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12 comments:
The big picture is that the US is on a course of self destruction. This is a great video from Ron Paul. Look at the sheep Bernanke avoid the question.
http://www.youtube.com/watch?v=AeHWW5gbc0w
Thanks Roger, I greatly value your input. Among Internet financial blogs, I find yours to be a unique and powerful voice of reason and calm. Keep up the great work.
Ron Paul huh. I knew that name sounded familiar.
http://tinyurl.com/7nuzh
Or the video:
http://tinyurl.com/g3mgz
Roger.
I agree with you about stock selling emotion. This of course flies in face of the adage from that trading guru Jim Cramer who says that the first loss is the best loss. In other words sell when the stock takes a hit.
Roger,
Cramer's tongue works faster than his brain. He is the reason I read you. In you I find no hype, no showmanship, just experience and common sense based on it.
I own RIO, an EM ETF, and others,all good stuff. Every one of them plummeted but now my spread sheet chart shows them shooting toward the sky. That is not to say I have faith the market rush from the 50 beeps will last. My bet is that the market will weaken as anxiety, maybe fear, returns.
John
Ron Paul: Once again the effort between 1980 and 2000 to fool the market as to the true value of the dollar proved unsuccessful. In the past 5 years the dollar has been devalued in terms of gold by more than 50%.
But in the past 5 years how much has it been devalued in terms of California Real Estate? Paul seems to assume that the dollar is the only item moving in the dollar/gold trade. I'm not sure how you break out the essential value of gold from the effects of short term moves in investor psychology and other trading dynamics.
Paul also gets pretty far out into tinfoil hat land with his explanations of how our desire to mantain dollar hegemony is the origin of most of our foreign policy decisions. Then again, I'm suspicious of grand theories that claim to explain everything.
Ron Paul:
I'm sure for those that invest on a regular basis and have money, Ron Paul may be far out there. But there are a lot poor people and people who do not understand investing that count on the value of the dollar help their wealth grow. Ron Paul is not a bad guy, and trying to go to bat for the middle and lower class is an honerable thing to do IMHO
Models this week:
Timing Model = 4.5
100% long
Global allocation of long positions
MSCI EAFE Index 30%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 40%
Top US sectors
U.S. Oil & Gas 5.5
U.S. Oil Equipment, Services & Distribution 5.0
Precious Metals 4.0
U.S. Telecommunications 4.0
U.S. Basic Materials 3.0
U.S. Technology 3.0
Composite Internet 3.0
U.S. Health Care 3.0
Top Intl ETFs
FTSE/Xinhua China 25 Index Fund 3
MSCI South Korea Index Fund 3
MSCI Brazil Index Fund 3
MSCI Emerging Markets Index Fund 3
MSCI Hong Kong Index Fund 3
MSCI Pacific ex-Japan Index Fund 3
S&P Latin America 40 Index Fund 2
MSCI Germany Index Fund 2
MSCI Canada Index Fund 2
MSCI Australia Index Fund 2
Strategy 3
EAFE 12.5%
Emerging Markets 12.5%
Money Markets 12.5%
Industrial Materials 12.5%
Agriculture 12.5%
Precious Metals 12.5%
U.S. Large Cap 12.5%
U.S. Small Cap 12.5%
U.S. Long Bonds 0.0%
U.S. REITs 0.0%
Ron Paul's politics are not so much Libertarian as they are isolationist with a touch of the German-American Bunde attitude of the mid to late 1930s.
Sadly for our country, he is far and above superior to any Democratic candidate presently running for the Office of the President.
Roger:
What is your opinion on BIK vs ADRE. There is .20 difference on expense ratio. But if you look BIK:ADRE on stockcharts.com, it is slightly angled higher.
not sure ADRE versus BIK is apples to apples.
BIK is 40% China. If China is a bubble that pops ADRE will clearly feel pain but it would be more of a domino effect whereas BIK would get pounded.
If a bubble is not a concern then the narrower BIK stands to continue to out perform but by going narrower it takes on more risk by definition.
Roger:
Could you express a few more words on asset difference between BIK and ADRE? In certain sense, BRIC to EM is like S&P500 to total stock market for the time being(maybe 10 years later, EM would include an noticeable portion in Africa:-). But the sector distribution are so different. If it is due to selection criteria. Which one is more appropriate? Thanks.
your "which one is more appropriate" seems to look for a permanence that i don't think exits.
The SPX comparison is tough for me because people put 3/4 of their money (sometimes) into the S&P 500 but not any slice of EM.
If you have opinions about which sectors to favor you can look at the mix of each fund and weigh for yourself which one would be more consistent with your expectations.
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