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  • My Dividend Portfolio: Adding Wells Fargo [View article]
    Wells Fargo is an excellent company and I wanted to add it long ago. However, until the government stops using banks as ATMs, I won't buy any. By the way, what do they do with all of that settlement money?
    Mar 17, 2015. 01:51 PM | Likes Like |Link to Comment
  • Bill Gross: Going To The Dogs [View article]
    I have been doing what you suggest for the past three years -- buying good value for growth -- and I am worn out. I would have made more money in index funds.

    So why did I not buy index funds? I attempted, mostly successfully to mitigate risk via constant surveillance of individual stocks, because I no longer trust our government or the ECB. When I heard Greenspan say in a TV interview that he was shocked, shocked!, when a staffer told him the percent of sub prime mortgages, I was dumfounded. Then, Bernake said at the height of the meltdown that banking issues would not infect the rest of the economy, I knew that the denizens of Washington lived in an alternative universe. Finally, having read Rogoff and Rinehardt, I realized that this time would not be different.

    Templeton seeded his fortune following the second, not the first, stock market meltdown during the Great Depression. I am betting that we will have that opportunity in the not too distant future. Rogoff and Rinehardt said that recovery from a credit bubble usually takes a decade. We are not there yet.
    Mar 16, 2015. 10:56 AM | 8 Likes Like |Link to Comment
  • Bill Gross: Going To The Dogs [View article]
    Exactly. My grandmother had more sense than the US government. If you can't put down a healthy chunk of change, you can't afford the house!

    When I saw a story about Asian immigrants paying $800,000 for a 1950's rambler in LA, I knew it was time to head for the hills.
    Mar 16, 2015. 10:35 AM | 3 Likes Like |Link to Comment
  • Can You Profit From Prisons? [View article]
    It's a good thing that water balloon fights were not considered criminal activity when I was in college. During senior week, my sorority sisters decided that it would be fun to invite a local fraternity for dessert. When they arrived, the girls pelted them with water balloons. The campus police stood near by laughing. These days they would have donned riot gear and called in swat teams.

    If we had been taken off to jail and charged with disruption of the peace, how many of the girls would have gone on to good jobs -- doctors, lawyers, corporate VPs, journalists -- among that class. My concern about jail time for trivial offenses also is the difficulty in getting good jobs with an arrest record.
    Mar 16, 2015. 09:32 AM | 1 Like Like |Link to Comment
  • Can You Profit From Prisons? [View article]
    No. It's not their fault. They are meeting a need. But I am suggesting that the need is exacerbated by corruption. Just as some people won't buy tobacco stocks, I eschew prison corporations.
    Mar 16, 2015. 09:00 AM | Likes Like |Link to Comment
  • Bill Gross: Going To The Dogs [View article]
    What happened to basic and common sense borrowing? In this case, a strengthening in the 1990's of the Community Reinvestment Act which forced banks to give mortgages to people who could not really afford a home. The old rule that if you couldn't put 20% down, then you should defer the purchase of a house went away. The CRA allowed bank regulators to score banks based on how well they were meeting community credit needs. Without an acceptable score, a bank could not merge or grow branches.

    Taken together with the repeal of Glass-Stegall in 1999, which separated commercial and investment banking, and you had the makings of catastrophe, which we had, when banks became infected with losses in securities tied to mortgages.

    The government is capable of infinite mischief because of ignorance, social engineering, and vulnerability to lobbying by special interest groups. I doubt that our founders ever imagined the scope of government that we have today. We are safest when Congress is in recess, and the government is shut down due to snow.

    Gross nailed it. I would hate to be a bond manager at this point. What to buy?
    Mar 15, 2015. 09:11 AM | 46 Likes Like |Link to Comment
  • Lessons From Another Tough Week And The Big Day Ahead [View article]
    Great summary.
    Mar 14, 2015. 11:39 AM | 1 Like Like |Link to Comment
  • Can You Profit From Prisons? [View article]
    I am not a liberal. I am a conservative. I believe that the law must be respected, not used for corporate gain. I live in a state that has seen numerous offenses and over reach by law enforcement. A few examples:

    1. At the prison in Morganton, NC, a mentally ill and brain damaged inmate was held in solitary confinement for more than two years. Despite the warnings of a prison psychologist that he was rapidly deteriorating, nothing was done. The inmate set fire to his cell, whereupon outside the view of security cameras, the guards beat him to the point that he was rendered paraplegic. He later died from his wounds. Punishment of the guards - none.

    2. Two inmates serving life sentences in North Carolina were recently released when the Innocence Project found that exculpatory evidence had been withheld by prosecutors. Penalty for prosecutors - none.

    3. The Duke Lacrosse case.

    4. In New Brunswick County, NC, parents called police to help subdue their mentally ill, psychotic teenage son so that they could get him to the hospital. The skinny teen was wielding a small knife. As two officers attempted to restrain him, a third officer arrived, said "I don't have time for this," and shot the kid at point blank range. At least in this case, he has been found guilty of voluntary manslaughter.

    5. Probable cause for being subjected to a sobriety test at a DUI check point -- not being able to find car registration "fast" enough.

    6. In my state, 25% of black men between the ages of 18 and 24 are in jail. Why?

    7. Two kids having a water balloon fight on the grounds of a local middle school were arrested and jailed.

    8. A 15 year old borrowed his neighbor's bike with his permission and when he did not return soon enough for the neighbor, he called the police. When the kid returned, he was charged with theft, jailed and put on probation by a judge. Lacking transportation, he could not get to probation reports, so he voluntarily went to jail for six months.

    Shall I go on?
    Mar 10, 2015. 11:34 AM | 2 Likes Like |Link to Comment
  • Can You Profit From Prisons? [View article]
    I agree. The US has the highest incarceration rate in the developed world and the most corrupt criminal justice system. When the government and private corporations unite to feather each other's nests, and citizens are compelled to abide by their dictums, you have a fascist society.

    The criminal justice system has become a cash cow for municipalities, police departments, prosecutors' offices, courts and prisons, (and prison companies) and a means of securing their employees' government jobs, outlandish pensions and political power. Probable cause has become anything a police officer says it is. People are arrested for minor offenses, then are jailed, fined, or held for trial. And now people who end up in jail are required to pay a fine for their daily food and housing. Sometimes those fees exceed their incomes. Even homeless people, usually mentally ill, are fined for loitering. In my county, we have no public psychiatric hospital but a state-of-the-art court house, jail and prison.

    If you don't believe me, then go spend the day sitting in your county courthouse. It is a mill.

    Last year, Ferguson, Mo. police generated $3 million in fines. Though shocking given the size of Ferguson, it is a pittance compared to other cities.

    Therefore, I will not invest in a prison company because they are profiting from corruption and are part of the fascist equation. There are many other options.

    Mar 6, 2015. 12:07 PM | 8 Likes Like |Link to Comment
  • The Perfect Stock To Build A Retirement Portfolio Upon At Any Age [View article]
    That's what I thought. However, sometime during the worst of the market collapse I walked through the biggest mall in our city. Apple was packed. The rest of the stores had almost no traffic. Peter Lynch once advised to go the mall and look around. If I had heeded his advice, I would have doubled up on Apple.
    Mar 6, 2015. 10:59 AM | 10 Likes Like |Link to Comment
  • Why Emerson Electric Returns 7% Per Year For Long-Term Dividend Investors, Despite Low Oil Prices [View article]
    For that reason, I bought it. One of the few reasonably valued companies now.
    Mar 3, 2015. 05:25 PM | 3 Likes Like |Link to Comment
  • Weighing The Week Ahead: Help For The Economy From Housing? [View article]
    If the parents of a family of four earn one penny more than $93,000, they lose ACA subsidies. Total cost - $20,000 for premiums and deductibles - will prevent them from moving up in housing.

    Unless you are a STEM grad, the chance of getting a well-paying job is nil. Just ask my niece's classmates from Yale '14 who are working at Starbucks while trying to meet student loan obligations. Marriage, household formation, and mortgages are a distant dream. With Boomers remaining employed to pay their bills in this era of low interest rates, opportunities for youngsters are few and far between. Few corporations are willing to spend a nickel on training and post jobs requiring three to five years experience. The already employed are passing around jobs among themselves.

    But as Gladwell pointed out, those who graduated from college or professional school during the Depression, failed to gain career momentum for a decade and never recovered lost income. This time is not different.
    Feb 22, 2015. 02:47 PM | 3 Likes Like |Link to Comment
  • If You Listen Carefully, The Bankers Are Actually Telling Us What Is Going To Happen Next [View article]
    When Greenspan found out how many mortgages were sub-prime, he said that he was shocked. That inspires confidence. If he didn't have the facts, then who did?
    Feb 10, 2015. 05:49 PM | 5 Likes Like |Link to Comment
  • If You Listen Carefully, The Bankers Are Actually Telling Us What Is Going To Happen Next [View article]
    The Community Reinvestment Act was signed by Bill Clinton, which required banks to do sub-prime lending. Bush tried numerous times through Congressional committees to rein in Fannie and Freddie, to no avail. At one televised hearing, Barney Frank sweated bullets large enough to see on the screen because he knew that both were corrupt, but controlled by Democrat power brokers, most of whom were paid more than $1 million a year to participate in a catastrophe.

    But there was plenty of blame to go around. Will never forget the sight of Vietnamese immigrants considering the purchase of a rundown, 50's rambler for $800,000 in some over-priced and hideous LA suburb. When I saw that, I got out of the market.

    Rogoff and Reinhardt said that after a credit blow up, it takes a decade to recover. We are only a little more than half way there.
    Feb 10, 2015. 05:48 PM | 7 Likes Like |Link to Comment
  • The Dividend Growth Investing Mindset [View article]
    Your comments remind me of the travails of a friend, a single woman, who I cannot convince to adopt the dividend growth strategy. She is so frightened of her own incompetence that she turns her money over to managers, and refuses to learn. They love to sell her complicated products for big commissions. Last year her advisor sold her some kind of global real estate package then charged her an 8% commission, thus gobbling several years of dividends, on top of the advisory fee. I told her that if she were convinced of the need to own global real estate, then she should buy an ETF and pay .35%. Of course, she had no explanation for owning such a thing. I will not name the company that this guy worked for, as you would expect more from him, since the bank has a fine reputation. Same company, we found out after her death, churned a family member's account every quarter, once again charging her loads for their mutual funds on top of the advisory fees. That's how you ethically treat a 92 year old woman.

    As a result, I believe in doing the hard work of selecting great companies with growing dividends and calling it a day.
    Feb 10, 2015. 05:15 PM | 9 Likes Like |Link to Comment