images of illusion rather than signs of dependability.  We could no loner trust most of the big brands.

I find that pens don’t write, bandages don’t stick and as prices rise manufactures hide the fact by keeping big packages, but fill them with less.

Brand companies can no longer be trusted.

Changing times obviously will hurt some brands.  Take Sears, JC Penny as an example.

Even as they slide, they help the rot grow more than just their demise.  For example Sears sold its Crafstman Tool business to Stanley Black & Decker.

Mainline Craftsman tools such as screwdrivers has been mostly produced exclusively by Western Forge.  Tools produced for Craftsman by Western Forge such as adjustable wrenches, screwdrivers, pliers and larger mechanic tool were made in the United States.  Now Western Forge no longer supplies Craftsman tools.

Stanley Black and Decker are free to source Craftsman from the suppliers of their own choosing and consumers may find different versions of Craftsman products at the different outlets that sell them.

For example, a Craftsman screwdriver sold at Sears is typically sourced from a vendor in China, an equivalent model at Lowes sourced from a supplier in Taiwan.

Too many times this trickery comes home to roost and brands and even brand companies crash. 

Take of Boeing Air Company as an example.

What’s not to trust?  This is the biggest exporter, the biggest maker of airplanes, the leading brands in one of the most important products in the world.

Screen Shot 2020-06-27 at 1.28.11 PM

The price of this company’s share have risen for decades. Until it didn’t.

boeing

In the past we could feel safe loading up our investment portfolio with Blue Chip shares.  Now doing so might just make you blue.  Imagine your pension being loaded with Boeing shares!

This is why we should diversify our investments.

This danger from the loss of trust is why our Purposeful Investing Course shows how to invest in Good Value Country ETFs.  It’s less likely that an entire country and its stock market will lose the trust investors have in it.

Even more if all the markets chosen are the best value markets based on their price to book, price earnings ratio and average dividend yield, plus other mathematical factors, your chances of long term profits improve.

Whether you like this idea or philosophy, however you invest, whatever you believe,  keep in mind this important lesson, that brands are no longer as trustworthy as they used to be.

Gary

Coronavirus and the Stock Market Round Two

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,the DJIA is almost back to its December 2019 level.

https://www.flickr.com/photos/garyascott/50461407731/in/dateposted-public/

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.

Such delays have profound implications for older generations who may need to cash in equities for income.  How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past five 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 (Pi) 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, China, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, Colombia, 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

 

 

Why Technology Shares Will Soar


Here’s two ways to profit from the fact that technology has changed our lives.

I’m not sure the change is good by the way.

But we have to do the best we can, with what we have, while facing reality as it unfolds and I think addiction to technology by most of the global population is a fact.

So how do we take advantage of technology buy control it instead of letting it control us?

pixabay

One way to take advantage of technology is to invest in it.

Last week we sent our Purposeful Investing Course subscribers (Pi) the ENR Asset Management Advisory Extra Bulletin (1) which is published for its largest clients.  This bulletin is only available to the large ENR clients 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.  During the market turmoil of March and April, their portfolios escaped most of the turmoil were down 2.75% in Low Risk, down 3.25% in Medium risk and down 3% in Global Contrarian, while the S&P 500 was down 13.40%.

That’s a good job of protecting their clients.

In this month’s issue  of the Advisory Extra ENR CEO Eric Roseman looked at why he expects “Technology Stocks to Lead Growth in Next Decade”.

Eric wrote: How to Invest in the ‘New Normal’

Will the world change as a result of the novel coronavirus (COVID-19)? Will such a seismic event forever alter the way we socialize, conduct business and invest? Or will this sobering period in our lives eventually pass and lead to greater times both economically and socially? To answer these and other questions with more clarity, let us turn back to the last great global pandemic – the worst in the 20th century.

enr

Most of the evidence indicates that the economic effects of the 1918 influenza pandemic were short-term. Many businesses, especially those in the service and entertainment industries, suffered double-digit losses in revenue. Other businesses that specialized in health care products experienced an increase in revenues. By the time the Spanish Flu ended in the fourth quarter of 1919, the United States was already entering the gates of an economic recession; by January 1920, the nation suffered a sharp deflationary recession until July 1921.

What followed the 1920-1921 mini depression was one of the greatest economic booms in American history better known as the ‘Roaring Twenties.’ From 1920 to its peak in October 1929, the Dow Jones Industrials Average surged 500%, including dividends. That still ranks as the best decade in history for the Dow. The Roaring Twenties refers to the decade of the 1920s in Western society and Western culture. It was a period of economic prosperity with a distinctive cultural edge in the United States and Europe, particularly in major cities such as Berlin, Chicago, London, Los Angeles, New York City, Paris, and Sydney. And the boom raged on until October 1929; we all know what followed.

Eric explains that the technology sector is likely to expand because because patterns of consumer and business spending will undergo dramatic shifts.

Technology stocks have already dominated long-term global performance returns and technology will have an even more important impact on how we do business, interact and modernize.

Eric wrote: It has already changed how we isolate amid this pandemic.

Technology this time is being propelled by a shock to the physical world – a shift that will profoundly change the way we consume, interact and invest. This economic recession disproportionately hurts companies that rely on a physical footprint while enabling digital businesses to mitigate cyclical headwinds with revenue gains.

According to the Bureau of Economic Analysis and The Financial Times, the digital economy makes up about 8% of U.S. GDP while growing about five times faster than overall output. The Covid-19 pandemic is likely to accelerate digital adoption by three years and could bring the digital share of GDP to 9.5% by next year. The long-term winners will be companies offering easy-to-use digital products in the cloud and with a distributed workforce.

You can read the entire May 2020 ENR Advisory Extra bulletin when you enroll in the Purposeful Investing Course subscribers.

Subscription to the Pi course is normally $299, but you can see below how to become a Pi subscriber now FREE

Gary

Coronavirus and the Stock Market Round Two

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,the DJIA is almost back to its December 2019 level.

stocks

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.

Such delays have profound implications for older generations who may need to cash in equities for income.  How do we maximize the return on your savings and investments during this extremely dangerous time?

For the past five 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 (Pi) 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, China, France, Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in emerging markets: Brazil, Chile, Colombia, 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) Get details about ENR portfolio performance from Thomas Fischer at thomas@enrasset.com