Friday, March 4, 2011

The Friday Fade

I'm tired. It's cold. Nothing is happening.

Ms. Market is dancing on the table again after a brief rest. Krypto has no new orders, but she seems to be getting ready to sell some European stocks (which are up a bit as the Euro rallies). She's also getting ready to sell some RE stocks. Taken together, the sell signals are strong enough, but that's not how the Krypto Fund works. She buys and / or sells on an individual asset class basis. We wait for higher prices and will monitor the numbers more often.

The unemployment claims numbers showed strong improvement. Let's see the jobs numbers today. Despite the inflation screechers who want to crucify the American worker on a cross of green (or gold), Battleship Ben's quantitative easing program has and is producing good results since it was announced last August. Job losses had fallen, job growth is better (but still lousy), and fear of a double dip recession vaporized under his heavy shelling. Keep it up, Ben. Fire away!!!

Investment Lessons

First, notice that headline is Investment lessons, not trading lessons. The time horizon is years, not months or days or minutes.

Second, this is what I DO, not just what I SAY. Krypto Fund contains the majority of my net worth and these writings explain how I manage it - my own money. The Krypto Fund produced good long term results over the decades, including riding out the tidal waves of the Panic of 2008 and the 2000 Tech bubble. I have learned over the years not to second guess Krypto - the personification of my fund computer model that embodies my investment rules. Or is that dogification? Krypto is one of my dogs; she will lief* work for dog biscuits. [*Word of the Day]

Third, the objective is to do a wee bit better than average for the long term. Average is really very, very good. Most people's investment returns are way below average. They are the fodder for the Wall Street and Hedge Fund hogs. Be a winner, not a loser.


1. Manage a portfolio of the seven major asset classes.
2. Diversify across the asset classes.
3. Add / remove funds using time diversification.
4. Buy low, sell high; sell high, buy low.
5. Minimize fees.
6. Minimize taxes.
7. Obey the machine.

Rule #1 - Implementation.

There are seven major asset classes for the individual to use; one asset class has three parts.

1. Cash (aka money market funds or savings accounts)
2. TIPs aka Treasury Inflation Protected securities
3. Fixed income - bonds of various types.
4. US Stocks
5. Foreign stocks (three parts: Europe, Pacific and Emerging Markets)
6. Real estate
7, Gold & silver and precious metal stock funds

That's enough for now. More next week.

Word of the Day

"Lief" - adverb [$10] archaic; appears often in Shakespeare, but also was common in the Irish dialect of the common people in the 1907 play of J. M. Synge, Playboy of the Western World .
Lief means gladly, willingly (usu. had lief, would lief)
Sentence: To paraphase Wimpy of the Popeye cartoons, Krypto would lief manage the fund next neek for a dog biscuit today.

Shakespeare, As You Like It, Act IV, scene I, Rosalind to Orlando:
Nay, an you be so tardy, come no more
in my sight: I had as lief be wooed
of a snail.


Bud said...

you seem to be missing a couple major assett classes......private equity.........and triple inverse etf's

Bud said...

Bman should the dollar go back to the gold standard ???

cuz the way it's goin right now............a hot dog and a coke gonna cost 88 dollars soon

let it fall my ass

Bud said...

i will be doin a comprehensive inflation check this Publix. whole foods. the fresh market

1.99 lb chicken my ass

Bunkerman said...

good jobs number

keep firing, Ben

QE2 is working.

Bunkerman said...

private equity is just leveraged US stocks - a tax scam

venture capital is investing in start-ups; could be a small part o fUS stock investments, but is not suitable for most people.

Bunkerman said...

gold standard - nope, not enough.

Economic cycles under gold were very, very bad.

Can still get credit bubbles, etc.

Spin-em said...

Bunk..have you figured out your 4 #1s for the March Madness pool?...can you give a hint??

Bunkerman said...

spin, I know nada about college roundball.

I'd put Ohio State at the top out of loyalty (assuming they are in the tournament).

Otherwise, the only time I entered such a pool, I picked teams by names: cool animals, bravery, military, etc.

Spin-em said...

lool Bunk.....take Arkansas Pine Bluff +33

lot less traffic on the road to this drivers eye.....