The stock market was already falling last week when on Thursday, May 6, 2010, the market did a free fall of 1,000 points on the Dow Jones Industrial Average for about 20 minutes before recovering with a loss for the day of almost 400 points. That drop rattled investors worldwide because they have never seen that happen before. Some people claim that it was a trader who typed in a “Sell Order” for one Billion shares instead of one Million in a Procter and Gamble’s trade. Some say that it was a lack of “Buy Orders” for almost two minutes in Procter and Gamble’s stock. Others say that it was an imbalance of orders between the NYSE and NASDAQ in Procter and Gamble’s orders. The fact of the matter is that no one really knows what happened. But they will come out with some excuse to settle the fears of the financial community.
Congress, the SEC, and the Treasury Department are in the middle of a major rewrite of the Securities Industry Laws. Senator Charles Schumer, Democrat from New York will probably get his way, calling for new system wide circuit breakers to prevent such a “Free Fall” in individual stocks from triggering “Exchange Landslides” again.
It is situations like these that make my investment strategy look good. I tell investors to minimize risk while maximizing profits by using non-investment grade Corporate Bonds as the major percentage of their portfolio. My portfolio is made up of 95% Junk Bonds, 4% Stock, and 1% Cash. Between May 1 and May 8, my portfolio fell from 20.05% YTD Profits to 17.54% YTD Profits or down 2.51%. The Dow was down 5.71% for the week, 11,008.61 to 10,380.43. For the year, I was still up 17.54% while the Dow was down .46% YTD.
That means that people who had all their money in the stock market went no place or lost money in the last 5 months while I gained. The reason, I minimize my losses by keeping a high percentage of my portfolio in Junk Bonds. Most people try to make a killing in the stock market by speculating or gambling with mutual funds (stocks or bond funds) and with individual stocks with nearly 100% of their money. This is why they have poor results.
It does not matter if you invest in stock funds or bond funds. They are both speculative because they do not mature like bonds. The maturity is what makes individual Corporate Bonds safe because either the underlying company goes out of business or they pay you. Even if they go out of business, you still have first pick of the assets when it is sold off and the cash distributed.
Monday, May 10, 2010
Tuesday, March 30, 2010
They Treat You Like Children!
When my children started crawling around on the floor, they started playing with everything except their toys. Telling them to stop was not working. They were too young to punish. So I had to show them something else and try to get their mind off of the things that I did not want them to play with. I am sure my parents did the same to me when I was about 10 months old. I bet you parents had to do the same thing with your children and your parents did the same thing to you.
Did you know that this type of “physiological deflection” goes on in the investment business as well? I watched a financial analyst who specializes in the Bond Market on MSNBC recently. He was talking about the coming long bear market in bonds. I had to laugh because it reminded me of when I was trying to stop my children from playing with things that I did not want them to have. The analyst is correct in my view that a long bear market will come. The reason! The federal government is keeping interest rates low to restart the economy and put people back to work. But some day, they will have to raise interest rates to stop inflation from rising. This act will raise interest rates on bonds and bring down bond prices.
So you might ask, then why am I laughing at the financial analyst? The analyst was trying to tell you the public to take your money out of bond funds and place them into stock funds. Yes, bond fund prices will fall if what the analyst and I believe comes true. But you the public should not have your money in bond funds anyway. A large part of your investment profits in bond funds goes toward management fees to support the brokers, analysts, and their firms. You get what is left over. You switch to stock funds; you just jumped from one “gambling bookie” to another.
Investment firms and mutual funds make money off you if your investments go down and they make money off of you if your investments go up. When they go down you just pay them from your investment principle instead of your profits. So this analyst wants to deflect you into stock funds and away from stock and bonds.
As I said many times before, stocks are speculative. They are for speculators, not investors. Add mutual funds into the mix and you pay a monthly fee to the bookie to speculate in the stock market for you. Then you wonder why most people with IRAs lost 50% or more of their investment over the past 10 years. You also wonder why your investment firm can give large bonuses at the end of the year to their top employees. Going into a bond fund turns your investment instrument into a speculative instrument because you placed a bookie in the mix. You lose less in a bond fund but why lose your money at all?
Buy individual bonds and wait until they mature. It does not matter if the bond market is in a bull or bear market. All it means to you is in a bull market you can make more money than you can in a bear market. But you may only lose money if the company backing the bonds can’t pay you.
****************
Darnell L Williams invests primarily in his IRA and for the Darnell L Williams Foundation. He invests mostly in non-investment grade bonds (junk bonds). The established Investment Community claims that junk bonds are more speculative than stock investments or stock mutual funds.
Below are returns from investment indexes around the world. See how they compare to Darnell’s returns.
http://news.morningstar.com/index/indexReturn.html
Darnell’s returned in 2009 45.39% and 17.98% YTD in 2010. He advised one client starting in August 2009 to the end of March 2010 making 11.79% and YTD 2010, 3.93%. He advised a second client starting in August 2009 to the end of December 2009 making 24.81% and YTD 2010, 5.41%.
Now check your investments and see where you fall.
Did you know that this type of “physiological deflection” goes on in the investment business as well? I watched a financial analyst who specializes in the Bond Market on MSNBC recently. He was talking about the coming long bear market in bonds. I had to laugh because it reminded me of when I was trying to stop my children from playing with things that I did not want them to have. The analyst is correct in my view that a long bear market will come. The reason! The federal government is keeping interest rates low to restart the economy and put people back to work. But some day, they will have to raise interest rates to stop inflation from rising. This act will raise interest rates on bonds and bring down bond prices.
So you might ask, then why am I laughing at the financial analyst? The analyst was trying to tell you the public to take your money out of bond funds and place them into stock funds. Yes, bond fund prices will fall if what the analyst and I believe comes true. But you the public should not have your money in bond funds anyway. A large part of your investment profits in bond funds goes toward management fees to support the brokers, analysts, and their firms. You get what is left over. You switch to stock funds; you just jumped from one “gambling bookie” to another.
Investment firms and mutual funds make money off you if your investments go down and they make money off of you if your investments go up. When they go down you just pay them from your investment principle instead of your profits. So this analyst wants to deflect you into stock funds and away from stock and bonds.
As I said many times before, stocks are speculative. They are for speculators, not investors. Add mutual funds into the mix and you pay a monthly fee to the bookie to speculate in the stock market for you. Then you wonder why most people with IRAs lost 50% or more of their investment over the past 10 years. You also wonder why your investment firm can give large bonuses at the end of the year to their top employees. Going into a bond fund turns your investment instrument into a speculative instrument because you placed a bookie in the mix. You lose less in a bond fund but why lose your money at all?
Buy individual bonds and wait until they mature. It does not matter if the bond market is in a bull or bear market. All it means to you is in a bull market you can make more money than you can in a bear market. But you may only lose money if the company backing the bonds can’t pay you.
****************
Darnell L Williams invests primarily in his IRA and for the Darnell L Williams Foundation. He invests mostly in non-investment grade bonds (junk bonds). The established Investment Community claims that junk bonds are more speculative than stock investments or stock mutual funds.
Below are returns from investment indexes around the world. See how they compare to Darnell’s returns.
http://news.morningstar.com/index/indexReturn.html
Darnell’s returned in 2009 45.39% and 17.98% YTD in 2010. He advised one client starting in August 2009 to the end of March 2010 making 11.79% and YTD 2010, 3.93%. He advised a second client starting in August 2009 to the end of December 2009 making 24.81% and YTD 2010, 5.41%.
Now check your investments and see where you fall.
Friday, March 5, 2010
Options: The Next Level in Investing
From 1999 to the beginning of 2009, people have seen a hard time with their IRAs and other retirement accounts. If you were lucky like me, you lost in some years 3 to 5 percent but never gaining more than 17 percent in any given year. If you were like most people around the country, you lost at least 50 percent of your investments and can not afford to retire. If you followed my investment strategy from 2009 until now, you should be well on your way to recovery. In 2009, my rate of return was 45.39%. “Year to Date” for 2010 it is 14.10%.
If you recall, I suggested that you place part of your retirement money in Ford Motor Company Stock. My buy range was from $6.00 to $7.50 per share. I suggested that you let the stock double in price, $12.00 to $15.00 then sell half of your investment. That way you can take your initial investment out. At that point you would be “risk free” in this investment. For the remainder of your Ford Stock investment, all you have to do is check your stock for 10 to15 minutes every night to see if the trend of the stock is still up, the market is still on the up trend, the fundamentals of the company is still good, and if the trend for the auto industry is still generally on the up swing. If these fundamentals change then you know to sell the rest of your stock.
Now let’s take this investment strategy to the next level. Let’s say that you bought 200 shares of Ford Motor Stock at $6.00 per share (200 shares times $6 is $1,200). Following my investment strategy, you decide to sell 100 shares at $12 per share (100 shares time $12 is $12,000). You would be “risk free” after this transaction. Instead of selling the stock, how about “writing a call option” with a strike price of $13 per share at 11:20 AM on March 4, 2010. At that time, a March 10 Call with a Strike Price of $13 was asking 23 cents (1 Call times 100 shares times 23 cents is $23). The transaction may cost you $13 so you will only make $10. But $10 profit divided by $600 investment price is 1.67% and you still have the stock.
By writing or selling the option to someone will allow them to call away your stock at $13 per share until March 20, 2010 (Exploration Date). However, you locked in at least a selling price of $13 per share plus $10 for the option ( $13 times 100 shares plus $10 or $1,310). That is if someone exercises the right to call away your stock at $13. If your stock is not called by March 10, 2010, the option expires and you are free to write another option that will expire on the next expiration date that you take at the price that you set. You will collect more money for that “call.” Writing Covered Calls is a very conservative way to make a few more dollars on your investment. Your risk is that the company may go out of business or never recover from a price collapse. But remember, you have your original investment already!
We only looked at one conservative Stock Option Strategy for selling stocks that you already own. In-the-Money (ITM), Out-of-the-Money (OTM), and At-the-Money (ATM) Option Stategies can give you different amounts of cash based on market conditions and your investment commitment to the transaction. If you would like more information on options, go to this website http://www.optionsxpress.com/
If you recall, I suggested that you place part of your retirement money in Ford Motor Company Stock. My buy range was from $6.00 to $7.50 per share. I suggested that you let the stock double in price, $12.00 to $15.00 then sell half of your investment. That way you can take your initial investment out. At that point you would be “risk free” in this investment. For the remainder of your Ford Stock investment, all you have to do is check your stock for 10 to15 minutes every night to see if the trend of the stock is still up, the market is still on the up trend, the fundamentals of the company is still good, and if the trend for the auto industry is still generally on the up swing. If these fundamentals change then you know to sell the rest of your stock.
Now let’s take this investment strategy to the next level. Let’s say that you bought 200 shares of Ford Motor Stock at $6.00 per share (200 shares times $6 is $1,200). Following my investment strategy, you decide to sell 100 shares at $12 per share (100 shares time $12 is $12,000). You would be “risk free” after this transaction. Instead of selling the stock, how about “writing a call option” with a strike price of $13 per share at 11:20 AM on March 4, 2010. At that time, a March 10 Call with a Strike Price of $13 was asking 23 cents (1 Call times 100 shares times 23 cents is $23). The transaction may cost you $13 so you will only make $10. But $10 profit divided by $600 investment price is 1.67% and you still have the stock.
By writing or selling the option to someone will allow them to call away your stock at $13 per share until March 20, 2010 (Exploration Date). However, you locked in at least a selling price of $13 per share plus $10 for the option ( $13 times 100 shares plus $10 or $1,310). That is if someone exercises the right to call away your stock at $13. If your stock is not called by March 10, 2010, the option expires and you are free to write another option that will expire on the next expiration date that you take at the price that you set. You will collect more money for that “call.” Writing Covered Calls is a very conservative way to make a few more dollars on your investment. Your risk is that the company may go out of business or never recover from a price collapse. But remember, you have your original investment already!
We only looked at one conservative Stock Option Strategy for selling stocks that you already own. In-the-Money (ITM), Out-of-the-Money (OTM), and At-the-Money (ATM) Option Stategies can give you different amounts of cash based on market conditions and your investment commitment to the transaction. If you would like more information on options, go to this website http://www.optionsxpress.com/
Friday, January 8, 2010
Taxes Paid by your Investments
Double Your Money in One Year!
Back in March 2009, I gave a “buy” recommendation on Ford Motors Company Stock. I suggested that you, the speculator buy this for your IRA and for other accounts at or below $7.50 per share. I felt that below $7.50, your risk of capital would be very low. The stock sold for as low as $1.50 and is now selling for a recent price of $11.72. I also said to sell half your investment when the stock doubles. For example, if you bought 200 shares of stock at $6.00 on May 1, 2009, you would have $1,200 in this investment. If you sold 100 shares of your 200 shares for $1,200 ($12 per share), you would get your original investment back. Now your other 100 shares can maximize your profit at no risk to you.
Federal and Pennsylvania State Taxes
You ask, but what about my tax situation? If you are buying and selling stocks and bonds in your IRA account, your taxes are deferred to when you withdraw the money from your account. You can do that at age 59 ½ or later without penalty. Before you turn 59 ½ you pay a 10% penalty on any money withdrawn from your IRA account (special circumstances in the tax law excluded) plus you pay tax as income on the money. Over 59 ½, you pay taxes on the money withdrawn in the year of withdraw per the tax law at that time with no penalty.
What if I buy and sell in a Regular or Margin Account?
Let’s say that you sold 200 shares in less than one year and one day after purchase. For argument sake, let’s say you are in a 25% tax bracket ($33,950 to $82,250 if single. $67,900 to $137,050 if married filing jointly). You would pay $300 in federal taxes and $36.84 in Pa State Income taxes (Pa Rate 3.07%). ($1,200 times 25% equals $300 and $1,200 times 3.07% equals $36.84 that you have to pay). But if you wait until after one year and one day after buying the stock, you would have a long term gain. That means that you pay $60 to the IRS and $36.84 to the state. ($1,200 times 20% equals $240 because it is a long term gain. $240 times 25% equals $60 in federal taxes you have to pay. For you Pa. State tax it is the rate of 3.07% times $1,200 equals $36.84).
In our example, a long terms gain has you paying a total tax bill of $96.84 while a short term gain gives you a tax bill of $336.84. So the trick in a regular investment account is to try to sell your investments with a long term gain instead of a short term gain.
Let’s say that you did this transaction above and sold 100 shares in less than one year and one day after purchase. You invested $600 and you made $600. You would pay $150 in federal taxes and $18.42 in Pa State Income taxes (Pa Rate 3.07%). ($600 times 25% equals $150 and $600 times 3.07% equals $18.42 that you have to pay). That is a total of $168.42 on a $600 profit. But if you wait until after one year and one day after buying the stock, you would have a long term gain. That means that you pay $30 to the IRS and $18.42 to the state. ($600 times 20% equals $150 because it is a long term gain. $150 times 25% equals $30 in federal taxes you have to pay. For you Pa. State tax it is the rate of 3.07% times $1,200 equals $36.84). You pay a total of $66.84 in state and federal taxes on a $600 profit.
Tax information given by Joyce Hamburg is a Tax Associate of H&R Block, Uptown Shopping Plaza, Harrisburg, Pa. 17110, 717-238-4301.
Look for my investment information on Facebook. Search for Darnell L Williams.
Back in March 2009, I gave a “buy” recommendation on Ford Motors Company Stock. I suggested that you, the speculator buy this for your IRA and for other accounts at or below $7.50 per share. I felt that below $7.50, your risk of capital would be very low. The stock sold for as low as $1.50 and is now selling for a recent price of $11.72. I also said to sell half your investment when the stock doubles. For example, if you bought 200 shares of stock at $6.00 on May 1, 2009, you would have $1,200 in this investment. If you sold 100 shares of your 200 shares for $1,200 ($12 per share), you would get your original investment back. Now your other 100 shares can maximize your profit at no risk to you.
Federal and Pennsylvania State Taxes
You ask, but what about my tax situation? If you are buying and selling stocks and bonds in your IRA account, your taxes are deferred to when you withdraw the money from your account. You can do that at age 59 ½ or later without penalty. Before you turn 59 ½ you pay a 10% penalty on any money withdrawn from your IRA account (special circumstances in the tax law excluded) plus you pay tax as income on the money. Over 59 ½, you pay taxes on the money withdrawn in the year of withdraw per the tax law at that time with no penalty.
What if I buy and sell in a Regular or Margin Account?
Let’s say that you sold 200 shares in less than one year and one day after purchase. For argument sake, let’s say you are in a 25% tax bracket ($33,950 to $82,250 if single. $67,900 to $137,050 if married filing jointly). You would pay $300 in federal taxes and $36.84 in Pa State Income taxes (Pa Rate 3.07%). ($1,200 times 25% equals $300 and $1,200 times 3.07% equals $36.84 that you have to pay). But if you wait until after one year and one day after buying the stock, you would have a long term gain. That means that you pay $60 to the IRS and $36.84 to the state. ($1,200 times 20% equals $240 because it is a long term gain. $240 times 25% equals $60 in federal taxes you have to pay. For you Pa. State tax it is the rate of 3.07% times $1,200 equals $36.84).
In our example, a long terms gain has you paying a total tax bill of $96.84 while a short term gain gives you a tax bill of $336.84. So the trick in a regular investment account is to try to sell your investments with a long term gain instead of a short term gain.
Let’s say that you did this transaction above and sold 100 shares in less than one year and one day after purchase. You invested $600 and you made $600. You would pay $150 in federal taxes and $18.42 in Pa State Income taxes (Pa Rate 3.07%). ($600 times 25% equals $150 and $600 times 3.07% equals $18.42 that you have to pay). That is a total of $168.42 on a $600 profit. But if you wait until after one year and one day after buying the stock, you would have a long term gain. That means that you pay $30 to the IRS and $18.42 to the state. ($600 times 20% equals $150 because it is a long term gain. $150 times 25% equals $30 in federal taxes you have to pay. For you Pa. State tax it is the rate of 3.07% times $1,200 equals $36.84). You pay a total of $66.84 in state and federal taxes on a $600 profit.
Tax information given by Joyce Hamburg is a Tax Associate of H&R Block, Uptown Shopping Plaza, Harrisburg, Pa. 17110, 717-238-4301.
Look for my investment information on Facebook. Search for Darnell L Williams.
Sunday, December 27, 2009
Darnell Williams Vs. The World
Data is from Morning Star Investments
Name ------------------------------------Type -------------As of Date -----------YTD
Morningstar Stock Indexes
Broad Market
US Market --------------------------------TR ---------------12-24-09 ----------29.85%
Style
Large Growth -----------------------------TR ---------------12-24-09 ----------45.38%
US Growth --------------------------------TR ---------------12-24-09 ----------44.16%
Mid Growth -------------------------------TR ---------------12-24-09 -----------3.67%
Small Value -------------------------------TR ---------------12-24-09 ----------43.29%
Small Core --------------------------------TR--------------- 12-24-09 ----------42.48%
Mid Core ----------------------------------TR ---------------12-24-09 ----------41.32%
Mid Cap -----------------------------------TR ---------------12-24-09 ----------41.17%
Small Cap ---------------------------------TR ---------------12-24-09 ----------40.12%
Mid Value ---------------------------------TR ---------------12-24-09 ----------38.40%
Small Growth -----------------------------TR ----------------12-24-09 ---------34.45%
US Core -----------------------------------TR ----------------12-24-09 ---------27.45%
Large Cap ---------------------------------TR ----------------12-24-09 ---------25.88%
Large Core --------------------------------TR ----------------12-24-09 ---------22.68%
US Value ----------------------------------TR ----------------12-24-09 ---------19.43%
Large Value -------------------------------TR ----------------12-24-09 ---------12.54%
Other Domestic Stock Indexes
NASDAQ Composite PR -------------------PR -----------------12-25-09 ---------44.94%
S&P MidCap 400 --------------------------TR -----------------12-24-09 ---------39.78%
NASDAQ Composite PR -------------------PR -----------------11-23-09 ----------37.98%
Russell 2000 TR --------------------------TR -----------------12-24-09 ----------28.86%
S&P 500 ----------------------------------TR -----------------12-24-09 ----------27.70%
NYSE Composite PR --- -------------------PR-----------------12-25-09 ----------26.02%
DJ Industrial Average TR -----------------TR -----------------12-24-09 ----------23.74%
Morningstar Bond Indexes
Broad Market
Intermediate Core Bond -------------------TR -----------------12-23-09 -----------5.82%
Core Bond ---------------------------------TR -----------------12-23-09 -----------4.90%
Short-Term Core Bond --------------------TR -----------------12-23-09 -----------4.48%
Long-Term Core Bond ---------------------TR -----------------12-23-09 -----------3.38%
Corporate
Long-Term Corp Bond ---------------------TR -----------------12-23-09 ----------20.03%
Intermediate Corp Bond --------------------TR ----------------12-23-09 ----------19.67%
Corp Bond ----------------------------------TR ----------------12-23-09 ----------17.21%
Short-Term Corp Bond ---------------------TR ----------------12-23-09 ----------12.44%
Government Short-Term
US Govt Bond-------------------------------TR ----------------12-23-09 -----------1.33%
Intermediate
US Govt Bond -------------------------------TR----------------12-23-09---------- -0.87%
General US Govt Bond ----------------------TR---------------- 12-23-09 -----------2.41%
Long-Term
US Govt Bond -------------------------------TR ----------------12-23-09 -----------8.85%
Other
TIPS ----------------------------------------TR ----------------12-23-09 ----------10.82%
Mortgage Bond ------------------------------TR ----------------12-23-09 -----------6.03%
Other Bond Indexes
ML US HY Master II TR ---------------------TR ----------------11-30-09 ----------52.72%
BarCap US MBS TR --------------------------TR ----------------12-24-09 -----------5.99%
BarCap US Agg Bond TR ---------------------TR ----------------12-24-09 -----------5.95%
USTREAS T-Bill
Auction Ave 3 --------------------------------------------------- 11-30-09 -----------0.16%
BarCap US
Government TR -----------------------------TR----------------- 12-24-09 ----------2.06%
USTREAS T-Bill
Cnst Mat Rate 10 ----------------------------TR----------------- 11-30-09 ----------5.41%
Municipal Indexes
BarCap Municipal TR USD -------------------TR----------------- 12-24-09 ---------13.06%
Foreign Indexes
Hang Seng HSI PR HKD ----------------------PR -----------------12-03-09 ------1,100.69%
MSCI EM
Latin America USD ---------------------------PR ------------------12-25-09 --------95.06%
BSE SENSEX India INR ----------------------PR ------------------12-24-09 ---------79.95%
Shanghai SE Composite
PR CNY --------------------------------------PR------------------ 12-25-09 ---------72.53%
BSE SENSEX India INR ----------------------PR ------------------12-21-09 ---------72.08%
MSCI EM USD PR ----------------------------PR ------------------12-25-09--------- 71.80%
MSCI Pacific Ex Japan NR USD ---------------TR -----------------12-25-09 ----------67.56%
MSCI AC Far East Ex
Japan USD -----------------------------------PR ------------------12-25-09 ----------61.69%
MSCI EM LCL --------------------------------PR ------------------12-25-09 ---------56.89%
MSCI Hong Kong USD ------------------------PR ------------------12-25-09 ---------52.40%
Hang Seng Hong Kong Composite TR HKD ----TR ------------------12-24-09 ---------50.94%
DJ Malaysia PR USD --------------------------TR ----------------- 12-25-09 ---------45.30%
MSCI Europe NR USD ------------------------TR ------------------12-25-09 ---------34.90%
MSCI World Ex US NR USD ------------------TR ------------------12-25-09 ---------33.02%
MSCI AC World USD -------------------------PR ------------------12-25-09 ----------31.55%
MSCI EAFE NR USD -------------------------TR ------------------12-25-09 ----------31.08%
MSCI North America NR USD ----------------TR ------------------12-25-09 ----------29.60%
Euronext Paris CAC 40 TR EUR --------------TR ------------------12-24-09 ----------26.80%
MSCI Pacific NR USD -------------------------TR ------------------12-25-09 ----------23.92%
FSE DAX TR EUR ----------------------------TR ------------------12-23-09 ----------23.85%
MSCI Europe LCL ----------------------------PR ------------------12-25-09 ----------27.37%
MSCI World Ex USA LCL ---------------------PR ------------------12-25-09 ----------21.28%
Morningstar Global Equity
Indexes EM GR USD -------------------------TR -------------------12-24-09 ---------85.64%
Gbl Ex US GR USD ---------------------------TR -------------------12-24-09 ---------38.98% Developed Ex US GR USD --------------------TR -------------------12-24-09 ---------36.43%
Morningstar Commodity Indexes
Long-Only Commodity-----------------------TR--------------------12-24-09 ----------16.37%
Long/Flat Commodity -----------------------TR--------------------12-24-09----------- 2.81%
Long/Short Commodity ---------------------TR--------------------12-24-09------------4.85%
Short/Flat Commodity ----------------------TR --------------------12-24-09-----------6.40%
Short-Only Commodity----------------------TR--------------------12-24-09----------15.50%
The above returns are simple averages.
USD: in dollars
NR: net dividends reinvested
R: total return
PR: price change
LCL: in local currency
Let’s compare my portfolio to commodities, stock, and bond indexes around the world. Darnell’s Junk Bond Portfolio as of 12-24-09 is 52.62% YTD. According to most retail sales financial consultants working in American Brokerage Firms, they are only promising between 8% and 10% this year. None of the American indexes or the American funds out performed my Junk Bond Investments. Many of the Asian and Pacific funds and indexes did better than my portfolio. One bond index out performed my return. So did a Latin American Fund. But remember, the members of these funds have to pay fees so their net returns may not be as high as my net returns.
If you recall, I reported in my blog in January; a Financial Analyst said that investors should not invest in bonds because they will give a poor return. On Bloomberg TV, an Analyst complained that bond holders were made whole while other investors were not. He should have known this from Finance Class 101 in his first year of college. Here is the reason why investors can't rely on Financial Analyst working for brokerage firms. They do not have your interest first. They have the brokerage firms interest first, their interest second, while your interest is last. Only you have your interest first.
Answer this question; Would you turn your life savings over to any salesman that knocks on your door? People do that all the time then wonder why they loose their money!
Saturday, October 31, 2009
Corporate Power, The Series
Darnell’s Picks
Short Sell
First Solar (NASDAQ: fslr) shorting at $121.93, cover at $80. Darnell does not have a position in this security.
Buy Long
Kazakhstan Gold (Stock Symbol: kzg) recently traded at $8.28 on the London Stock Exchange. Darnell does not have a position in this security.
Non Investment Grade Bond
Smithfield Foods 7s08/01/2011 priced at $965.00, Standard and Poor’s B-, YTM of 9.23%.
Darnell does not have a position in this security.
I classify people by three types around the world. The first type is the elite. They are the people who own everything. They can tell governments what to do. The Trilateral Commission had its last meeting April 25 to April 26, 2009 in Tokyo, Japan. The next meeting will be in Dublin, Ireland, May 7 thru May 9, 2010. To find out more about this secret society see this site: http://www.trilateral.org/about.htm.
The secret society called the New World Order is made up of very powerful families around the world. See this site for more information:
http://educate-yourself.org/nwo/.
There are other even more secret societies around the world that work with these two organizations to bring about their view of future world government.
To get into these organizations, you have to go to the right Universities and meet the right people. The first President Bush’s father did just that. This allowed the president to join and work for these organizations. President Obama was recruited years ago and is now a leader in the trilateral Commission, appointing several members to positions in the organization. He has demonstrated to many world leaders that he has what it takes to be a world leader. I look for him to be front and center in a more centralized world government after he leaves office.
I am not passing judgement on what these organizations do. What I am telling you is that these are the people who run the world. They start and stop wars. They solve world problems to their advantage. They exist to serve their members interest.
The second type of person are the lawyers. They work for the governments and corporations owned by the elite. Anyone can rise to a position in government or business. You do not have to be a lawyer but you better have access to good competent legal help to be successful. Obama, a lawyer, started as a community organizer. He won a seat in his state legislator. Then he made it into the US Senate. After showing the elite what he could do as an organizer, he became President of the United States. He is now one of the elite.
CEOs and Presidents of large corporations are in this group. Many who run Wall Street and the large banks are members of this group. They are people who have demonstrated that they can run a business or industry. That does not mean that they can run it in the interest of employees or the country. That means that they have demonstrated that they can run it for the interest of its owners.
Third, most people around the world are retarded worker bees. I say we are retarded because most of us have not grown from our child stage of social development. It is not our fault. The lawyers and the elite do not want that to happen. Just like children, most of us live from day to day with no thought of what we want for our children or for society in general. We range from wanting to be rich but don’t want to do anything to get to that level, to not wanting anything but a handout.
We are lucky to get a job making enough money to pay for our living expenses. We have high living expenses because we allowed the media controlled by the lawyers to tell us that we can’t be happy with what we have. We need to buy more. Not only that, we have to borrow money that we can’t pay back to pay for the things we don’t need. That is why most of us say, "the more we work, the more we owe."
We are going to talk about what the retarded worker bees can do to become a lawyer type.
Part 2: Wanted: A New Type of Union
I did not grow up like most people. At 8 years old, I was already trying to figure out how to become rich. I started learning all that I could about the stock market. By 18 years old, I understood Generic Engineering and could have gown into that field while that field was just starting out. Instead, I went into the computer field that was also just starting out. Instead of hanging out on the corner with my friends, I was hanging out in the brokerage firms with the retired steel workers in downtown Pittsburgh, Pa. They thought I was young and funny so they did not mind telling me what they were doing in the financial markets. I was very happy to take notes. After getting my Associates in Applied Science Degree from Allegheny Community College at age 25, I was accepted at Robert Morris College in their Management program. While at Robert Morris, I wrote my first book, A Guide to Stocks and Bonds for the Beginner.
At that time, I met one of my corporate idles, Siggi B. Wilzig was the CEO of Wilshire Oil of Texas. Siggi found himself in a NAZI concentration camp in Germany. His crime according to the NAZIS, he is Jewish. After the war, his family and friends moved to Texas where he worked in the oil fields. In the 1950s, they decided to create the Wilzig Investing Group with the objective of acquiring Wilshire Oil Company. It took several years before they ran several members for seats on the board. The organization controlled 25 percent of the stock. They did not win.
However, management was impressed by their leadership. They knew that it was only a matter of time before they gain the voting stock that they needed to gain real influence, that they negotiated with the Investment Group. As a result, in the newly organized company, they gave the investment group four board seats. Later they approached Siggi Wilzig to be their CEO of the company. Siggi died in the 1990s. This story is on page 92 of the book.
If people want to stop companies from moving away from employees then the employees will have to start challenging the management of the company. Using stock is the only weapon that employees have. We have to take over the company for our own survival.
In the 1950s, 50 percent of the stock was owned by the public. Today, most stock is owned by institutions and mutual funds. Here is the reason why our jobs are leaving our communities and going to other countries. Institutions do not have families and have no ties to a community. Your public schools do not give you an education to protect your interest. They give you an education that preserves the interest of the elite.
Part 3: Creating Your Investment Club
You and your friends can take over a small company. If you want to have a club where interesting conversation takes place, people can work for a common goal, and you can look after family interest, create or join an investment club. To get started in creating your club, do the following:
1. Talk to your friends, coworkers, and relatives about creating a club. Make sure you have an objective in mind. That objective maybe to make money in the stock or bond market. Or you may have a small public company (take over target) that will be worth owning and making a living off of.
2. Read over the information in the Better Investing Website. http://www.betterinvesting.org/public/default.htm
3. Form your organization and create your bylaws based on the information from NAIC. Usually a club has 10 to 20 member. If you are creating an organization to take over a company, the more people you have, the more money you can raise.
http://www.ag.ndsu.edu/pubs/yf/fammgmt/fs583w.htm
4. Elect your officers and start conducting business.
Over the coming years, make your plan then work your plan!
Short Sell
First Solar (NASDAQ: fslr) shorting at $121.93, cover at $80. Darnell does not have a position in this security.
Buy Long
Kazakhstan Gold (Stock Symbol: kzg) recently traded at $8.28 on the London Stock Exchange. Darnell does not have a position in this security.
Non Investment Grade Bond
Smithfield Foods 7s08/01/2011 priced at $965.00, Standard and Poor’s B-, YTM of 9.23%.
Darnell does not have a position in this security.
******************************************************************************
The three types of people in the world.
The three types of people in the world.
I classify people by three types around the world. The first type is the elite. They are the people who own everything. They can tell governments what to do. The Trilateral Commission had its last meeting April 25 to April 26, 2009 in Tokyo, Japan. The next meeting will be in Dublin, Ireland, May 7 thru May 9, 2010. To find out more about this secret society see this site: http://www.trilateral.org/about.htm.
The secret society called the New World Order is made up of very powerful families around the world. See this site for more information:
http://educate-yourself.org/nwo/.
There are other even more secret societies around the world that work with these two organizations to bring about their view of future world government.
To get into these organizations, you have to go to the right Universities and meet the right people. The first President Bush’s father did just that. This allowed the president to join and work for these organizations. President Obama was recruited years ago and is now a leader in the trilateral Commission, appointing several members to positions in the organization. He has demonstrated to many world leaders that he has what it takes to be a world leader. I look for him to be front and center in a more centralized world government after he leaves office.
I am not passing judgement on what these organizations do. What I am telling you is that these are the people who run the world. They start and stop wars. They solve world problems to their advantage. They exist to serve their members interest.
The second type of person are the lawyers. They work for the governments and corporations owned by the elite. Anyone can rise to a position in government or business. You do not have to be a lawyer but you better have access to good competent legal help to be successful. Obama, a lawyer, started as a community organizer. He won a seat in his state legislator. Then he made it into the US Senate. After showing the elite what he could do as an organizer, he became President of the United States. He is now one of the elite.
CEOs and Presidents of large corporations are in this group. Many who run Wall Street and the large banks are members of this group. They are people who have demonstrated that they can run a business or industry. That does not mean that they can run it in the interest of employees or the country. That means that they have demonstrated that they can run it for the interest of its owners.
Third, most people around the world are retarded worker bees. I say we are retarded because most of us have not grown from our child stage of social development. It is not our fault. The lawyers and the elite do not want that to happen. Just like children, most of us live from day to day with no thought of what we want for our children or for society in general. We range from wanting to be rich but don’t want to do anything to get to that level, to not wanting anything but a handout.
We are lucky to get a job making enough money to pay for our living expenses. We have high living expenses because we allowed the media controlled by the lawyers to tell us that we can’t be happy with what we have. We need to buy more. Not only that, we have to borrow money that we can’t pay back to pay for the things we don’t need. That is why most of us say, "the more we work, the more we owe."
We are going to talk about what the retarded worker bees can do to become a lawyer type.
Part 2: Wanted: A New Type of Union
I did not grow up like most people. At 8 years old, I was already trying to figure out how to become rich. I started learning all that I could about the stock market. By 18 years old, I understood Generic Engineering and could have gown into that field while that field was just starting out. Instead, I went into the computer field that was also just starting out. Instead of hanging out on the corner with my friends, I was hanging out in the brokerage firms with the retired steel workers in downtown Pittsburgh, Pa. They thought I was young and funny so they did not mind telling me what they were doing in the financial markets. I was very happy to take notes. After getting my Associates in Applied Science Degree from Allegheny Community College at age 25, I was accepted at Robert Morris College in their Management program. While at Robert Morris, I wrote my first book, A Guide to Stocks and Bonds for the Beginner.
At that time, I met one of my corporate idles, Siggi B. Wilzig was the CEO of Wilshire Oil of Texas. Siggi found himself in a NAZI concentration camp in Germany. His crime according to the NAZIS, he is Jewish. After the war, his family and friends moved to Texas where he worked in the oil fields. In the 1950s, they decided to create the Wilzig Investing Group with the objective of acquiring Wilshire Oil Company. It took several years before they ran several members for seats on the board. The organization controlled 25 percent of the stock. They did not win.
However, management was impressed by their leadership. They knew that it was only a matter of time before they gain the voting stock that they needed to gain real influence, that they negotiated with the Investment Group. As a result, in the newly organized company, they gave the investment group four board seats. Later they approached Siggi Wilzig to be their CEO of the company. Siggi died in the 1990s. This story is on page 92 of the book.
If people want to stop companies from moving away from employees then the employees will have to start challenging the management of the company. Using stock is the only weapon that employees have. We have to take over the company for our own survival.
In the 1950s, 50 percent of the stock was owned by the public. Today, most stock is owned by institutions and mutual funds. Here is the reason why our jobs are leaving our communities and going to other countries. Institutions do not have families and have no ties to a community. Your public schools do not give you an education to protect your interest. They give you an education that preserves the interest of the elite.
Part 3: Creating Your Investment Club
You and your friends can take over a small company. If you want to have a club where interesting conversation takes place, people can work for a common goal, and you can look after family interest, create or join an investment club. To get started in creating your club, do the following:
1. Talk to your friends, coworkers, and relatives about creating a club. Make sure you have an objective in mind. That objective maybe to make money in the stock or bond market. Or you may have a small public company (take over target) that will be worth owning and making a living off of.
2. Read over the information in the Better Investing Website. http://www.betterinvesting.org/public/default.htm
3. Form your organization and create your bylaws based on the information from NAIC. Usually a club has 10 to 20 member. If you are creating an organization to take over a company, the more people you have, the more money you can raise.
http://www.ag.ndsu.edu/pubs/yf/fammgmt/fs583w.htm
4. Elect your officers and start conducting business.
Over the coming years, make your plan then work your plan!
Thursday, October 8, 2009
My Fourth Quarter Picks
I called the bottom of the junk bond market at the end of January 2009. Since then, the discounted bonds that I recommended making up my portfolio rose 33.62% while the Dow rose from 8,000.86 to 9,712.65 or 21.4%. Most of the bonds that I recommended in January have matured and I purchased bonds to take their place. The new bonds mature in 1 to 2 years. Here are my Fourth Quarter Bond picks as well as their recent prices, Yield to Maturities, and Ratings. The bonds on my recommended list are;
ALLIED CAP CORP NEW SR NT 6.625% 07/15/11
Price $832.50 YTM 19.455% Rating B1/BB
Total Return $359.75 for 21 Months.
AMERICAN GEN FIN CORP INCOME NOTES 4.050% 05/15/10
Price $871.98 YTM 17.39% Rating Baa3/BB+
Total Return $151.65 for 7 Months.
DOLE FOOD INC SR NT 8.875% 03/15/11
Price $100.00 YTM 8.875% Rating Caa1/CCC+
Total Return $125.02 for 17 Months.
HILTON HOTELS CORP NT 8.250% 02/15/11
Price $800.00 YTM 11.875% Rating NR
Total Return $310 for 17 Months.
MBIA INC NT 9.375% 02/15/11
Price $993.50 YTM 9.477% Rating Ba3/BB-
Total Return $131.50 for 16 Months.
These bonds are for investors. I am a believer in a “Buy and Hold” strategy for IRA and small speculators when purchasing stock. This way, a speculator can accumulate stock on a regular bases at a low price. As time goes by, the stock appreciates in value and the speculator sells years later at a high price. I still believe in purchasing Ford Motor Company at $7.50 or below.
Who should take advantage of this?
As most of you know, in the past 30 years more and more experience people have lost their jobs. Many of them have 401k or pension plans with tens of thousands of dollars in them. Many people are suddenly put in a position where they must decide in a matter of days where to put this money. I prefer to create self directed Individual Retirement Accounts (IRA) for this cash so that the money can be tax deferred until retirement. I also recommend buying discounted corporate bonds such as the ones I recommend to make money as well as protect capital.
Where should you go to create your IRA?
To create a self directed IRA where corporate bonds can be purchased, I suggest using a brokerage firm that deals in corporate bonds. The world is full of such brokerage firms. I use Zion’s Direct 1-800-524-8875 because of their large inventory of discounted corporate bonds. They are on the internet at: https://zd.zionsdirect.com/
ALLIED CAP CORP NEW SR NT 6.625% 07/15/11
Price $832.50 YTM 19.455% Rating B1/BB
Total Return $359.75 for 21 Months.
AMERICAN GEN FIN CORP INCOME NOTES 4.050% 05/15/10
Price $871.98 YTM 17.39% Rating Baa3/BB+
Total Return $151.65 for 7 Months.
DOLE FOOD INC SR NT 8.875% 03/15/11
Price $100.00 YTM 8.875% Rating Caa1/CCC+
Total Return $125.02 for 17 Months.
HILTON HOTELS CORP NT 8.250% 02/15/11
Price $800.00 YTM 11.875% Rating NR
Total Return $310 for 17 Months.
MBIA INC NT 9.375% 02/15/11
Price $993.50 YTM 9.477% Rating Ba3/BB-
Total Return $131.50 for 16 Months.
These bonds are for investors. I am a believer in a “Buy and Hold” strategy for IRA and small speculators when purchasing stock. This way, a speculator can accumulate stock on a regular bases at a low price. As time goes by, the stock appreciates in value and the speculator sells years later at a high price. I still believe in purchasing Ford Motor Company at $7.50 or below.
Who should take advantage of this?
As most of you know, in the past 30 years more and more experience people have lost their jobs. Many of them have 401k or pension plans with tens of thousands of dollars in them. Many people are suddenly put in a position where they must decide in a matter of days where to put this money. I prefer to create self directed Individual Retirement Accounts (IRA) for this cash so that the money can be tax deferred until retirement. I also recommend buying discounted corporate bonds such as the ones I recommend to make money as well as protect capital.
Where should you go to create your IRA?
To create a self directed IRA where corporate bonds can be purchased, I suggest using a brokerage firm that deals in corporate bonds. The world is full of such brokerage firms. I use Zion’s Direct 1-800-524-8875 because of their large inventory of discounted corporate bonds. They are on the internet at: https://zd.zionsdirect.com/
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