January 28, 2015
IMPORTANT: To View Current Positions Go To Core Portfolio Click Here
BUYING Vanguard Natural Resources Corporate Bonds. As VNR is an oil Company I am placing this holding in the moderate risk category. Once this manipulated oil market settles down and the Saudis have done sufficient harm to Russia, oil will head up to a hundred per barrel. Yes folks this is all about Russia.
The VNR Corporates are selling at a huge discount and that is when you want to buy. I really doubt VNR is going to have any financial problems which would put these bonds at risk.
You always plan on holding Corporate bonds to maturity in this case 2020. Go to the link for the article below for more information. 10% (You can also buy the common stock VNR)
Corporates are priced at $1000 each so you need a larger portfolio to get into this arena. You typically buy 3-5 bonds the number of course depends on available funds. Big spenders buy 50 to 100 at a time!!!! I have had very good luck with Corporates. But most investors have no knowledge of this market because the financial press never talks about it. They don’t make any money promoting Corporates. The only good Corporate newsletter has even discontinued publishing.
We do have tons of baby bonds listed in the Core Portfolio. These are essentially Corporates that have been sliced into $25 increments. I strongly suggest you look at them.
Here’s something that many Americans — including some of the smartest and most educated among us — don’t know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading.
Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is “down” to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.
None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast “falling” unemployment.
There’s another reason why the official rate is misleading. Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 — maybe someone pays you to mow their lawn — you’re not officially counted as unemployed in the much-reported 5.6%. Few Americans know this.
Yet another figure of importance that doesn’t get much press: those working part time but wanting full-time work. If you have a degree in chemistry or math and are working 10 hours part time because it is all you can find — in other words, you are severely underemployed — the government doesn’t count you in the 5.6%. Few Americans know this.
There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.
And it’s a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual’s primary identity, their very self-worth, their dignity — it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen’s talents, training and experience, we are failing the great American dream.
Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America’s middle class.
I hear all the time that “unemployment is greatly reduced, but the people aren’t feeling it.” When the media, talking heads, the White House and Wall Street start reporting the truth — the percent of Americans in good jobs; jobs that are full time and real — then we will quit wondering why Americans aren’t “feeling” something that doesn’t remotely reflect the reality in their lives. And we will also quit wondering what hollowed out the middle class.
(Update Monday: I would step aside for now and just watch….altho as I mentioned you should nibble at the oil positions which we have listed in Core Portfolio. I think oil will continue upward.)
(Update Saturday: DOWN we go. I would not be surprised to see another 40 point drop in SPY. Unless we see some dramatic action that nobody expects, we will continue dropping. The trend is down folks. If you are still holding stocks just stay with them as I would expect a turnaround within the next few weeks….we own a lot of bonds and munis which are doing ok.)
NEW YORK (MarketWatch) — The U.S. oil benchmark settled sharply higher Friday, though it still finished the month with a big loss. WTI crude for March delivery CLH5, +7.46% settled up by $3.71, or 8.3%, at $48.24 a barrel. The U.S. oil benchmark gained 5.8% for the week, leaving it down 9.4% for the month after earlier showing a double-digit percentage decline for January. Analysts said factors behind oil’s advance on Friday included news of a big drop in U.S. rig counts as producers respond to oversupply, as well as short covering on the last day of the month. Read a full story here.
(Update Friday: The Fed is saying today that rates may go up this Summer. This is bad news for the stock market. I think stocks are going much lower as our technical indicators are pointing down. Despite what CNBC and this moronic administration is telling you our economy SUXXXX. But our muni and baby bond/corporate bond holdings are doing nicely. I would not be selling anything right now.)
Update January 29: Big gains today. Don’t be fooled. We are in a consolidation phase with ups and downs. The long term momentum is still down, so don’t be shocked if the market drops. Holding all positions in Core Portfolio.)
(Update: Momentum for SPY has been DOWN since December. And it appears we will go lower for the near term. But we suggest you continue holding all positions. We are seeing a lot of turmoil but I do not see any collapse.
Our recent buys are doing very well, and the bonds are ok as expected.)
J Gundlach is highly respected in the bond arena having been called ‘the new bond king.’ (Bill Gross the ‘other bond king’ has lost his luster.) Note his thoughts on gold which I pasted below. (We own several of his funds in the Core Portfolio.)
I have suggested you buy GGN which is a gold fund that pays a high dividend:
HOLLYWOOD, FLA. (MarketWatch) — While many investing experts advise always sticking to your game plan, Jeffrey Gundlach suggests you can take that too far.
In fact, the bond guru’s biggest mistake as an investor came when he was too narrow in his approach, he said Tuesday.
Gundlach, CEO of DoubleLine Capital, spoke briefly with MarketWatch after delivering a speech at ETF.com’s Inside ETFs conference in Hollywood, Fla.
Bullish on gold
In his keynote, Gundlach cautioned that an interest-rate hike by the Federal Reserve against a backdrop of global deflation might “court deflation.” He also said crude-oil prices won’t recover quickly and called himself bullish on gold, having increased his bet on the yellow metal a couple of weeks ago.
Oil is showing momentum upward. Historically when oil has dropped this far, it is time to buy.
There were rumors yesterday that Saudi Arabia is going to cut production which will send prices higher…..but these are simply rumors.
If you have been afraid of owning this segment, I suggest you consider buying small amounts of some dividend paying positions. Oil is a long term hold meaning 6 months or more. So have patience.
We own several in the Core Portfolio which you can look at.
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