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Investment Performance

Social Security Reform 

Commissions are no Big Deal... Period

Steve's Radio Appearances

What's Inside the Brainwashing Book

A Millionaire's Secret Investment Strategy

The Stock Market - - - A Challenge for Professionals

Portfolio Content Analysis

Operational Questions & Answers

Summary: Typically, 401(k) participants buy the higher priced, last-year-best-performing, and hot sector offerings while they sell or avoid the various products they feel have "under performed" the market. Nowhere else in their lives do they adopt such a perverse strategy. And nowhere else in their thinking would they blindly accept the premise that any one number represents what is, or should be, going on in their personal investment portfolios.

Summary: The risk of loss cannot be eliminated. A simple change in a security's market value is not a loss of principal just as certainly as a change in the market value of your home is not evidence of termite damage. Markets are complicated; emotions about one's assets are even more so. Wall Street spins reality in whatever manner it can to make most investors unhappy, thus increasing new product sales.

Summary: Who wants to be a president; the President of the United States? Social Security reform is the winning ticket. Research supports the thesis that Social Security reform would provide all the lubrication necessary to get our economic ball bearings rolling in the right direction. Economies do not grow, or increase employment, when job providers are taxed and regulated unmercifully, throttling their energy, creativity, and profitability. Consumer spending pushes the economy; we need to do more than hand out a few hundred bucks.

Summary: Today, it's difficult to distinguish one financial institution from another as they compete for the ever-growing pool of investment dollars. Insurance companies, now publicly owned, have become am integral part of an industry that seems uninterested in protecting anything other than their obscenely paid leaders.

Summary: The market has never and will never be a one way ticket to ride (smile Beatles fans). None of the important aspects of the voyage (advances, declines, speed, beginning, or end) are predictable, by anyone, no matter how overpaid or well credentialed. Sooner or later, some gutsy financial gurus will declare the stock market oversold and full of bargains.

Summary: The Working Capital Model (WCM) approach to portfolio performance evaluation eliminates the tears and fears because it is based on more than the current market value illusion of wealth--- a number that won't sit still long enough to ever be meaningful. Market value, within the WCM, is used only to determine what to buy and/or when to take profits

Summary: "Many investors are beginning to think that income investing is every bit as risky as equity investing, but nothing has really changed in the relationship between these two basic building blocks of corporate finance. What has changed in recent years is the nature of the derivative products created by the wizards of Wall Street to deliver both forms of securities to investors. "

Summary: "Many investors are beginning to think that income investing is every bit as risky as equity investing, but nothing has really changed in the relationship between these two basic building blocks of corporate finance. What has changed in recent years is the nature of the derivative products created by the wizards of Wall Street to deliver both forms of securities to investors. "

Summary: "One can only speculate about how much "Bubble Paper" finds its way into the these portfolios, but nearly all of them are managed by the major brokerage firms, and all such firms bonus their brokers on the basis of product sales. It is not uncommon for Wall Street to re-write the syllabus for Investments 101, redefining Quality, Diversification, and Income to suit its own dark purposes… "

Summary: "Every December, with visions of sugarplums dancing in their heads, investors begin to scrutinize their performance, formulate couldas and shouldas, and determine what to try next year. It's an annual, masochistic, right of passage. My year-end vision is different. I see a bunch of Wall Street fat cats, ROTF and LOL, while investors and their alphabetically correct advisors determine what to change, sell, buy, re-allocate..."

Summary: "Whatever happened to the Stock Market Cycle; the Interest Rate Cycle; Baby Jane? How did Wall Street get away with pushing these facts of financial life down the basement stairs? Most investors, I'm beginning to believe, and all financial advisors, media representatives, and market gurus have abandoned these fascinating curves for the comfort of a straight-edged twelve-month playing field... simple, yes; realistic, not."

Summary: "Trading does not have to be done quickly to be productive, and it doesn't have to focus on higher risk securities to be profitable. And perhaps most importantly, it doesn't have to avoid the interest-rate-sensitive income securities that are so important to the long-term success of any true investment portfolio."

Summary: "November is particularly exciting because it hosts the convergence of four Katrina-level forces, all of which are part of Wall Street's conventional wisdom while none of them lead to intelligent investment decision making. And this year we have a special treat in the form of a Category Three market correction in the Value Stock sector. "

Summary: Corrections are as much a part of the normal Market Cycle as rallies, and they can be brought about by either bad news or good news. (Yes, that's what I meant to say.) Investors always over-analyze when prices become weak and lose their common sense when prices are high, thus perpetuating the "buy high, sell low" Wall Street lunacy.

Summary: "The "shock" market is the adult version of childhood thrill rides, but with no predictable beginning or end, and no way of gauging the size or duration of the peaks and valleys. This is one of the very few things that can actually be known about The Market, security groups, and sectors. "

Summary: "When investors start to question why their Municipal Bond portfolios are trailing the gain in the Dow, or when retirees start to buy gold bullion instead of groceries, something is wrong. And it's the same ole stuff that produces the greed and fear that lead to investment-program-destroying mistakes every time! So lets look at the performance of the Dow, to gain some perspective. "

Summary: "In investing, fixed costs are minimal unless you go out of your way to increase them by adopting some form of flat fee, commission-replacement arrangement. A management person responsible for directing your portfolio is a fixed expense; commissions were meant to be variable. .Think about it this way. The major Full Service firms on Wall Street charge backbreaking, obscene, commissions and they stay in the retail business. Would they allow clients with as little as $100,000 to opt for a Flat Fee arrangement if they thought that they would make less money?"

Summary: "So, in addition to the normal risks associated with investing in general, we add: speculating in narrowly focused sectors, guessing on the prospects of unproven small cap companies, experimenting with securities in single countries, rolling the dice on commodities, and hoping for the eventual success of new technologies. "

Summary: "Repetition is good for the brain's CPU, so forgive me for reinforcing what I've said in the face of every correction since 1979... if you don't love corrections, you really don't understand the financial markets. Don't be insulted, it seems as though very few financial professionals want you to see it this way and, in fact, Institutional Wall Street loves it when individual investors panic in the face of uncertainty."

Summary: "Trading does not have to be done quickly to be productive, and it doesn't have to focus on higher risk securities to be profitable. And perhaps most importantly, it doesn't have to avoid the interest rate sensitive income securities that are so important to the long-term success of any true investment portfolio.   ...no more calls of your highest yielding paper when interest rates fall. Instead, you are taking capital gains, compounding your yield Of course its magic… that's what we do here on Wall Street! "

Summary: "Politicians have neither been shy about dictating "proper" behavior to individuals nor hesitant in shamelessly picking the pockets of businesses. At the root of the problem is the tremendous investment the major parties have in nurturing divisiveness, jealousy, and misunderstanding in the electorate. The Corporate Income Tax is a non-productive weight on business decision makers, causing expenditures that would not be considered were they not tax deductible."

Summary: "As Investors, we represent the single biggest voter block in the country. We must respond in one voice to the endless political drivel with a resounding "Money Talks, BS Walks". We want decision makers who design laws that aid economic freedoms, not lawmakers who make decisions that restrict them. Here's the MT~BSW "Financial Plan" for the 2008 Election. Dot Connectors Wanted!"

Summary: "What correlation could there possibly be between an Annual Round Ball Tournament and an Investment Portfolio or its Management? The Final Four is comprised of the best teams, not necessarily the best players. If the legendary Greek was handicapping portfolio management  teams, he would be smiling broadly and rubbing his hands together in anticipation of making odds in the Financial Markets! How cool is this, a game with no end."

Summary: "A correction is a beautiful thing, simply the flip side of a rally, big or small. Theoretically, even technically I'm told, corrections adjust equity prices to their actual value or "support levels". So if you over think the environment or over cook the research, you'll miss the party. Unlike many things in life, Stock Market realities need to be dealt with quickly, decisively, and with zero hindsight."

Summary: "First thing Monday morning I'm going to march into my boss's office and demand a pay cut so that I'll be in a lower tax bracket. The key issue in considering a capital loss is the economic viability of the investment… not your tax situation! Surely, speaketh the Conventional Wisdom prophets, these profits will hang around until next year, thus deferring those terrible taxes! (Worked real well at year-end '99, you'll recall.)"

Summary: "Plain vanilla fraud and theft are less worrisome to me than situations where the general acceptance of misinformation or "business as usual" practices allows inherently bad product ideas and blatant mismanagement to become accepted by regulatory authorities, financial professionals, and myopically gullible consumers. Here are some candidates for future "Blockbuster Scandal Awards" (B S Awards, if you will):"

Summary: "As totally different as these books are in size, subject matter, and writing style, they brought me around to the same periphery broadening conclusions. As investors, we are perhaps the largest single non-partisan constituency in America whether self-employed, employed by others or retired."

Summary: "Establish a profit-taking target for every security you purchase. Avoid Unrealized Gains, Embrace Volatility, Increase Annual Income, and remember that all key investment moments are only visible in rear view mirrors. Keep in mind that you need Income to pay the bills, and examine Market Value numbers at intelligent intervals."

Summary: "Are you surprised that there is no "Social Security Trust Fund"… no investments and no Investment Managers. This is a gigantic Government designed and controlled Ponzi scheme that has worked incredibly well in spite of congressional tinkering and prohibitively high cost. There was always a tax plan for funding the benefits, but never an Investment Plan. "

Summary: "Real Estate investing is not nearly as legally complicated, financially burdensome, or time consuming as you might think. The benefits of this form of Real Estate Investing vs. ownership of the properties themselves should be clear: No attorneys; no debt; no maintenance; no problem." 

Summary: "At least four times per year, security prices are more a function of institutional marketing practices than they are a reflection of the economic forces that (we would like to think) are their primary determining factors. Do you remember the "Circle of Gold" chain letter from the seventies?"

Summary: "Call it foresight, or hindsight if you want to be argumentative, but a long-term view of the Investment Process eliminates the guesswork and points pretty clearly toward a trading mentality that keys on the very natural volatility of the hundreds of Investment Grade Equities out there for your portfolio building attention."

Summary: "How do we create a confidence building Stock Selection Universe? Simply operating on blind faith with one of the common definitions may be too simplistic, particularly since many of the numbers originate from the subject companies".

Summary: "To most investors, the DJIA provides all of the information they think they need, and they worship it mindlessly, thinking that this time tattered average has mystical predictive and analytic powers far beyond the scope of any other market number. It's Wall Street's rendition of 'The Emperor's New Clothes'."

Summary: "Losing money on an investment may not be the result of a mistake, and not all mistakes result in monetary losses. Compounding the problems that investors have managing their investment portfolios is the sideshowesque sensationalism that the media brings to the process. Avoid these ten common errors to improve your performance:"

Summary: "A Government that bemoans the population's low savings and investment rates has only itself to blame. The majority of Americans would agree that investing, retirement planning, and estate preservation would be easier to manage if the Internal Revenue Code was comprehensible. A landslide of American voters would elect any candidate championing IRC replacement surgery."

Summary: "The Stock Market is a dynamic place where investors can consistently make reasonable returns on their capital if they comply with the basic principles of the endeavor AND if they don't measure their progress too frequently with irrelevant measuring devices. Five simple concepts of Asset Allocation, Investment Strategy, and Psychology are summed up quite nicely in the 'The Investor's Creed'."

Summary: "Every December, with visions of sugarplums dancing in their heads, investors begin to scrutinize their performance, formulate coulda’s and shoulda’s, and determine what to try next year. It’s an annual, masochistic, rite of passage."

Summary: "You don’t have to be a professional Investment Manager to professionally manage your investment portfolio, but you do need to have a long term plan and know something about Asset Allocation. Controlling, or Implementing, the Investment Plan will be accomplished best by those who are least emotional, most decisive, naturally calm, patient, generally conservative (not politically), and self actualized."

Summary: "When is 3 percent better than 6 percent? Yeah, we all know the answer, but only until the prices of the securities we already own begin to fall. Then, logic and mathematical acumen disappear and we become susceptible to all kinds of special cures for the periodic onset of higher interest rates. Higher Interest Rates are good for investors, even better than lower rates."

Summary: "Market Corrections can be good for the wallet! Corrections are part of the normal "shock market" menu, and can be brought about by either bad news or good news. If you don’t love corrections (and deal with them like visiting relatives) you really don’t understand the financial markets. Don’t be insulted, it seems as though very few investors see it this way."