HAPPY NEW YEAR 

Charts and tables up. I've been locked in a death struggle with a virus or two for the last two weeks. I'm still alive AND slightly less miserable. So there may be a future in which I can see across the room and get up and walk there without taking a nap before and after. Or maybe not. Screw it. I'll have all the time in the world to rest in about 45 years. I'll catch up then. In the meantime, there's a ton of updating and new stuff to do on the site for the new year. I'll post updates here as I make progress. There's a new entry on the COFGBLOG ESSAYS page of the site, there'll be an update to the downloadable EXCEL spreadsheet, more stuff on the REFORMING A PENSION FROM THE INSIDE page, and I gotta get together a primer on HOW TO FIGURE OUT WHAT JOE FACER'S DOING AND WHY IT WORKS FOR HIM (and what makes you different and how that would affect what you'd do if you wanted to do something like it). Stay tooned for more stuff to appear this weekend.

I've gotten a lot of housekeeping stuff done as of 1/1/06 noonish. I've editted almost every page. There's more to come...

Cap gains have been paid and posted to the 401a accounts. The charts have dealt with it and they look like they are supposed to without the cliffs at the end of the year. The B/P Fund did pretty well this year and set the crossbar up pretty high for self management. I'm pleased with where I stand. But I'm not that pleased...

Goals in investing can be dangerous. That's how all these famous hedge fund blow ups like Long Term Capital and Amarenth happen. Someone figures out a system to make money regardless of how the market does, they open up a hedge fund, and they promise high returns to smart money(meaning BIG money that demands quality active investment and real returns rather than excuses). They either name a figure or their strategy gives them superb results for a while. The funds seem to end up levering up big at some point because they either sense the chance to score big or because otherwise they won't meet their promises or match their records and smart money does't stick around to hear the excuses, it walks. And the hedge funds get handed their head by the market just like it does to everyone every so often. The hedge fund and the partners lose money, the partners take their money, if there's any left and walk, the funds close up shop and careers end. The markets are like the ocean. You can be smart about currents and winds and you can make the most of what you've got to work with and at times shine like a star. But you always have to remember that there will be times when being still afloat with almost all of what you had last year will be a brilliant victory. Take it and be proud of still being in the game. The goal I have is to do the smart thing as often as I can and make good progress whenever the wind is at my back, and if what I'm doing isn't working, stop doing it before I get hurt too badly and figure out what will work. I try hard to make money and I try hard to break even as the alternative. I try to be allergic to losing any money When I first looked at this year's numbers, I was disappointed.

So after all that setup, was last year a huge disaster? Nah. Over the last two and a quarter years, I've gotten 9%,13% and 11% returns. The 9% return over 4 months was not half shabby. The other two full year's returns were pretty damn good. The Balanced Pooled Fund did 5%,5%, and 9% over that same period. So I didn't double what the B/P Fund did this time like I've done twice before. I'm still up around 40% over the 2-1/4 years and way ahead of the B/P Fund. I was up 19% over what the B/P Fund did in '06. I just got a lesson in perspective. I did good. So'd the B/P Fund. You just don't stand as tall when the other guy ain't lying down...

Could I've done way better? Sure. Check out (Click On) the chart.






If I'd been 100% in the top two funds and I'd played the May/Aug hiccup better, I'd a been up around 40% for the year. So what. That stuff happens only a coupla three four times in a decade and it involves real risk. I've done it before. But I didn't do it here this year. I didn't even try. I'm my own client and I know what's possible and what's smart. Up 40% in two and a quarter years is good enough. If I don't give it back and I can do well enough in future years, that kind of performance will be huge for me compounded 10 or 20 years out.

On to next (this) year. I've gotta figure what to do next (now) about my 401a and about the Defined Benefit Plan. Stay tooned. See ya at the Hall...


[ view entry ] ( 396 views ) [ 0 trackbacks ] permalink ( 2.9 / 368 )
Seasons Greetings... A Festivus for the rest of us? Gimme a break and a gingerbread man and another egg nog while you're up.  

Here's what the current charts show for cap gains hiccups. It's a PITA, but better to have gains than not...Know what I mean,Vern?



Figure that the American Fund EuroPacific Fund does it's thing in the last days of the year, so there's more to come.

Charts and tables up. With qualifications... Some of the dividends and cap gains have been paid and the numbers are good. Some may be history but the numbers may not/don't reflect it yet. Complicating the whole ball o' wax is that the markets are a touch flakey right now. So are the down numbers cap gains or the market?

It's been a good, but a tough year. There was a huge whoosh down in May. If you were all guts and no brains, you bought back in in August and you look like a genius today for riding the whoosh back up. If you were smart, you waited to see that the re-launch upward of the market was for real and you waited for the first substantial pull back to get in at a reasonable price. That first substantial pull back happened last week. So you looked like an idiot for waiting for the next to last week of the year to make up for the previous 11-1/2 months. the longer you waited, the more you left on the table. This is why you stage the buys.

So this week, everybody not in a 401a (k) faced this dilemma... If you were brave (foolhardy), you look like a genius. Now you wait until January to sell and avoid the tax hit this year, assuming everybody else does too. Or if you were late to the party and have damn little to show for it, you wait to sell so what you did make looks as good as it can. Of course, if someone tries to beat the selling rush and sells late in December, they pay the taxes but they may avoid the next whoosh down. Or start the whoosh as everyone tries to crowd out the door first. So expect another whoosh down in January as everybody or only the people who left it until too late left lock in profits. Unless it happens in December. Of course if enough money pours in to the stock market due to the Santa Claus effect or the strong late year run, it may cause a very substantial bounce back from the December selling, if there is any, or swamp the January selling, which there will be some of. Or not. Either way. Most likely. Now if some of the money managers were able to hedge their portfolios with options, then they will be able to .... Nah, I think I'll go shopping instead.

If this was easy, everybody would be rich... So anyway, we'll have to wait for the statements to finally get the whole story... and wrestle with what to do about it...

I've moved a dollar or two around but I'm standing pretty pat other than bailing on RGAFX to try to game the Dec/Jan sales and putting another dollar back into LAVLX because they might be through with their recent spell of underperformance. We'll see. I'm getting my account balance up where I can't move much of a percentage around without triggering tading restrictions. I feel strongly about it both ways. Finally, there were some thing i was going to do as a Trustee if I got elected. I'm making a list and checking it twice to get started on it. Don't confuse lack of motion with nothing going on. Watch the site.

I bumped my contribution up for next year. Hopefully you did too. If you want to know what more there is to do to prepare for your future, get a fast connection, a large monitor, find out when I got a Saturday free, round up about ten other brothers and sisters, and rattle my cage about showing you what I do and why. Iff'n that don't happen........See ya at the hall.
[ view entry ] ( 322 views ) [ 0 trackbacks ] permalink ( 3 / 477 )
I want to thank everyone for their support in the recent election. I'm still going to get the job done. But it'll be done from the outside. Phase Two starts today..... Check out www.joefacer.com /Reforming a Pension Plan 

Some charts and tables up. Either the Lord Abbett Small Cap went down in flames big time 13%) in one day (pretty unlikely) or it paid a VERY substantial dividend or capital gains. (PFL).

===It was the latter case, the div/cap gains were $4.531 per share.===


I'll post my account charts and tables when I get it all plumb square and level... Which will be when I can get info on if and what the dividend/cap gains were from KandG or another source.

===Still waiting on this one for the very final good as gold number.===

But, if ya just CAN'T wait, figure Lord Abbett is buying you new shares at the price of 30.07. This works out to about one new share for each six you now hold. Call it about 13-15% capital gains this year.


For those who are unclear on what happened; the typical mutual fund has one portfolio of stocks/bonds but many different classifications. Some investors pay a load (commission) upfront, some pay it later on sales, some pay a higher commission, some pay a lower commision, etc. Some of the holders of the fund have to pay taxes on capital gains and some don't. Pension funds tend to use the institutional classification shares of the fund and so probably, most likely, pretty much everyone in this "r or x " classification fund, like 342 members, is in a nontaxable income/capital gains situation. But maybe not everyone. To make the whole thing easier and somewhat transparent, especially given that taxable and nontaxable entities may be in every class of fund, every year about this time, the fund takes the capital gains and dividends made over the past year out of each account in each classification, subtracting the value from the NAV (net asset value). So the price per share takes a hit. In the next coupla three or four days after, they rebate the capital gains/dividend taken out of each account back into the same account but in shares instead of dollars, at the price that the fund was when they subtracted the cap gains... After it is all over, you have the same amount of money but in more shares of a less expensive fund and the goverment and you have the capital gains reported in terms of a dollars/shares number if you indeed have to pay taxes on it. For the 401a, it ain't no big thing. You pay no taxes, you do nothing. For the taxable accounts, they use the cap gains number to report. Note it and stay cool. But it'll get your heart pumping the first time you see it, until you look at the calender. Expect to see it happen once in each fund, providing there are indeed capital gains to report.


+++ Growth Fund of America paid on the 19th @1.10 per share.+++

---EuroPacific pays on or about the 27th.---

Figure that the numbers are somewhat flakey until after it has occurred in each fund and has been recorded and acknowledged. Or you can look away until 2007.

The charts look like this... Ya can squint or clickonnit, but then ya gotta



LOOK AWAY LOOK AWAY LOOK AWAY LOOK AWAY LOOK AWAY LOOK AWAY LOOK AWAY LOOK AWAY!!!!!!!

Is Local 342 one of the investing proletariat? The excerpt below is from the link below that...

"But they don't seem to be disturbed by the inequality inherent in the financial markets in good times. So long as common stocks are rising and their money isn't obviously stolen -- that is, so long as the proletariat enjoys steady, if unspectacular, returns on its capital -- the investment lower class is surprisingly docile. It's as if the pleasure of any return at all has distracted investors from a comparatively low rate."

http://www.bloomberg.com/apps/news?pid= ... nist_lewis

With a $300,000,000 pension fund, given that there are limitations to what we can and should do with retirement money, are our funds being invested to give us the highest return with the greatest safety? Or is there a sizeable "tip" already worked into the tab when it hits the table because we know them and they know us and it's goin' on the union members card where they'll never see it?

Good readin'
http://online.wsj.com/public/article/SB ... ?mod=blogs


[ view entry ] ( 329 views ) [ 0 trackbacks ] permalink ( 3 / 408 )
ELECTIONS!ELECTIONS!ELECTIONS! Be There Or Be Square!!! Am I Showin' My Age? SEE YA AT THE HALL. 

Charts and Tables Up! The election weekend has got my schedule scrambled, my broker's IT team was locked in a death struggle with their computers and I was locked out some of my preferred tools for charts and tables. I downloaded a new version of Internet Explorer and it took a while to figure out the new features and beat some of them into a semblance of usefulness. In other words, this is just another day in the digital age. The issues have in part unwound and I'm in gear and rolling. See ya at the hall.

I've been thinking. What would I do if I was starting to self manage my own account? What if I had just gotten blessed to do so at the most recent meeting? What would I do and how would I handle it? I had already been investing and trading my family IRA's and an individual trading account regularly since 2001, so when we finally got some funds worth investing in in 2004, I hit the ground running with a full tool box and a modicum of experience. What tools and experiences have worked the best for me since then and which things aren't working as well? I could spend some time and effort looking back at this and make myself a better investor and trader... And I could give some thought to what the differences are between trading (my personal trading account) and investing (my 401a account). And I could give some thought to how I would handle it differently if I had only an hour a month vs an hour a week that I cared to spend on it. It's something you'll see and hear about in the near future.
[ view entry ] ( 293 views ) [ 0 trackbacks ] permalink ( 3 / 482 )
ONE WEEK UNTIL THE ELECTIONS!! BIG TIME SUSPENSE AND WILD AND CRAZY ADVENTURE WITH THE FLAVOR OF WHITE HOT STEEL!!! 

Tables and charts up.... My personal 401 account data is a tad flakey because the last two months contributions are a tad unreal. In the process of running the problems down, I found some months with the wrong hourly deduction. Checked your contribution history lately? It's not only the right thing to do....It's goldurned smart too. Especially if it puts dollar in your pocket.

The market's getting kinda skitish. Time to book some profits and pull in my horns on the 401? I'm gonna think about it and write about it here. Stay tooned.
[ view entry ] ( 354 views ) [ 0 trackbacks ] permalink ( 3 / 490 )
TWO WEEKS UNTIL THE ELECTIONS. SHOW UP AND MAKE YOUR VOICE HEARD. 

Charts and tables up. I've got a full plate for the weekend. There may be more posted here.....but no promises. My 401 account is long and strong, the return is smokin' and if I keep my head screwed on and don't get greedy, I'll keep most of it if the market starts to go south. I'll keep an eye on it all and let you know.

So at the meeting last week, Mike Mammini, the head honcho at our 401 plans showed how it makes very good sense to commit a substantial portion of your savings to the 401 plan. For late starters like me, it makes sense to commit the max. On a good year, that comes out somewhere between $15K and $25K placed in the 401a. He also says that you probably should look at it at least once a year, but probably not more often. After 5 years, that's about $80K to $140K that you've invested in financial instruments that are not guaranteed and have a history of going way up and way down real suddenly over the past coupla centuries. During that time, investing in stocks and bonds has made some people fabulously wealthy and beggared others. What makes YOU more uncomfortable, the thought of having to do a half hour a week of homework to make sure that that nothing bad happens to $100K plus of your money, or the thought that you might not catch a bad thing happening in time to save a substantial portion of your savings from going away forever? Is once a year often enough to look at something so important? If once a year isn't often enough to get your teeth checked, why is it often enough to look at your 401a?

The guy from McMorgan tried to scare members with TALES FROM THE STOCK MARKET, stories of tech investments gone bad. His example was PALM, where an investor could have lost 99% of his investment. SCARY!!!!! it's a good thing that McMorgan resisted requests to give us a tech fund to invest in...or maybe not...
Check out the charts of Palm and Apple below...CLICKONNIT





Put all your money in PALM and lose 98% of your money. Put 5% of your money in PALM and 5% of your money in AAPL, lose all the money in Palm provided you go deer in the headlights for the two years it takes PALM to go from $1000 to $3, and make 1000%+ (ten times your original investment) in AAPL by holding on for four years. I'll do that any day. It's called diversification and reducing risk to match the reward. It's what a smart mutual fund manager does. And a smart mutual fund manager wouldn't have ridden PALM all the way down FROM $1000 TO $3 and lost all the OPM (Other People's Money) along the way, charging them a fee to do so. Click on the link below.

http://bigpicture.typepad.com/

and then click on "Protect Your Assets" under "The Apprenticed Investor" section on the right. Learn how it's done. In 50 years of reading a lot of disparate stuff, reading this article is one of the best spent chunk of time I can remember. CHECK IT OUT!

Check out the chart below. CLICKONNIT!



Shown is a tech Exchange Traded Fund (ETF) and a tech mutual fund vs our 401a growth fund and the S&P 500. I'm still not clear why we can't have a good tech fund available rather than tech funds used as something to be taken out of the closet every so often to scare us with.
And we gotta reconcile Kim asking us to double check our hours monthly because it is the responsible thing to do, and Mike telling us to look away from our investments for year at a time or longer because .... Well I can't figure out why because.
[ view entry ] ( 353 views ) [ 0 trackbacks ] permalink ( 3 / 464 )
===THE AFTERMATH=== Whatchur left with after all the addition/subtraction/multiplication/ and goezintas are done. 

The chart service is working right again. Charts and tables up like their supposed to be. Be that as it may, the Special Called Meeting came down and it was a major success in all ways. The attendance was as great or greater than a typical union meeting and a lot of people stayed to the end. At a few spots emotions ran high, a lot of good information got put out in front of the members, some existing misinformation got corrected, some new misinformation got out and some of it got corrected on the spot. Some more information is still need or is forthcoming. Time will take care of the rest. What's not ta like?

The meeting provided me with some new information and some updates on some existing info. Some of it changed my mind about some things, some of it gave me a new perspective what I already was pretty comfortable with, and some of it further supported my beliefs. You'll be seeing changes in the info on this site and in my campaign literature to reflect that.

Ah got stuff to do, but iff'n the good Lord's willin' an' the creek don't rise, I'll be back this weekend with more right chere, all ya all.
[ view entry ] ( 356 views ) [ 0 trackbacks ] permalink ( 3 / 462 )
SPECIAL CALLED MEETING THIS WEDNESDAY THE 15TH AT 7:00 PM. 

Charts and tables up. The numbers and pictures speak for themselves. But I like to talk about it here anyway. Again, I'm doin' double what the Balanced Pooled Fund has done over the last 2 years. That's what I'd hoped to see. I've spoken with three 342 members in the last coupla days who are doing very well following a similar strategy to mine, but one they came up with on their own. It's all pretty cool.

THIS WEEK THE BIG STORY IS THE SPECIAL CALLED MEETING. I'LL BE THERE EARLY AND I HOPE TO SEE YOU THERE.
[ view entry ] ( 299 views ) [ 0 trackbacks ] permalink ( 3.1 / 396 )
End of the year...cold weather, holidays, elections nationally and locally and at the Hall, Maybe some Big Changes coming down.... Sounds good to me. I'LL BE ATTENDING THE 11/15 401a MEETING.  

Charts and tables up. More to appear here this weekend. Union nominations this Thursday. The yearly openning to change your 401a plan contribution. Lotsa stuff. Check it out.
[ view entry ] ( 290 views ) [ 0 trackbacks ] permalink ( 3 / 390 )
It's a $400,000 day in the Bay Area. Indian summer and days like today are why your house is worth $400K more than one where the weather is going bad... 

Charts and tables up. If you check out my percentages in the various funds you will see that I committed a little more money into stocks and outa cash last week. The last two and a half years, I was pretty much head down and WFO in five stock funds and everything was fine. I was all GIC a coupla three weeks into the May crater '06 and that was cool. But I got overly cautious when we hit bottom and the Mid East went up in flames. I was late getting back in and the last six months have been pretty limp. Again, if things had gone to hell in a handbasket, my discipline woulda seen me through. But the market is on fire, I caught some of it and there may be more to go into the holiday season. So I've edged more into stocks and less in cash. But the last GDP number was pretty limp too. So if business gets soft, maybe the Fed will cut or at least not raise any more. And that'll mean a soft dollar. And that brings us to another issue. Look at the charts and this year's 401a worksheet on my web page. I've let 5 funds carry the load for the last two years. Two of them have been my main horses and I'm heavy into them going into this year's holiday season. But the EuroPacific fund is almost as hot as the small cap and hotter than the domestic growth fund and a falling dollar would give the return a boost. So it got the nod. But I'm concentrated in three funds and that means I gotta watch and act immediately and ruthlessly if the market turns on me. So, up 34% in a little over two years means I gotta go the extra mile to keep it as well as to make it. That's the way the world I live in works. Know what I mean, Vern? Nomination time. See ya at the hall.
[ view entry ] ( 331 views ) [ 0 trackbacks ] permalink ( 3 / 470 )
Election Countdown...Only a coupla three four or five or more weeks to go... 

Charts and tables up. I'm shooting for a new post to the "ELECT ME TO THE BOARD OF TRUST OF LOCAL 342 THIS DECEMBER" page on the website and blog this weekend. Check it out. Stay tooned for more to come.
[ view entry ] ( 332 views ) [ 0 trackbacks ] permalink ( 3 / 500 )
Special Called Meeting in November; Be there Or Be Square... 

Charts and tables up. It is almost a lock that UA Local 342 will have a special called meeting in November to address isues with our pension plans. This will be big and will affect every member who hopes to retire out of 342 and live happily ever after. Stay tuned, Spread the word and be there or be square.
[ view entry ] ( 322 views ) [ 0 trackbacks ] permalink ( 3 / 494 )
How's it goin'? Well it's goin' like this.... 

"Energy and persistence conquer all things."

-- Benjamin Franklin

Charts and tables up. Let's look at where I stand after two years and a coupla three four weeks of running my own 401 money versus leaving the money in the default choice; the "Balanced Pooled Fund" (BPF). My goal is to beat the BPF's rate of return by enough to justify the effort I'm putting into taking care of my retirement money, and to protect my self against losing money because of not putting enough effort into taking care of my retirement money.
Why do I even have to take care of my retirement money? Isn't 342 paying people to do that for all of us? They are supposed to be. I know better. The people watching our money are baby sitting it for us. The baby sitters/investment advisors/custodians earn fees first, for not doing anything stupid and second, for doing well enough not to lose us as clients and thereby losing the ability to charge us fees. You can't expect much from this set up and sure enough at times we haven't gotten even that. Read elsewhere on this site how they have been doing with your money. Suffice it to say that I wouldn't be doing this if all I had to do was let my money pile up in the 401 and the pension fund and grow itself into a fortune and a lifetime of easy living for me.
So... How my doin'? Pretty damn good. Check out my tables at http://joefacer.com/id11.html. I averaged almost 12% return/year over the first 16 months, from 9/04 through 12/05. Bull markets make almost everybody look like a genius and I was there to let it do its magic for me. My unstated until now goal is to get to the point where my investment return is substantially greater than my contribution. At that point, the hard work is done and my yearly investment returns start to approach what would make a really nice pension check. That makes living happily ever after a real possibility. I flirted with that kinda return in 2004 and 2005. 2006 is a different story. Check out the charts. Everything went great up until May. I stepped off the elevator just as it hit the top and went to almost all cash. This is the "not losing money" part of my "timing the market" plan. I started to get back in as stocks found a bottom but got scared back out by the Mideast war, rising interest rates, a slowing economy, the collapse of the housing industry and housing prices, and a desire to protect my gains from '04 and '05. In the meantime, stocks went up while I sat on the sidelines and waited for something major to tell me to get back in. I never heard the whistle and so for this year I'm hoping that the seasonal year end stock rally will show up like it usually does and get me back close to the 20+% up for the first half of the year that I had in my pocket in May. I may get there, I may not. And either way that's OK...
Having a workable plan and the discipline to stick with it is how you deal with not being able to tell the future and not being perfect on every move every day. I diversified among funds and it kept me from being totally invested in the two top funds, but it also kept me from having any money in the three or four worst funds and from having much money in the so-so funds. Getting out when it looked like the top cost me a litte performance here and there when I bailed out a little early for a month or two here and there, but it had me out during most of the downdraft from May to July. Being nervous from August to date has kept me with one foot in and one foot out of the market and has cost me some gains, but that's all part of the price of having a plan and discipline. And having the plan is the key to being confident about boosting the amount I'm putting into the 401 plan, going heavily to stocks at times, and sleeping well every night.
I'm up close to twice what the BPF is and I don't mean 3% for me compared to 1.8% for the BPF either. I'm up over 30%+ in two years. I've gotten both the "deer in the headlights" fear of the market going down and the "the week that stocks doubled when I sold out" fear burned out of me along the way and that's good too. It ain't all good all the time, but it's pretty damn good most of the time and ...

"No one that ever lived has ever had enough power, prestige, or knowledge to overcome the basic condition of all life -- you win some and you lose some."
-- Ken Keyes, Jr

So YEAH, I'm getting my money's worth outa running my own money. The more I put in and the more I earn, the greater the payoff. The quicker I stop the bleeding in a down market, the quicker I get back to even and start making progress again. But you know that. You read it on my webpage.

See ya at the hall....
[ view entry ] ( 379 views ) [ 0 trackbacks ] permalink ( 3 / 500 )
if you don't find it out here, ya ain't gonna find it out.  

Charts and tables posted. You'll find more here and on http://joefacer.com/id19.html by the end of this weekend. Copy it and get it out to the membership. Local 342 Brothers and Sisters will be glad you did....
[ view entry ] ( 345 views ) [ 0 trackbacks ] permalink ( 3.2 / 582 )
Successful investing is a lot like surfing; You can't make the ocean do what you want it to do. Instead you catch a ride to where it is going on its own and avoid getting wiped out on the way. Substitute "market" for" ocean". 

"Careful. We don't want to learn from this."

--Calvin & Hobbes comic strip

Charts and table up. Cross currents are what it's all about. There were three bubbles. The dotcom bubble, the housing bubble, the energy and other commodity bubble. The dotcom bubble created and destroyed a huge amount of wealth, especially in the Bay Area. The Fed drove interest rates to 1% and created the housing bubble to prevent the bursting of the dotcom bubble from driving us into a deep recession. Low rates and available money combined with the development of Brazil, Russia, India, and China to drive the price of commodities to sky high levels and create the commodity bubble. Politics in the MidEast added a $20 risk premium to oil. And corporate profits expanded like mad across the world. Then the Fed and other central banks, notably Japan's, took back what they had given. Rates went up and liquidity was withdrawn. But there was a lot of momentum in the world economy and the economic activity resisted the pull of gravity. But rates and gravity are relentless. The housing bubble is history and maybe the commodity bubble is too. The house next door went at the peak of the market and today an equivalent house can be had for 20% less. My neighbor is WAY underwater on her mortgage. GM is imploding and might be partnered with a French auto manufacturer?!!?!? Ford and GM merging? Chrysler in trouble too? Three year fixed and interest rate only mortgages are about to reset. There is seven months worth of housing inventory nationwide. Housing prices are going down in flames.
But...Energy prices are on the way down too and so are other commodities. Natural gas is down 66% from last winter and cluttering up the landscape. A warm winter may mean shutting down production even at the price of damaging the wells 'cuz storage is FULL. Oil is down from $78/bbl to under $60. It may go to $40 if the MidEast politics cooperates. That puts money in everyone's pockets. Base metals are down too. A lot of people have jobs and it doesn't look like they will lose them soon. The bond futures are predicting a rate cut next year. Are we going to have a soft landing of the economy? Will we see a replay of the 80's when my union had a ton of work and travel cards from all over the country while the unemployment rate was 12% nationwide? Probably not. This time everywhere else seems to have a ton of work on the books too. I just don't know. Maybe yes and maybe no. Could China blow up or the Mideast explode? Would that create a world wide economic crisis? Is there another bubble out there waiting to happen or just rate cuts and a Goldilocks economy advancing at a walking pace for years to come? I feel strongly about it both ways and neither either. That's why I'm 40% cash and 50% stocks in the three funds I like in the 401 and ready to add to stocks big time or bail out to all cash. I'm anted up and protecting profits and waiting for the next card to be dealt. You play what you're dealt when it's dealt. Only then can you make a rational choice between folding or going all in or someplace in between.

We may yet see the special called meeting on the pension in a month or two. Or not. Stay tuned.
[ view entry ] ( 344 views ) [ 0 trackbacks ] permalink ( 3 / 556 )
Election Countdown...coupla three months to go and counting.  

"The trouble with most of us is that we would rather be ruined by praise than saved by criticism."
-- Norman Vincent Peale

Charts and tables up. There's a new page on the upcoming 342 election at joefacer.com. Tap the link to the right. More to come in the next three days.

Oppps. Ran out of weekend. Stay tooned...
[ view entry ] ( 318 views ) [ 0 trackbacks ] permalink ( 3 / 459 )
Election season. Never a dull moment... 

Charts and tables up. Maybe more to come....

Rev Shark said...

Just remember one thing: there are no good stocks. They all suck. Even those that are making you money are going to turn on you sooner or later. The only stock you should say anything good about is the one you no longer own that made you money.

[ view entry ] ( 403 views ) [ 0 trackbacks ] permalink ( 3 / 745 )
The stock market is about to get really really bad or really good real soon, or not, Probably. Or so I've been told by a lot of experts who disagree with each other. 

Charts and tables up. Check out the AlarmFund.com tables. That and the stock charts and the real estate and international news tells a story I'll want to think and write about and act upon...talk to me about it at the hall this month.

significant stuff in the news...

http://www.slate.com/id/2148344/

http://www.crooksandliars.com/2006/08/3 ... -rumsfeld/

Click on it. I'm reminded of the period near the end of Jimmy Carter's first and last term. You could feel that his claim on the electorate was dissipating by the day. He was not hated, he was not a bad man, he was just becoming irrelevant to what the country's voters wanted from its leadership and Ronald Reagan was waiting in the wings. Carter was crushed in the election and IIRC, he conceded the election with the West Coast polls still open and sent/kept a lot of demos home with state and local candidates/issues still being contested. Kinda the very last pratfall.

I sense the same absolute irrelevance building about what the Bush administration represents as far as what the country's voters would like to see. The 9/11 covers everything message is starting to get old, especially since it doesn't appear to be working or even very truthful. Unfortunately, I don't see the Democratic Ronald Reagan equivalent in the wings and the Republicans seem to have a much higher quality political operatives than the Carter/Demo administration had/has. Still, I think the upcoming economic situation will deteriorate for many as the '08 presidential election approaches and that's going to count for a lot. I just don't see the democratic alternative falling into place. Hope springs eternal....

Back to the 401a. Check out the chart (Clickit if ya wanna...)



Since the correction in May, the trend is up, but it's just barely there in some funds and very weak in others. Something big has changed. It appears that we've had the last harrah in housing and the reversion to the mean is well under way. Read the Sunday paper. Any Sunday paper. There are other things going on that will have profound and long lasting effects on the ecomomy and the stock market and the 401a. I've written about the '03 recovery getting long in the tooth and it may have come to pass. Here's some links that I found of interest...

http://bigpicture.typepad.com/comments/ ... _wron.html

http://www.marketwatch.com/news/story/S ... mp;siteid=

What was right in 04 and 30% return in two years ago, is no more. Unless of course, oil drops in price by 20% to 30%, peace breaks out in the Mid East, or China goes up in flames without negative consequences to the US. Barring that, I'm 40% in cash and looking to do the right thing.
So here's what I think I need to do. We've come through a time when free money (1%) made almost every bet a winner. For years almost every one of our 401a funds was something of a winner. If one or more lagged or one or more excelled, they all pretty much made made money at least most of the time. The rising tide ain't there no more. Money anyplace on the table isn't an automatic winner. Now there are winners and losers and maybe a lot more losers than winners. Look at the difference between our high octane high growth growth stock fund and another growth fund that I've been invested in in the past.



It's all about having more winners and fewer losers and being able to hedge. I want to see more alternatives like NEEGX. One fund a sector aint enough when the going gets tough. I want to choose not only among sectors, I want to chose a better (at least for now) fund from more than one offering per sector. Do you? If not, why not? It all starts with asking for a choice. That's how we got more than just McMorgan's dog of a fund. I asked.

See ya at the hall. It might be a big one...

[ view entry ] ( 461 views ) [ 0 trackbacks ] permalink ( 3 / 757 )
Safe low tar cigarettes, low fat bacon, low salt potato chips, "heart healthy" breaded,fried, cheese sauced chicken sandwiches, low risk conservative investments. LIES! ALL LIES!!!  

"The art of investment is the art of selling. Buying is a lesser skill and holding requires no skill at all."
-- Harry Schultz.

Charts and tables up. Busy this week. I'll get serious about whatz up next weak.
[ view entry ] ( 360 views ) [ 0 trackbacks ] permalink ( 3 / 524 )
There's A Fine Line Between Being Flexible And Going Limp.  

Kinda a surprise this last week; I was set for the market to drift down through the historically poor period of Aug/Sept. A bear market rally on the way, I wouldn't have been surprised by. I was not prepped for the rocket launch that occurred this last week. Still, I was about half in/half out of the market and I made a dollar this week regardless. I put about half the cash I did hold in the market during this week after the spike up..... I don't feel really confident about that; I was late, the market was overbought and due a rebound anyway.... But I still hold 20% of my assets in cash. So we'll see. The economy is going soft, the Mideast truce is very shaky, it is still the doldrums of the financial year. My confidence is kinda wan. But I can always sell and go back to cash.... We'll see....I guess....
[ view entry ] ( 362 views ) [ 0 trackbacks ] permalink ( 3 / 525 )
Time To Play Catch Up On The BLOG. Hang On. Here's Where We Start To Pick Up Momentum. 

I've been busy. But that's no excuse, it just is what it is... I've scoped out the new Defined Benefit set up post McMorgan and you'll hear more about that soon. Stay tooned for the Special Called Meeting on the pension plans for September that was moved and accepted on the floor at the last meeting. This may be the one of the most important meetings in a long time. Spread the word to the members who aren't online...

Back at the ranch.... A coupla three months ago I attempted to finesse the post earnings pull back/correction of May. I did a pretty good job. I sold up and bought back lower. Then Hizballah got a coupla hostages, the Israeli's did their best to put the fear of consequences back in their opponents and oil prices skyrocketed and everybody started to puke up stocks. Then the long string of interest rate increases finally started to kick in, housing and new mortgages and resetting mortgages slowed and got toppy and earnings and next quarter guidance got squishy and stocks flattened out and went down. Damn. Not what I'd hoped to see.

Early this year I was up 40% since I started managing my self managed 401a. That was then and this is now. I'm still up twice what I'd have earned if I was only in the Balanced Pooled Fund and I'm up 26% over two years. Not as good as I'd have done if I could've predicted the future, but I gotta live in this world where I can't. Being down 13% and still up 13% a year over a two year period makes it hard to whine, so I won't. Now what?

Check it out. CLICK IT for a larger version. CVGRX is pretty volatile. When it's hot, its a good performer. But when it's not, it goes down as hard as it goes up. Like recently. The overall market trend is down. Monday I'm dumping almost all of my Calamos. I can reenter at will and will not be charged a fee under the rapid trading rules. I'm mostly out of Lord Abbett Midcap (LAVLX) because of poor recent performance. And, after all, the overall trend is down. But I can reinvest at will, because my withdrawal(s) did not trigger the rapid trading rules. I've triggered the rapid trading rules in RERFX, so I'm standing pat at 12%. I can withdraw more at will, I can reinvest a limited amount at will, and invest an unlimited amount in a month, but the trend is down, so it's 12% until further notice... I'm at 12% in RGAFX, the rapid trading rules haven't been triggered, so I can reinvest at will if the trend changes, but right now the tr.. you know. I triggered the rapid trading rules in LRSCX, so I can withdraw more at will, but I'm stuck at 13% for 30 days which is not a bad place to be since the trend, you know? And, if the market takes off, I can get exposure to the market elsewhere, if not in LRSCX. I'll be at about 50% in the GIC Monday evening, which is not a bad place to be at a 26% return over two years when the tre....

It's said that 80% of the money is made over 20% of the time. The rest of the time you lose/break even, assuming you don't do anything stupid. That's the task in front of me now; Avoid Stupidity. It'll be hard, but I'll try. It ain't pushing the envelope, but 50% cash and an eye on the exit while watching the trend is aggressive enough for me here and now. Because, after all, ta da, ta da, ta da. If it gets as bad as the bears say it could be, I'll go to almost all cash when I figure it out. If the downtrend ends and is replaced with an uptrend, I'll probably buy some stocks and try to figure out if it's a bear market rally or the resumption of a bull market. You'll read about it here

There's issues to deal with though, in the meantime. Think about this prior to the Sept meeting; The GIC was great when rates were low. Would we get a better return if we had a Money Market Fund option open to us? And as working men and women, we need the KandG.com site up on weekends when we have the time and inclination to use it. Dead from Friday until Monday ala last weekend isn't acceptable.

See ya at the hall.....
[ view entry ] ( 342 views ) [ 0 trackbacks ] permalink ( 3 / 522 )
PLEASE STANDBY. I'M CURRENTLY EXPERIENCING TECHNICAL DIFFICULTIES.... 

The KandG 401 website is down. I've got a monthly contribution to check on and allocate, and stock fund performances to tally and post to www.joefacer.com. I can get the fund prices from other places, but shares and contributions in my account are what matters. Until I can get in to the site and my account, there's not much to do...... But...Ah'l be back.

SUNDAY; Early Afternoon. Still can't get into the 401 website. Some charts up...some tables up....The rest not. There's some stuff to cover but I'm gonna wait until all the data is available. Stay Tooned.

MONDAY; KandG back up. A buddy tells me that he tried to rebalance last week and he thinks it didn't happen. That's not right. Does anyone at KandG check to see that the site is up 24/7? If not, why not?
[ view entry ] ( 349 views ) [ 0 trackbacks ] permalink ( 3 / 496 )
A Real Good Week Makes It All Worth It... 

"Consistency requires you to be as ignorant today as you were a year ago."

-- Bernard Berenson


Charts And Table Up. More to come....
[ view entry ] ( 340 views ) [ 0 trackbacks ] permalink ( 2.9 / 486 )
Stocks Go Up And Stocks Go Down...Jeezuz! DoThey Ever... 

Sat 22nd. Charts and tables up.

Wed 26th. Not much doin'. I'm in the process of being hammered flat by a cold, the market has hit a bottom, just maybe not THE bottom. I'm 80% long and 20% cash in a rising (for the moment) market. I'll expound at length next weekend.
[ view entry ] ( 324 views ) [ 0 trackbacks ] permalink ( 3 / 482 )
Wow!!!!! That Sure Didn't Work Out Like I Wanted It To!! 

"It's tough to make predictions, especially about the future."
Yogi Berra

"No one that ever lived has ever had enough power, prestige, or knowledge to overcome the basic condition of all life -- you win some and you lose some."
-- Ken Keyes, Jr.


Sometime things work out your way, sometimes they don't. Oh Well. I did a nice little finesse move; I looked at how long the market had gone without a correction, I listened to the Fed jawbone inflation, I saw the stock market start to break in the second week of May, and I sold. In May I got mostly out and in June/July I got back in. I sold high and bought back lower. Then the deadline for Iran to respond to the UN's ultimatum came up on the calender, and the Iran backed Hezbollah in Lebanon invaded Israel, killed eight Israeli soldiers and kidnapped two soldiers. And now the Israelis are exacting a price from Hezbollah to send a message that the withdrawal from Gaza and a retreat behind the Wall doesn't necessarily mean that it is open season on Israelis.

http://www.msnbc.msn.com/id/13884768/

The Iran nuclear issue is now off the front pages and in the back of the paper on the lower half of page 12. What's up on the front page is expanding warfare in the Middle East threatening to spiral out of control and a possible threat to the world's oil supply at a time when prices are already at all time highs. There is a lot of fear and uncertainty and every quick trigger finger near the sell button is now leaning on it.
Politics looks dark. Economics don't look that bad. There haven't been much in the way of lowered earnings preannouncements. The economy may be cooling, but business as a whole still looks OK, if not really strong. However our particular business sector looks really strong. And we've got a nice contract. That's encouraging. And the Fed finally sounds like it may be near a pause, if only a temporary one. The Fed is also likely to see the Mid East situation as a headwind to continued economic expansion and may not want to pile on right now. So I have gone to cash with the maximum allowable under the rapid trading rules as of Friday and I'll let the rest ride. Maybe it'll work out. September of '04 was an incredibly right time to go all in in stocks. Now the risks are huge. Forty percent up, to thirty percent up, and back down to 25% up in a month. The Mid East riff came up too fast. These things have come up recently on Union meeting night and I've been a day or two late to move. I've fallen behind the Balanced Pooled Fund for the first time this year. But I'm feelin' OK about what I own right now. I'd rather have bought Friday than two weeks ago... but for the moment, I'm standing pat heading into an earnings season that may surprise to the upside. Let's see if it works.
Special Called Meeting going down in September. The Defined Benefit and the Defined Contribution Funds will be discussed at that meeting. I'm going to present some of the information I've developed and shown here as well as additional information regarding our Pension Funds. We will have representatives of the Fund managers available to answer to questions raised by the presentation. See ya there....
[ view entry ] ( 372 views ) [ 0 trackbacks ] permalink ( 3 / 523 )
Stevie M Says, 'We got work. SaveYour Money'. Hell Yes!!! I've Done It Six Out Of The Last Seven Times.It Didn't Take Me Long To Figure Out How It Always Works...Revised 7/12 

Charts and Tables Up.

Not much to post tonight. My 401 is doin' just fine. The extra work is paying off in greater returns and that is gonna get better when it is compounded in future years. I'll move the FPRAX/IDETX Mutual Fund Lessons to the website along with some other stuff yet to come. Eventually I expect to have most of what I cover in my presentations up here.... I think about eight to ten years will be about right. Even so, if that was all there was to it, colleges would only consist of a book store and testing facilities. So talk to me at the Hall if you don't think you have what I'm doing in my account totally figured out yet.
I've loaded the move of the last of my cash from the GIC to RERFX into the clip. I'm eligible to do so as of the 9th. So the trigger will get pulled tomorrow at the end of the day. I think the FED's got one to go and maybe two. Either the market will celebrate the end of the interest rate increases or it will look ahead to the next recession. It'll celebrate/respond to what it sees by going up or down. I'm set for it to go up. If the market catches me leaning the wrong way, I'll have to figure out if it's just a hiccup or the bird flu and act accordingly. We'll see...

Feelin' Alright.... Put this months contribution into LRSCX. It's that or RGRFX. Why not?
[ view entry ] ( 381 views ) [ 0 trackbacks ] permalink ( 3 / 490 )
MAJOR CHANGE! NEW TRADING RESTRICTIONS ON THE 401 PLAN. SEE THE KANDG SITE! 

The heading says it all. It makes what I'm doing a little harder, but not impossible. See me at the hall. We should talk.
[ view entry ] ( 353 views ) [ 0 trackbacks ] permalink ( 2.9 / 400 )
I'd Like To Think I'm Starting To Get Traction On This 401a Thing. Talk To Me About It At The Next Meeting... 

"The primary objective of leadership is to help those who are doing poorly to do well and to help those who are doing well to do even better."
-- Jim Rohn

Charts and Tables up.

The Conclusion of "My Most Gnarley Mutual Fund Adventure"

So, to sum up my FPRAX/IDETX affair:

1) No game goes on forever. If you buy, you are almost guaranteed to have to/want to sell given time. It was 12 years for FPRAX and 12 months for IDETX for me. When the game is over, you need to leave the table and go somewhere else or lose what you've gained.
2) It's the manager, not the fund. Or it's the era, not the fund. Or the economy. Or the world economy. Or national politics. Or world politics. Or whatever. Good funds can be totally wrong at any given time for a number of reasons. When things change, you change. Or pay the price.
3) Price and trend are what's important to you. Every day something happens somewhere that can meaningfully affect your investment. Often it can, but it doesn't. Price and trend will always tell you what is really going on. It's the only unequivocal, direct, and elemental information that you can get. Unfortunately, it is about the past and not the future. No one said that this was easy.
3) You need to direct a self directed plan and you need information to do that. Given that there are pro's in place at the funds applying their knowlege, experience, and judgement on your behalf, you still are making a decision every day or every week or every month as to whether or not they will continue to do so. Is what they are doing working? Go back to the chart pages on my web site if you have any doubt that YOU CAN NOT AFFORD NOT TO KNOW THAT ANSWER. There's always something you need to know. You need to learn how to get the information and apply it. Get used to it.
4) No one cares about your money the way you do. The investment industry cares that your money shows up and stays so that it generates the fees to pay their salary. The legal authorities care that laws about managing your money are not broken. There is no law that says it is illegal for you to lose your money in bad investments or for fees and piss poor management to fritter away your future. The market doesn't care about your money, your hopes, or your dreams. It doesn't care about anything, whatsoever, period. You are the only one who REALLY cares about your hard earned money and the return it should earn you. And only you will make the hard choices that need to be made when the time comes. Do you really expect a money manager to fire himself because making you money or stopping you from losing money is more important than him keeping his job?
5) It's not a sin to be wrong. That's why there are erasers and whiteout openly for sale and not behind the counter. I screw up, the President screws up, surgeons and street sweepers screw up, everybody screws up. It IS a sin to STAY wrong. It cost Bill Sams his job and FPRAX and IDETX my money. That's why McMorgan no longer is our only pension fund advisor. Don't let the possibility of being wrong paralyze you. But the idea of being wrong and staying wrong should cause you to break out in a cold sweat. When I look back at the McMorgan era, I do...
6) The investment industry will tell you to stay fully invested at all times; you might miss a money making opportunity and cost them some fees if you don't. Notice how nothing is ever said about missing out on falling into a crater and not losing most of your investment by not being fully invested when it all turns to shit? That would cost the money managers some fees. Besides, you probably may most likely do OK or even well in the long run if you stay long and are lucky and things work out and anyway, they get their fees that way. And besides, they can't charge you fees and take your money if you don't stay the course. It's all about the fees, see... Of course if you look at the charts for FPRAX and IDETX, you'll see that during certain times, having the money in cash in a coffee can or in a money market fund was brilliant investing at its best compared to buy and hold investing. More about this later.

The chart is live. CLICKONNIT



The chart shows my moves into cash and back into stocks since May 1st. I declared victory a coupla months early in March and went partially to cash and it cost me a little in missed performance. Or not. I really don't know or care. It was not worth tallying up. I declared victory three days too late in May and it cost me substantially; a quarter of my return since 9/04 went away in four days time before I went to mostly cash. But I caught most of the move right and I protected 75% of my profits earned since 9/04. I booked a 30% profit in under two years and smoked what I'da done by staying in the B/P Fund. By the middle of May, the market coulda dropped like a stone and I'd have had it mostly covered. By June 9th, I was totally faded; I was pretty much all cash and maximally protected against losses. I was totally protected from profits on the way back up, but that's the way it goes.
As described below, on June 16th I went 50% back in. That worked out OK, and as of Friday afternoon, I'm 80% back in.
If you rub your eyeball on the chart above, you see that my moves 1) Bought me piece of mind during a brutal and bloody downdraft that had the pro's bleeding from the gums. The drop was very ugly in terms of the rate of fall and the lack of any respite on the way down. The lack of any short term bounce made it a very unusual occurrance. And I was in cash for almost all of it. 2) It made me a dollar, too. If you postulate that I was equally represented in each fund, then you can estimate that the midpoint of each heavy vertical bars on the chart represents my positions. It looks like I sold most of my positions at about 5% down from the peak in early May and about 2% in the hole in terms of the price as of the 1st of May. It also looks like I bought back half the positions at about 6% below that. It looks like I spent most of the remaining cash getting back in at 3-1/2% below where I sold. Just as an eyeball guess, I'd say that by selling when things got hairy and buying back when things looked better, that I'd bought not only peace of mind and safety in the case of a severe and prolonged crash, but made back some of the money I'd left on the table by not bailing out earlier. Far out.
See ya at the Hall. We gotta vote on the contract and money allocation if we pass on it. And of course we've gotta move on a special called meeting on the pension plans.... My motion to do so is still outstanding and it's time to firm the meeting up.
[ view entry ] ( 402 views ) [ 0 trackbacks ] permalink ( 3 / 471 )
Never A Dull Moment When It's All About Your Life's Savings... 

Tables and Charts up. I've spent some time polishing the third and sixth pages. They're done for a while. The biggest change is that I finally got around to putting up link to the New York Times "THE END OF PENSIONS" article. I consider it a must read. If the company specific pension system goes down, as taxpayers and participants in a hopefully healthy and surviving pension plan, we might end up picking up some unexpected passengers.

The conclusion of My Most Gnarley Mutual Fund Adventure; The IDETX Chapter.

Monetary policy had been loose in the late 90's; cash was there to be had, but the rates were going higher. The market as a whole was not doing well at the end of the nineties. Much of the economy was suffering under the high rates, but most of the loose cash had run downhill and was piling up in the corner that held telecom, tech, and the internet where a good old fashioned stock bubble was underway. So there was this money management company called Janus and one of their funds was called Janus Twenty Fund. It was/is a hard charging, concentrated, high risk fund. It held twenty or thirty of the hottest stocks. No safety in diversification, but a lot of horsepower if they got it right. When the market narrowed in the late 90's and fewer and fewer stock went higher and higher, they were RIGHT. CLICKONNIT!



Other funds in the Janus family saw what was going on and bought in to the same scenario. Other funds in other families did likewise. During the last stages of the bubble, it was amazing where you could find those same hot stocks. Sector funds totally away from tech etc held these stocks (very quietly) because it was the only way to show any performance and without performance, the client's money went away. These stocks were bought and bought and bought. Many funds acquired outsized positions because these stocks worked, money came in, and it was a no brainer move to buy more of what got ya there. Enter my position in IDETX. The Idex Fund family runs a lot of funds and contracts with outside advisors. My alternate fund to FPRAX was Idex JCC Growth (IDETX). The "J" stood for Janus. I had traded in my value fund for a ride with the Janus hot money boyz.
I rode Idex and their Janus hot money clone fund up to the top along with everyone else who held the same hot money stocks. When we all hit the top as per "New Paradigm or Mean Reversion?" by Jeremy Grantham & Jack Gray. Sep/Oct 1999; Investment Policy Magazine (Google it), I figured that the Idex managers would step off at the top just as the elevator started to go down. Sell the top, book the profits, and I'd live happily ever after. Instead, the managers at Idex actually were only hired hands who owned the same stocks big time back at the ranch. Actually everybody on the Street owned the same stocks and the doorway out was not wide enough to let everybody out at once. I coulda sold my IDETX in the time it took to get a letter with a signature guaranty downtown. Instead I stood by for part of the ride down as everybody bled their positions into the market, driving the prices lower over more than a year.

Opps! I just ran outa weekend. Stay tooned. No change in the 401a portfolio pending developmnents. Fifty two percent cash. Enuf said.
[ view entry ] ( 455 views ) [ 0 trackbacks ] permalink ( 3 / 495 )
You feel like a hero when you break even.... 

Charts and tables up. .

Here's where I was going with the FPRAX and IDETX riff; "Buy and hold", "Be patient, it'll always come back, it always does", "These are world class quality American companies, stay with them, you can't go wrong in the long run," is horse exhaust. CLICKONNIT.



Check this out. Above are the Dow Industrials; 30 of the Great American Companies. Over the long run the trend is up. Check the chart. Forty six years of "in the long run" progress is shown. Of course, in the long run we're all dead. CLICKONNIT.



Check this out. Above is the Dow between '62 and '88. Check out '66 to '83. Seventeen years and breaking even for the fifth time. Not much to show for buy and hold and having patience. Of course if you sold a little on the highs and bought a little on the lows, you did better. Still... We're currently in another period where we have flat performance;six years and counting... We'll undoubtedly get back to even in the long run. It helps to be 22 and have 40 years to go. That's the long run. But it sucks to be 50 and already thinking about taking the first step out the door to retirement. Six to seventeen years of flat performance? That is way too much of a long run...especially given where I'm coming from and going to. Anyway, think bonds are the answer once you get close to retirement? Check the charts on our bond funds against what fuel/housing/food and medical care inflation have been. So....if not buy and hold or bonds, What?

What worked so well for me when Bill Sams was running my money in FPRAX was that he was trading stocks. He ran a small fund, some where about $50-$150 Mil when I started with him in '82 and around $700 Mil in '98, as I remember. In '82 interest rates were sky high. He kept a lot of funds in cash and made a good return on it in the 80's. He had maximum flexibility to roll the money between stocks and cash. He bought when stocks were down and he saw an opportunity and he sold when they went up to where the upside was limited. Then he did it again. You always had to take into account that he was doing very well considering his performance was accomplished with a cash cushion. It was especially good performance once interest rates came down. If stocks went to zero, he'd still have cash to return to investors. Most other funds are 100% invested. Bill Sams had the ability to bail out of either a winning or a losing position quickly because he carried relatively small positions; no bleeding a huge position into the market for many long months along with all the other giant mutual funds, trying to get out as fast as possible without destroying the stock price. He was playing a value game, looking for diamonds in the dirt. He bought stocks that were going down or already down and were going to go up. He was right for years. Then he was not.

Due to the Thailand baht crisis, the Long Term Capital crisis, the Russian bond crisis and other financial crises of the 90's, the Fed flooded the market with dollars and lowered rates. Bill saw inflation on the way and set up for it in gold, commodity stocks, and other defensive positions and stayed the course, regardless. Instead of driving gold and oil up, the money went into the "new economy", dot coms, telecoms, etc and it was FPRAX that blew up. There came a time for me to trade the trader. Whether or not Bill Sams was right in the long run was meaningless. He was costing me big time.

"It is not how right or how wrong you are that matters, but how much money you make when right and how much you do not lose when wrong."
George Soros

So I stopped the losses. I moved on. I had bought and so I sold. I got impatient. I got short runnish. Bill stayed the course, sure he was right. He was. Ultimately, gold, oil and metals soared, eight years later in 2005/6. Bill Sams was "retired" shortly after I was out of FPRAX, in 2000, but long before he was proven right. Management of FPRAX was given to the managers of FPA Perennial Fund FPPFX, a fund that was/is run similarly to FPRAX. Hell, Bill may have trained his replacements. Regardless, the market stayed irrational longer than Bill Sams could stay employed. CLICKONNIT.



Check this out. Pretty good performance since 2000. Last I looked both FPPFX and FPRAX were carrying about 30% cash. So...FPRAX was right, then it was wrong, and now it's right. What does it mean?

YOU CAN'T LOOK AWAY FROM YOUR MONEY. IT'LL GO AWAY IF YOU DO SO LONG ENOUGH. No money manager is always right. No system works all the time under all circumstances. No money manager is above regular review and everyone is subject to replacement if the performance isn't there. It all falls back onto the individual who invested the money. You can't expect a money manager to fire himself. That's your job. There are times when they don't even admit that they've been wrong. Been there. Listened to that on the phone. It's about understanding that it is NEVER a no brainer to give your money to someone else to manage. You have to understand what he is doing, and whether or not it is working. If you get lazy about it, you can end up being the no brainer if/when your money goes away.
Can this even be done? Isn't this a huge amount of work? Don't you have to know what your money managers are holding every single day? Isn't it a huge risk? I think so. No. No. I don't think so. In that order

I think that I can successfully manage my 401a right here with the tools I've got on this site and reading up on the market and economy. Bill Sams was responsible for making me a dollar. That was very good. Teaching me that it is my responsibility to see that I kept, it that was great. Next week, lessons learned from IDETX.

Over the past month, Japan has removed $50 billion of liquidity from the markets. Other central banks are tightening rates or policy or both. The carry trade appears to have been ended. The Fed has sprayed grumpiness from the lip all over the landscape, lobbed threats all over the horizon, and promised the end of life as we know at the very minimum if they eyeball even a trace of pricing power, much less inflation. Markets, portfolio's, and hope have been crushed. My trading account and IRA's are a smoking ruin. Death and destruction and the crimson wing of doom o'er shadowing all, as Darkness and Dispair loom o'er their new domain.... It's Really Very Very Cool. I love the special effects.
The Fed has reinstituted fear in the marketplace, hammered speculators flat, flattened out commodities, and served notice, all between meetings and without raising rates. All while I was mostly in cash in the 401a too. It takes the sting out of the other nastiness in my other accounts. The economy still appears to be OK, the cooling of commodities may extend the post dot com/9-11 crash run, and if the political risk comes out of oil, we may just get by quite nicely. Markets backed and filled Friday after two big short squeeze big time up days. Things look brighter in the short run. I put half my cash back in on Friday, pretty much across the board. See the charts and tables. Yeah, it's kinda cowboy. But look at the charts. If everything turn out for the better, I've bought back in at near Jan 1st levels and I've got no obligation to ride the positions down into oblivion. I'm half cash in case it doesn't work out, so my risk is half what it could be. I have cash to commit on a dip if one occurs so I can get in even cheaper. Ammunition is alway a good thing to have plenty of when things are uncertain. If it goes straight up without me and I only got a half a position on, I can live with that. It won't necessarily be easy as it is a new game as of last month. But no one said it would be easy. It's all about the economy. And that it's still strong gives me hope.

Understand, hope is not my strategy, it's a result of my observation and judgement. Maximizing my opportunity and controlling my risk is my strategy. See ya at the hall. Contract vote coming up...
[ view entry ] ( 383 views ) [ 0 trackbacks ] permalink ( 3 / 463 )

<< <Back | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | Next> >>