Quarter End Commentary July 25, 2011
Through June 30, 2011, our five year composite track record, net of all fees, through June 30, 2011 shows that we produced an average annual return of 6.07% for our discretionary clients during a tumultuous time in the financial markets. By contrast, the Standard & Poors 500 stock index averaged […]
This important article does not make encouraging reading, but needs to be seen. To me it suggests that careful stewardship of your retirement savings will be a life long process.
July 7, 2011
WHO KNEW?
Certainly not dour Bill Gross or perennial bear Nourial Roubini, who until ten days ago were featured in gloomy headlines and media interviews. As usual, the media choose to tell yesterday's story. They were in love with tech stocks before they tanked in 2002, with silver before it tanked six weeks ago and with real estate before it tanked 4 years ago. To me, yesterday's strong rally, coming as it did after Moody's downgraded Portugal's sovereign debt to "junk" status, threatening yet another European financial crisis, was pretty strong evidence that we are in a new Bull upleg for equities.
Even if the Recession is Over, the Recovery will not Cure Structural Weaknesses in the US’ Economy
December 10,2010
Reproduced below is part of the December 2010 Commentary issued by PIMCO’s Bill Gross. I’m sharing this
as it expresses, in trenchant terms the reality of the financial challenge facing a generation of
Americans here and now. […]
How Can Being Wrong Feel So Right?
November 1, 2010
It is beginning to appear that our decision to unload some stocks in August was...less than brilliant. Oh well, those we retained are doing well and our clients' high exposure to income producing assets has kept portfolio values firm. Let's address equities, first: As clients know, and anyone who cares to read previous postings can see, I became frightened of the "double dip" this past Summer, and given some false technical signals, sold off a few stocks. We are long term value investors, so selling is nearly as difficult a decision as buying for us, and in this case, the decision appears to have been overly cautious. We've spent much of the past four weeks re-entering equities, with good results so far, although our cash position remains above normal. Seasonal trends are for a strong stock market in the next few months. Further, earnings for virtually all our holdings have at least met, if not exceeded expectations. Our decision to increase exposure to gold (via a gold Exchange traded fund) has been most rewarding as well. Still, I derive a lot of satisfaction from our clients' cash cows.....
The following is excerpted from a Wall Street Journal article published in October 2010:
Grantor Retained Annuity Trust - if you are about to sell a Business or an Sppreciated Stock Portfolio, consider This :
Because this type of trust works best at times when interest rates are low and asset values are depressed—times like these, in other words—estate planners are urging clients...
"California taxpayers are paying pensions that exceed $100,000 a year to over 12,000 former state and local
government workers, including more than 9,000 state and local employees covered by the California Public
Employees’ Retirement System (CalPERS) and over 3,000 former school administrators or teachers covered under the
California State Teachers’ Retirement System (CalSTRS)."
"California taxpayers pay 85 percent of the health care premiums for most active state workers, 100 percent of the
health care costs for most state retirees and 90 percent of health care costs for their families."
Excerpt from "How California's Public Pension System Broke and How to Fix It"
August 13, 2010
When a friend told me, a couple of years ago, that his brother had retired as fire chief of a northern California city at age 55, with a $240,000 a year pension, plus medical and dental benefits, I had my first inkling of what is going on in the Golden State. Just a couple of months ago, I read a book called As America Aged by Roger Lowenstein, a financial writer who created the definitive portrait of Warren Buffet in the early '90's. I decided it would be my mission to alert everyone I know to the raiding of the public treasury that is going on via gold plated retirement benefits for public employees. But I got buried with other things, and then the Bell, California pay scandal hit national media about three weeks ago. There is a growing awareness among the civilian population, stripped of their pensions decades ago, lucky to have their employer fund a 401K, or lucky to have a job, that they've been had.
Retirement Living may soon be challenged by Rising Inflation
Friday, July 16, 2010, saw the release of the consumer price index and as noted by Goldman Sachs analysts, while the index was actually down .14 percent in June and up only 1.1 percent for the past 12 months, "core inflation" was a bit stronger than the analysts had expected. Of particular note was a rental index that rose .1 percent in the past month with "lodging away from home" up 1.3 percent. This confirms what I have heard anecdotally that people are vacationing and travelling again and obviously willing to pay up for this privilege for the first time in a couple of years. A small piece of additional evidence entered my world this past weekend. When I called to cancel a reservation at the Cedar Lodge just outside Yosemite, they told me they were going to charge a $7.50 cancellation fee! This is a first for a hotel (rather a 2-3 star motel) in my experience, given they had a week's notice. The travel industry rivals bankers in their assertion of garbage fees, and apparently they now feel confident in getting away this nonsense-witness the bag charges imposed recently by most major airlines!