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BUY CORPORATE BONDS R.R. Donnelley & Sons Company

October 22. 2014.  Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

As regular readers know, I really like individual corporate bonds.  (not bond funds)  I have had good luck with corporates and I have been suggesting corporate defined maturity etf’s recently.  The entire list is in the Core Portfolio.

link

link

Most people are not aware of corporates.  Brokers do not make any money selling you corporates, advisors seem to have no interest in corporates, and CNBC never talks about them.  But Corporates are a huge market and you should get educated on this segment of the financial markets.

Corporates are similar to a Treasury issued by the USA, except that corporates are issued by Companies.  Unless the Company goes bankrupt (which is a potential like the JC Penney bonds that I own) your money is typically safe—when the bond matures you get your money back plus the dividends you earned.  It is So important that you buy quality Companies and not crappy Corporates from crappy Companies..

Which leads me to a Corporate bond that I am suggesting you look at.

R.R. Donnelley & Sons Company is a global provider of communication services.  It has over 60,000 customers with expected 2014 revenue in the $11.5 to $11.8 billion range. They have had troubles in the past but it appears they are making a turn around.

2024 maturing notes, CUSIP 257867BB6

Providing over 6%.  Do not buy more than two or three bonds which will cost you around $1000 each.  Always buy small amounts (of any position that you purchase) to reduce your risk of defaults.

One more point:  do not get suckered into bonds that mature in 2045 or 2038—-way out there.  You don’t know what the hell is going to happen 20 or 30 years out!!!

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CAUTION

October 18. 2014.  Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

(Update Tuesday:  It appears they will run up the markets going into the elections.  In my opinion it is ok to start adding to positions…..but this is not a buy and hold market.  You always should be ready to sell.)

Despite the short covering rebound on Friday the long term technical indicators are Still indicating a downward trend in the momentum!!!!.  So it is possible that the market could drop again next week.

I would NOT be buying anything right now.  Wait a few days and see what happens.  You may get the opportunity to purchase at lower prices.  If you stayed invested like I did over the last month, just maintain your positions—I do not plan on adding to positions.  Patience is everything in this game.  (We continue getting those nice dividends!!)

In my personal opinion, the markets will be supported going into the elections and the markets will go higher.  What happens AFTER the elections is probably the important question right now…..and that is only three weeks away.

Here is another superior analysis by Arlington Capital Management that I suggest you watch:.

https://www.arlington-capital.com/Home/ViewPaasUpdate.aspx?AccessCode=C6UJ9A0006VH&key=2394752394851413548673283729283476

Movies.  Fury.  Definitely worth seeing.  Shoot em up portraying WW2.

According to a Wall Street Journal/ NBC News/ Annenberg survey conducted Oct. 10-16 of 1,172 voters, 49 percent of likely voters prefer a Republican-led Congress compared to 44 percent who would like a Democratic-controlled Congress.

An astounding 40 million dollars has been spent just on vacations for Barack Obama and his family.  Perhaps he figures that if we are going down as a nation anyway, he might as well enjoy the ride. 
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BSJL CORPORATE BONDS BUY 5.45%

October 13. 2014.  Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

(Update October 17.  Massive short covering today which is driving up prices.  Do not buy anything until we get a confirmation but I think they will do anything to keep the markets going higher until the elections are over.)

(Update 2 October 16 Final.  We may have finally hit the bottom.  Hold on and do nothing.  We may get an opportunity to buy.  If our momentum indicators start turning up you could buy or add to positions.)

(Update October 16.  PANIC.  Well, if you made the mistake of staying in our positions like I did, there is absolutely nothing you can do now but wait and watch.  You can’t buy and you can’t sell.  You can’t even short, its too late.  We are going down even further today.  A disaster.  Keep in mind that this market will only crash if interest rates go higher…..But they are now going Lower.  This is not a crash, just a pullback.  For now, hold on.  I would not be shocked to see this Administration come in and try to save the day, especially with the elections coming up.  FOX News is anticipating another round of Quantitative Easing (payroll tax cuts) and NO interest rate increases in 2015….this would support the markets.)

(Update October 15.  We are down 10% and it appears this correction may be over.  Do not sell anything, just hold on.  There is a possibility this could be a buying opportunity.)

(Update October 14.  The first rule in investing is NOT to lose money.  We are on the wrong side of the market but you really don’t lose until you sell and lock in losses.  So now what?  It is too late to sell and all we can do is hang on.  It appears we are heading further down in the days and weeks ahead…unless we see some dramatic good news in the earnings season.  Not good.  I suggest holding all positions and collect the dividends.  I am thinking we may hit a 10% downside and then go flat into the elections.)

I have been suggesting you sell any long term bond funds that you have.  When interest rates start to rise you will get killed.

But I do like the target date corporate bond funds and here is yet another suggestion from Guggenheim…..Guggenheim BulletShares 2021 High Yield Corporate Bond ETF  BSJL.  Buy at $24.77 and pay no more than $25.00.

I love individual corporate bonds and this fund holds numerous corporates to maturity and then closes.  (all the bonds mature and the fund shuts down)  You do NOT have the problems associated with regular bond funds.  And when you buy BSJL you can get in with a very small investment.  Shares are priced at $24.77 today.

Even better you can sell this fund at any time if you need the money.  If you would like more information go here and read about the recent purchase we made for another Guggenheim fund.

Prices are GOOD right now.  Do not delay buying.

http://guggenheiminvestments.com/products/etf/bsjl

Dont forget to vote:

ABC News:  Barack Obama and his political party are heading into the midterm elections in trouble. The president’s 40 percent job approval rating in a new ABC News/Washington Post poll is the lowest of his career – and the Democratic Party’s popularity is its weakest in polling back 30 years, with more than half of Americans seeing the party unfavorably for the first time.

Go here for more helpful links.

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OVER THE CLIFF????

October 9. 2014

Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

(Update Saturday:  Nothing is going to happen until the banks start reporting mid-week.  The momentum is down and if we do anything, the markets will probably decline further the first part of the week.  This is rough stuff but I am still holding all positions and collecting dividends….they will do anything possible to stabilize the markets going into the November elections.)

(Update Friday:  Maybe the declining gas prices will be stimulative for the economy and stock markets.)

Here is an excellent easy to read article on the state of the economy:

http://seekingalpha.com/article/2553215-why-the-market-topped-out

Last week I said the road was getting bumpy.

How quickly things change.  Suddenly we are hitting huge potholes and if a tire blows we run the danger of careening into the ditch.  We have had no volatility for a year but it is sure hitting now.

Despite low interest rates, stock buybacks and market manipulation they cannot keep the markets going higher.at least for right now  It appears that the huge unemployment rate of 13% (yeah that’s the real number) and the out of control entitlements like disability…. and government debt are finally starting to affect sentiment….along with the horrible economic conditions in Europe.

At this point I suggest you hold all positions and watch how the earnings season unfolds.

In my opinion they will do everything possible to get this market turned around and heading upward at least thru the November elections.  At that point all hell could break loose.

But I don’t have a crystal ball,… well I do but it doesn’t work so well,… and we just have to wait and watch.  Long term I am inclined to just hold on but we shall see.  Also read this interesting article on David Stockmans site:

http://davidstockmanscontracorner.com/collateral-damage-fed-style-yield-hungry-baby-boomers-are-on-a-death-march/

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ROAD STARTING TO FEEL BUMPY

Thursday October 5. 2014

Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

(Update Monday:  Investors are waiting for earnings season to start.  I doubt we will see much action until the banks report.)

When you go back to early this year and look at the charts, there were small indications that this market was starting to weaken.

But with the Fed maintaining their zero percent interest, and knowing that the government wants to manipulate this market higher, I have suggested that you stay invested.  And adding another component supporting this market…….Public Companies continue borrowing zero percent money to buy back their stock, which drives their stock and the markets higher.  (I hear the Fed is ‘whispering’ a rate increase next Spring.)

BUT this most recent pullback (4.6%) in the past few weeks is yet another indication that we need to be alert.

We have had five pullbacks this year, but the recent decline appeared much more quickly than we would have expected.  And we did not see a strong capitulation on Friday.  Yes the market screamed higher on Friday but I would not be shocked to see continued weakness.

So all of this confirms what I have been saying for a year.  We are going to see a crash.  Not this month.  Probably not next month.  Maybe not until next year.  Who knows.  But looking LONG TERM you have to be careful.

Don’t let yourself get caught in a crash like we had in 2008.  Be alert and ready to sell.

I continue holding all positions but investors today need to be prepared to place sell limit orders.  Definitely do not buy new positions, or sell anything, until we get a better sense of direction in the upcoming weeks.

For more go to:

http://davidstockmanscontracorner.com/september-jobs-some-numbers-they-didnt-mention/

Indeed, the single most important number in today’s report is 102 million, which is the rounded sum of adults either not in the labor force or unemployed, and it amounts to 41% of the adult population. Stated differently, that’s the number of adults who do not contribute to current production and must be supported either by family breadwinners or the state—-and nowadays especially the latter.

WHAT????  Wal-Mart is announcing the ending of healthcare for its part time workers because its too expensive.  I thot Obamacare was LOWERING COSTS.  You cant make up this shit.

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THE CLOUDS HAVE PARTED

Thursday October 2. 2014

Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

We were expecting huge thunderstorms today and they even talked about shutting down one of the local airports. But of course the weather man was WRONG as usual and the clouds are dissipating…………….the market was doing the same thing.

We hit bottom as I anticipated and the sun may come out after all.  We hit a low of 1923, the computer programs kicked in, and the we shot back up.

It looks like we have a capitulation and we could head higher, OR maybe just meander around until the November elections.

Either way, the dividends keep coming in.

Bottom line, the stock market long term is sending signals that we have to be alert.

The earnings season starts next week and we will have to see what happens.  I suggest buying nothing right now, assuming you have the cash, and wait to see what Companies are reporting.  We can then evaluate what looks worth buying if anything.  I am still holding all positions in the Core Portfolio.

Here are some things you do NOT want to buy:  preferred stock, annuities, long term bond funds.

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OUCH!!!

September 26, 2014  Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

Update Wednesday:  The Momentum is STILL down.  This is painful.  But you should be able to pick up some bargains in the next few weeks.

Update Monday:  This pullback is not over but we ARE getting close.

If you look at a two year chart on SPY you see a regular 3-6 month pattern of pullbacks.

We are once again going thru another pullback.  But you have to be willing to endure the short term pain for the long term gain.

My crystal ball says the path of least resistance is Down.  It appears the highest probability is the SPY declining to 1940.  So just hold on.  I am not really interested in buying anything right now and hope we may get a good buying opportunity in the near future.

As long as the Fed continues to print money and keep interest rates low, we are ok.  But as I have said numerous times, this thing is going to explode to the downside sometime in the future.  Continue to collect your dividends BUT be prepared to sell.  The link below gets you to an excellent free financial blog that I read every week.

https://www.arlington-capital.com/Blog/tabid/183/EntryId/144/A-Change-in-a-PAAS-Core-Indicator-this-Week.aspx

Has Cramer jumped the shark:

But the punchline is when one looks at Cramer’s ratings on a daily basis. It is here where one finds that this past Friday not only was Mad Money trounced by its competition including Fox Business’ brand new Making Money with Charles Payne (at a ratio of some 9 to 1), but Mad Money had a laughable 2,000 (!) viewers in the targeted 25-54 demo.

 

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