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WAITING AND WATCHING

October 29. 2014.  Go to “Core Portfolio” for current holdings.  Hit the “Follow” button to get updates. 

(Update Friday:  BUY COWNL at $25.15.  Exchange Traded Debt.  Buy SMALL position.  8% yield.  Do not pay more than $25.25.)

Continuing to hold all positions that we have owned in the Core Portfolio.  Oils are getting hit but I am not concerned.  We are long term investors and oil will go back up….eventually.  As mentioned earlier, I tried to get EMQ but it appears we missed it.)

We are in a short covering rally with low volume…..just a trading market.  NO new money.  Which is why I have been suggesting that you do not buy anything.

Right now we are just waiting for the elections.  If we get a pullback that forms a double bottom, we may have the opportunity to buy or add to positions.

Always watch the interest rates.  As long as they keep the rates very low, it is difficult for the market to head down.

If you do not own GGN which is our gold position, start watching.  You could get a huge buying opportunity if the dollar drops.

Entered BUY order for EMQ at $25.19 exchange traded debt.  This may NOT fill at the lower price but if we get lucky this is a good holding.

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investyourself.com talking about Hillary:  So it doesn’t surprise me one iota that this shrew was quoted as saying to a Democrat rally that you shouldn’t buy the line that businesses creates jobs.  In fact she said “Don’t let anybody tell you it’s corporations and businesses that create jobs”  Okay then, who does, the tooth fairy? Oh that’s right, in your Marxist world, only the Government how knows best how to handle money and create jobs.

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Book Recommendation.  The Corruption Chronicles.  Tom Fitton.  I thot this might be a another boring read.  BUT it’s exactly the opposite.  If you are interested in leaning more about how corrupt our government really is, read this.

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Local business owners are complaining about slow sales.  So, why is that you say.  All you have to do is look at the chart below to get an understanding of why consumers are reducing spending……………………

…from the Federal Reserve.  It shows how real median household income in the United States has declined since the year 2000…

Don’t believe all that crap in the liberal press about how things are getting so much better.

So kids, what is today’s lesson?  Don’t let yourself get caught up in a declining lifestyle.  Ger EDUCATED.  And SAVE as much as you can, especially when you are young, and INVEST it wisely.  You will be very happy you did.

Real Median Household Income 2014

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Harvard University on Wednesday provided new proof that the Democrats are going to be broadsided in Tuesday’s national elections as millennial voters, in a shocking shift, now prefer a Republican-controlled Congress and give President Obama his second lowest grade ever.

A new and massive poll of 2,029 18- to 29-year-olds from Harvard’s Institute of Politics just released found that of those who say they will “definitely be voting,” 51 percent want the GOP in charge, 47 percent favoring Democratic control.

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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. 

Is anyone surprised:  Nearly 7 in 10 Americans are angry at the direction the country is headed and 53% of Americans disapprove of President Barack Obama’s job performance, two troubling signs for Democrats one week before the midterm elections, a new CNN/ORC International Poll shows.

(Update Monday:  Fully invested.  They are supporting the markets going into the elections.  I would NOT be buying any new stock positions or adding right now….unless I see some bonds or fixed income positions that look tempting.  The weekly commentary from Arlington Capital Mgt is a must read (I have NO relationship with them):  https://www.arlington-capital.com/Blog/tabid/183/EntryId/151/A-V-Shaped-Bottom-to-Correction-or-More-to-Come.aspx)

Is Hillary really that STUPID?????  “Don’t let anybody tell you it’s corporations and businesses create jobs,” Clinton said.

(SOLD BDCL.  Starting to look weak.  We made money but I want to sell weaker positions as I am concerned about the markets going into the November elections.) 

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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Billionaire activist investor Carl Icahn also had some skeptical words about the Fed from the same conference, Zero Hedge reported.

“The Fed is really holding the market up. . . . The Fed turned this market around here because it let it be known that the Fed funds rate isn’t going to be raised in March. I am concerned about the high-yield market, I think that’s in a major bubble, but nobody knows when it’s gonna burst,” Icahn said, according to Zero Hedge.

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The big networks LOVE Obama.  lol.  The nation’s Big Three TV networks that breathlessly reported the 2006 anti-Bush election which gave Democrats control of Capitol Hill have practically ignored this year’s anti-Obama midterms that are expected to return full control of the Hill to the GOP.

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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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