Both are pretty scary in their own right but for me it’s the virus because I’m not a doctor or virologist and only know what’s in the news – and I know how unreliable that is. But what is happening in the financial markets was bound to happen, and quite frankly, long overdue. Those who follow money, credit and banking have been waiting for something like this for a long time. The question was never whether or not another major stock market correction would materialize, but what would inspire it. This year’s coronavirus is just that motivation. Once identified it...Read More
Success is a constant pursuit, not a moment in time – especially when it comes to investment. Those looking for overnight success are gamblers, who must rely on luck to win. And that is the riskiest approach to take with investment. The least risky tactic, therefore, is one that seeks success over a long period of time that relies on something more easily had than a blessing from the heavens – like logic, math, historical fact, or better yet a combination of all three.Read More
Investment is more of a discipline than anything else. You must have rules and boundaries – and you must honor them, or else they don’t exist. In my book I mention my rule not to invest in public equity stocks with prices less than $15. It’s a hard and fast standard, and something I just won’t do. Another bedrock principle in my market-driven approach is a rule I call “10-and-3” which goes hand-in-hand with the 15-51™system and a multiple asset class portfolio. Read More
It’s a shame that so many people still feel they can’t invest successfully on their own. They incorrectly believe that managing a portfolio is high finance and stock picking is rocket science. Those false perceptions are exacerbated by a common belief that investing demands too much time that involves constant attention and tinkering. So not true – and I am living proof. With my book and these blogs it may seem as though I live, eat, and breathe the investment markets 10 hours a day, 7 days a week. But like most of you I have a day job that...Read More
Ever since the Federal Reserve changed policy positions in late 2018 the markets have reflected the dysfunction in their rationale. Fed chairman Jerome Powell espouses that his policy decisions are “data dependent.” They look anything but. Notwithstanding the agita caused by stock and bond market volatility nothing – and I mean nothing – in the economic numbers warrant the Fed’s decision to change posture from tight to loose and cut interest rates. In fact, anything that has changed in the economy has been slight, irrelevant, and/or positive. Here are the facts… The U.S. economy is consistently growing, and while it is slightly stronger under Trump growth...Read More
In yet another gross display of managerial incompetence Nike gave its investors another great reason to exit the stock. Their recent decision to pull shoes featuring the first American flag from the shelves during this year’s July 4th celebration is almost as stunning as making former NFL quarterback Colin Kaepernick the face of their brand. It was Kaepernick that convinced Nike to remove the sneakers from circulation because the flag, he believes, is a symbol of racism and hatred towards black people. Kaepernick is an ignorant fool, which is the reason he is no longer playing in the NFL. Yet somehow...Read More
GONE BABY GONE highlighted my contempt for Nike’s decision to glorify the unpatriotic action of kneeling during our national anthem with a multi-million-dollar ad campaign featuring the leader of the movement, former NFL quarterback Colin Kaepernick. That was reason enough for me to sell the stock and replace it with German competitor adidas in my 15-51i portfolio. And while I am not one to constantly tinker with my portfolio, nor do I advocate such practice, managerial malpractice has once again called. This time it was Boeing who rang the bell. Two fatal airplane crashes, one in October 2018 (Lion Air) and the other...Read More
The only reason the whole MEDICARE FOR ALL thing has any mojo is because there’s something seriously wrong in the healthcare and medical insurance markets. The Affordable Care Act only exacerbated the faulty pre-existing condition of those markets. The law misplaced billions of dollars to no avail while screwing taxpayers, consumers, and service providers in favor of freeloaders, bureaucrats, and insurance companies. Let’s start with some basics…Governments control markets through laws and regulations, tax policy and interest rates. Their policies change Market conditions and dynamics, and thus affect corporate performance and stock prices. This can be evidenced by showing how the...Read More
Trade war. No trade war. Trade war. Truce. Brexit is on. Brexit is off. Theresa May’s government looks to be falling apart. Wait a minute, she held on.—But now what? This just in…newly released data shows economic weakness in China is accelerating – and in Europe too. Oh my God – what happened? First things first, none of this is new news. Economic problems overseas have existed for a long time and have appeared many, many times in these blogs. The earliest they appeared here this year was in February’s feature, LURKING IN THE WOODS, followed by ECONOMIC WAR in August, and then...Read More
Volatility returned to the stock market in January 2018 and it hasn’t left, nor should it be expected to leave. It’s a function of the times and conditions. It is election year, after all. So if market instability makes you nauseous then maybe it’s time to reduce your exposure to the stock market – because it’s not going away. Investing is not about buying at the lowest and selling at the highest. That’s a speculative view. Instead successful investment is about buying low and selling high – to profit, according to your objectives and risk tolerances. So forget about trying...Read More
Investing is more of a discipline than anything else. And while I promised myself to not make any portfolio moves until the next major correction, inspiration to make a move now arrived from a most unusual place – Colin Kaepernick. Once a diehard football fan, I drifted away when those bastards started disrespecting my flag and national anthem. Hey, if they can’t stand for my flag I can’t sit and watch their stupid game. If they have “free speech” I have freedom of choice. The significant drop in television ratings for the NFL over that last few years shows that...Read More
Ever since Trump took the reins of the stock market it has exuded many of the qualities of the man himself – bold, optimistic, arrogant, and erratic. And now another adjective can be added – resilient. While it has taken longer than a blink of an eye almost every major stock market index has regained its January 26th high. Only the lowly Dow Jones Industrial Average remains shy of its 2018 peak. It’s still two points short. It also should not be overlooked that while stocks are up strongly in the nine months of 2018 (averaging +8%) they have averaged an 18% gain...Read More
Certain things are taboo in politics, like members of the same Party criticizing one another; unless, of course, they are engaged in an electoral primary. Other actions are not only forbidden but also never seen, like a sitting president criticizing a cabinet member or senior administration official. And then came Trump. Trump is no politician indeed and that’s exactly why he was elected. Millions of Americans feel disenfranchised by, and disenchanted with, both political parties. Trump is the antithesis of them, and completely different from anything ever seen before in Washington DC. And knowing Trump as we all do, it’s...Read More
It was recently announced that the last remaining original member of the Dow Jones Industrial Average, General Electric (GE), would finally be eliminated from the iconic stock market index. It’s about time. Market junkies like me have been calling for a Dow makeover for years. In fact, WHAT’S WRONG WITH THE DOW – AND HOW TO FIX IT was posted way back in 2015. That blog cited structural deficiencies that were causing the Dow to consistently underperform the S&P 500 – and there is no good reason for that. A 500 stock portfolio should never outperform one comprised of just 30 stocks...Read More
February 8th seems like a lifetime ago, as discussions of “correction” and Bear Market have faded into the distance. Since that low point stocks have regained more than 80% of their losses and are just 4% off their all-time highs achieved on January 26, 2018. It has been a rocky road indeed – but then again it’s the stock market, and that kind of travel is not uncommon. See below. So why the volatility? First, it is important to appreciate how high stocks are presently valued. The last time stocks traded at this multiple was during the heat of the...Read More
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