lotstodo
aka "The Jackal"
So it's almost the end of the year, and barring any moves by al qaeda, I'm guessing that the investing year is about done. What a year it's been. The major indexes have been almost exactly flat. The FED has meddled to the point that nobody knows the true value of anything, not even Treasury Bills. The EU is falling apart at the seams, and the US is artificially supporting the EURO. The Housing market is entering it's fifth year of depression and we just learned what most of us knew anyway, that we are being lied to about inventory and sales. The American Public underwrote almost every mortgage in the country this year. Companies continue to show modest profits on pinching every penny, and putting that penny away for a rainy day. Consumer spending has shown what is believed to be temporary improvement after 4 years, mostly because their cars are worn flat out. We are still burning food for fuel. The Government can't pass a budget for three years now. Inflation will exceed GDI for the second year in a row. This year it's double GDI.
Why am I saying all of this? Because I am embarrassed to say that I am actually proud that my investments beat inflation this year. Not by much mind you, but I beat inflation. That would normally cause me great consternation, because I have mostly been a John Neff style contrarian all of my life. If I can't make 8% easy I screwed up big time. I have looked for well run companies in beaten down sectors and bought them for the long run. I've bought mutual funds with a bunch of "B" bonds in them, because in a world where all of the big boys have stellar credit, these guys have far better credit than the average home buyer and the bonds paid interest that at least kept up with inflation. "Long run" now is maybe until the next FED Open Market Meeting. So welcome to the new paradigm, where the actual value of a company is the most worthless piece of information you can hold if you want to make money on their stock. So you balance that with those Bonds, right? For the last year bonds have moved in concert with the markets because of the level of manipulation by the FED. Actually both the Stock Market and the Bond Market are being manipulated by the governments of the US and Europe. The most valuable piece of information this year has been to know which days Bernanke will speak so you can sell the day before and buy the day after. Or buy the day before and sell the day after. At least you have a 50-50 chance by guessing whether his speech will impress or disappoint the target audience, an audience now more likely to be the voter than the economist or investor.
A monkey with a dart board could have probably done as well as I did this year, but by golly, I'll take it. I can't wait until we have a new President and a new direction. I can't wait until the government stops manipulating the bond and stock markets and lets companies get back to doing what they do best, and that's growing the economy. Please Dear God, let 2012 be the last year of the insanity.
Why am I saying all of this? Because I am embarrassed to say that I am actually proud that my investments beat inflation this year. Not by much mind you, but I beat inflation. That would normally cause me great consternation, because I have mostly been a John Neff style contrarian all of my life. If I can't make 8% easy I screwed up big time. I have looked for well run companies in beaten down sectors and bought them for the long run. I've bought mutual funds with a bunch of "B" bonds in them, because in a world where all of the big boys have stellar credit, these guys have far better credit than the average home buyer and the bonds paid interest that at least kept up with inflation. "Long run" now is maybe until the next FED Open Market Meeting. So welcome to the new paradigm, where the actual value of a company is the most worthless piece of information you can hold if you want to make money on their stock. So you balance that with those Bonds, right? For the last year bonds have moved in concert with the markets because of the level of manipulation by the FED. Actually both the Stock Market and the Bond Market are being manipulated by the governments of the US and Europe. The most valuable piece of information this year has been to know which days Bernanke will speak so you can sell the day before and buy the day after. Or buy the day before and sell the day after. At least you have a 50-50 chance by guessing whether his speech will impress or disappoint the target audience, an audience now more likely to be the voter than the economist or investor.
A monkey with a dart board could have probably done as well as I did this year, but by golly, I'll take it. I can't wait until we have a new President and a new direction. I can't wait until the government stops manipulating the bond and stock markets and lets companies get back to doing what they do best, and that's growing the economy. Please Dear God, let 2012 be the last year of the insanity.
