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  • John Hussman: The Delusion Of Perpetual Motion [View article]
    This is happening in Japan already. The Japanese government pension plan is now buying stocks like there is no tomorrow and selling the Japanese government bond back to the central bank (because no one else will buy them). So it is like the central bank is buying all the stocks.
    Jul 1 08:27 PM | Likes Like |Link to Comment
  • John Hussman: The Delusion Of Perpetual Motion [View article]
    I like simple ideas and methods to look at complicated situations. The simple problem today is what are you going to do with your money with all the BAD choices in front of you. The answer is that you have to pick the best out of all the BAD options.

    In the late 80's I was with a company in the south where discrimination is the norm. A VP of marketing (the only woman in the top 20% of the company) was lay off or fired. She immediately took a part time job that paid her like 40% of what she use to made. People in the company comment that she should not have done that. She is smart enough to know unless she move to another area she is not going to find another job that will pay her well. She pick an option out of all BAD options in front of her.

    All I am saying is putting money in the stock market now is the best option out of bond, cd, cash, gold etc. It has already been the best outcome in the last 5 years. Just in 2014 the return in SPY is about 7%. If you cash out now it beats your investment in say 3 year treasury for the next 3 years.

    No one can predict what the market will do tomorrow. But I can say for 99% certainty that interest rate in US, EU and Japan will not go up much in at least the next 6 months. So I am going to take the BAD decision of 80% invested in stock.
    Jun 30 01:42 PM | 2 Likes Like |Link to Comment
  • RadioShack Is Not As Bad As Everybody Thinks [View article]
    I am going to add my 2 cents using my usual common sense on the street observation.

    I have purchase a lot of stuff from Radio shack in the past and I have not even step into their store in the past 5 years. One of the reason why I use to visit them was they carried some stuff that normally hard to find in other stores. That is no long true and they almost never have good prices.

    There is nothing they can do to attract me to step into their store now and I am going to buy online or at Fry electronic.
    Jun 27 01:06 AM | Likes Like |Link to Comment
  • The Best Passive Retirement Strategy In The World [View article]
    In general I think this is a very good strategy.
    I plan to use some similar strategy once my wife retired.
    The more money you have to spare the more you should use this type of passive strategy.

    I added one complication to the plan. Instead of just spending the said 75K I have 2 buckets for expenses. One bucket I established when you retired for extra traveling or hobby expense you want to do in the first few years of retirement when you are still very healthy and able to do a lot of thing. This bucket of money is not needed for any future considerations. Another bucket is what I call my current expense bucket. It is like the 75k you are spending each year. This bucket is want you can spent this year and if there is left over you move them into the first bucket for any extra spending. Also instead of the fix 75k I have an amount adjusted by inflation and also by age (using life expectancy tables)

    For most people you also have social security that pay you a big part of your expense and it is adjusted for inflation also. If you are careful you do not need to be that conservative about investing in the stock market.

    Example. A couple at 70 may have say 60,000 from social security. Let say you want to have 120000 to spend a year and you only need 60000 more from your other funds. At this level if something really bad happen in the stock market you can probably cut back your expense to 90000 a year and still not a really big problem that you cannot handle. What I am saying is that you may be in a situation you can afford more risk than you think.
    Jun 27 12:57 AM | 1 Like Like |Link to Comment
  • Multi-Generational Dividend Investing [View article]
    I already gave my children what they need to be successful in life by teaching them since they were a baby and provide all the opportunities in their education. I feel very good about the result and have no worry about leaving them anything. If I out live my wife I would give 50% of my money to charity and split the rest among all my grand children in a trust that they can take all their money when they are 40 years old.
    Jun 25 02:06 PM | 2 Likes Like |Link to Comment
  • Why This Bear On IBM Is Moving Toward A Bullish Posture [View article]
    Let me suggest you read some comments about IBM voice by their current employee and those who have left. If IBM is a fast food chain then it is fine to treat employee like dirt. There are now 9 tech companies amount the top 25 companies that employee like to work for. IBM use to be one of them and now they are at the bottom of the list for tech companies.

    IBM stock price will not drop that much in the next 2 years due to its selling of businesses and buy back of stock and increase in dividend. Sometime 2 to 5 years from now I predict I might buy some puts on IBM.
    Jun 25 01:55 PM | Likes Like |Link to Comment
  • John Hussman: This Time Is Different, Yet With The Same Ending [View article]
    There are many reason why I do not see a bear market coming in the next 2 years unless something very unexpected happen like a full scale war in the middle east and the US is stupid enough to get in again.

    The US, Japan and the EU all have their central banks maintaining a very low interest rate. The EU today has a negative rate which is unheard of in my life time. China is also in no position to keep money too tight (then the RMB will appreciate too much and hurt their exports) That covers about 70% of all investment opportunities. Return on investments are related to each other (modern portfolio theory) and that means money will continue to flow into stocks even when yields are very low. Japan is now selling their bonds and buying stocks for their pension funds and that is going to support the stock market globally.

    Here in the US the top 20% are doing very well today and their income is growing significantly more than the average and they are the one that has money to invest and buy stocks. People keep talking about the average wage or income for the US is not growing much but they forget the income for those who have money to invest are growing at a good rate. (remember the average is 20k and the medium is 80k for account size)

    The situation in other countries are even worst for the average as compared to the top 20%. What that means is there are more money flowing into investment than good opportunities. The fact that in general oversea companies especially in Japan are adding to their cash and not spending them tells me the demand for stock is not going away soon.

    As for me I am conservative with my retirement funds. (I do gamble a lot with my trading account) A couple months ago I cut my 100% stock holding down to 80% and I have a hard time finding a good place to park the cash. The only reasonable return are in the short term muni. So it is sitting there idle.

    The only thing I am watching closely is the interest rate. If there is significant change to the up side I will adjust my asset allocation. I can see 2 years from now I would be putting more money into CD or 2 year treasuries. Today I would take my chance with the stock market.
    Jun 25 01:18 PM | Likes Like |Link to Comment
  • Consumer Confidence Hits Best Levels Since 2008 [View article]
    In the last 6 years those who own a house and lots of stocks have done very well. Those who have very little assets and are looking at their wages have not gain much (other then it is easier to find a job now then a few years ago).
    Example. You have a house $300,000 (say with $200,000 mortgage) and $500,000 in stocks in 2007. By 2009 your house worth only $200,000 and your stock worth only $250,000 and your net asset fall from $600,000 down to $250,000. Today you are looking at the house worth $280,000 and your stock worth $650,000 and your net asset is $730000.Your net asset is now about 3 times the low in 2009. But for the one that only look at their wages they have no gain at all. (my wife's wage do not keep up with inflation since 2007)
    Jun 25 01:18 AM | Likes Like |Link to Comment
  • John Hussman: This Time Is Different, Yet With The Same Ending [View article]
    Actually the author has some decent numerical analysis of the historic data. I have read a lot of his articles in the past 6 years. His projection of the stock market return for the next 10 years are a little bit on the bearish side but are statistically ok.

    At the bottom of the market in 3/09 he is projecting a 10% yearly return for the next 10 years assuming a 4% yield. He stated that return will be higher if yield is lower than 4% and will be lower if the yield is higher than 4%. I would have a 12% yearly return projection at that time but also a significant chance it may go down further. (That is why I never buy at the bottom I always waited for 15% recovery before I jump in) If I ignore the chance of further drops even a 10% return would have been enough for me to suggest 100% stock allocation. For some reason the author is always bearish and in his "comments" always stay on the bearish side.

    His projection of 2% increase for the market in the next 10 years is also not an extremely bad prediction. I would have predicted it to be 4% which is low for historic performance. I also do not see a bear market coming in the next 2 years. He is also correct by saying there is no better place to invest your money. Out of all the low returns I choose 80% in the market right now and is willing to cut it down to 70% if things do not fall the way I projected.
    Jun 24 09:56 PM | 2 Likes Like |Link to Comment
  • John Hussman: This Time Is Different, Yet With The Same Ending [View article]
    I am not talking about other countries. You could have pick a lot of other countries and their stock market was destroyed completely by war. If you own stocks in Japan and Germany before world war 2 you could lose everything.
    Jun 24 09:42 PM | 1 Like Like |Link to Comment
  • John Hussman: This Time Is Different, Yet With The Same Ending [View article]
    I am not talking about any sector like NASDAQ. I am talking about the general market like SPY.
    Jun 24 09:41 PM | 3 Likes Like |Link to Comment
  • Will Apple And Amazon Take Down Sirius XM? [View article]
    It is the technology that decide the winner and loser.
    Internet audio streaming will beat Sirius XM radio. In a few years most cars will have internet either directly or via your phone. I cannot think of any reason why anyone would want to pay to have audio via Sirius XM.
    Jun 24 12:33 PM | 2 Likes Like |Link to Comment
  • John Hussman: This Time Is Different, Yet With The Same Ending [View article]
    When I read this article it seems like he is saying he was right in the past. Then I read the comment about him saying major market correction years and years and it never comes. So I try to look up his past articles.

    At the bottom of the bear market when stocks are extremely undervalues here is what he said.

    Excerpt from the Hussman Funds' Weekly Market Comment (3/16/09):
    In any event, it is difficult to view stocks as being extremely undervalued unless we assume a sustained return to the unusually elevated profit margins of recent years.

    Excerpt from the Hussman Funds' Weekly Market Comment (4/20/09):

    The current bounce was fueled by a combination of deteriorating but “less bad than expected” economic reports (therefore counting as “upside surprises”), as well as what can only be considered misleading and semi-fraudulent earnings reports from distressed financial companies (the CEOs of these companies should be careful, because Bernie Ebbers is their poster child). Overall, the picture looks a lot like the bounce we observed in May 2001 (just before unemployment shot up and the market plunged again to fresh lows),
    Excerpt from the Hussman Funds' Weekly Market Comment (10/19/09):

    In reviewing the status of the market late last week, the condition of the data was something of an anomaly in that regard. On the valuation front, stocks are presently overvalued, but to levels that we've observed at least several times in history. The anomaly relates to market action, where we can no longer find a single historical instance where stocks were more overbought on the combination of short- and intermediate-term measures we respond to most strongly. Indeed, only one instance comes close, which is November 28, 1980.

    Excerpt from the Hussman Funds' Weekly Market Comment (7/26/10):
    My basic concerns are the same here. Investors who will need to fund specific expenses within a short number of years - retirement needs, tuition, health care, home purchases etc - should not be relying on a continued market advance. If your life plans would be significantly derailed by a major market decline, get out.

    Excerpt from the Hussman Funds' Weekly Market Comment (11/26/12):

    In the day-to-day focus on the “fiscal cliff,” our own concern about a U.S. recession already in progress, and the inevitable flare-up of European banking and sovereign debt strains, it’s easy to overlook the primary reason that we are defensive here: stocks are overvalued, and market conditions have moved in a two-step sequence from overvalued, overbought, overbullish, rising yield conditions (and an army of other hostile indicator syndromes) to a breakdown in market internals and trend-following measures.

    I am 100% sure he will be right someday and then he will tell me I told you so. But in the mean time he miss almost all the gains in this bull market. I am sick and tired of reading this kind of reports and I am sorry for those who follow them and miss the whole bull market.

    The truth is you can lose 50% in a major bear market and they always recovered within a few years. But if you lose 200% gain in a bull market you will never recover unless the market dropped by 70%.
    Jun 24 12:20 PM | 9 Likes Like |Link to Comment
  • Algorithm Predicts That Amazon Is Still Hot, Even If The Fire Phone Goes Up In Smoke [View article]
    I give it 0% chance for this phone to be successful.
    It offers nothing unique to Amazon users that is really useful. I use amazon a lot and I have never use my phone to order anything.
    Jun 24 03:19 AM | 2 Likes Like |Link to Comment
  • Cutting My Dividends By 35% - Improving My Dividend Growth Portfolio [View article]
    It is very simple.
    If interest rate is low stocks with high dividend yield will out perform those with lower yield and higher growth.
    If interest rate is high the opposite is true.
    Jun 24 03:12 AM | Likes Like |Link to Comment