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Don Miller after a trade didn't work out!
This week I decided to do a video since the topic addressed was easiest to explain by actually showing you instead of writing about it. Please watch and if you have any questions after viewing, please email me with them. Lots has happened in Europe, but I guess that will have to wait. The video should help you understand our thoughts behind buying and selling utilizing actions within our MA portfolio the last few months for demonstration.  The video shows the past. As I always say, the past doesn't matter in investing, only what is next matters. Go to the Briefing Room to find out what we plan to do next if the market decides to co-operate.
Have a great day!!
John Norquay CEO PivotPoint Advisors |
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Tuesday, May 22, 2012
Video Blog
Tuesday, May 8, 2012
Let The Euro Hangover Begin
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You ever notice how a good crisis seems to change the rules? This is how we got the "Patriot" Act and now Europe is getting the same kind of hangover that the Patriot Act is. The heads of gov't are rolling as the people strike back in the polls. The people are saying they are sick of Big Gov't in cahoots with Big Business. We could probably slip in Big Banks as a sub category to Big Business in Europe's case.
France just elected a President from the Socialist party. He promises to tax the rich up to 75%. There is already talk of the wealthy crossing the channel to the UK to protect their wealth. Will this increase jobs in France? Greece had a huge uprising in their polls as well. The powers that be are being replaced rapidly. In fact the Neo Nazi party just won a bunch of seats in parliament. Doesn't sound like a positive movement to me. The people don't want "austerity" and seem to be willing to take something with the potential of ending even worse.
I read an article by Chris Oliver recently labled "Capitalism is dead, credit new king, says Duncan". Duncan believes capitalism died in 1914 when Europe abandoned gold-backed currencies. It only became worse when the U.S. abandoned the need for gold reserves backing the currency in circulation. Since then global credit has expanded from 1 Trillion to over 50 Trillion. If you aren't sure how much a trillion is, remember this: 1 million seconds is 12 days of seconds. 1 billion seconds is 33 years and 1 trillion seconds is 33,000 years of seconds. Only 9 out of the last 50 years did U.S. credit grow less than 2%. 4 of these 9 years, this slow credit growth caused recessions. We quickly began "printing" or "growing" much more rapidly to pull ourselves out of the recession. This last recession caused us to double our monetary base and many believe we are still in the last recession. This will definitely lead to inflation at some point.
There are about 1.5 Trillion US dollars in circulation in the United States. There are about 15 Trillion US dollars in Europe and Asia. As countries continue to drop the US dollar as the international currency, these dollars will flow their way back to the U.S. If there was 1 dollar in circulation today and 2 dollars tomorrow, do you think yesterdays dollar would have as much buying power? Me either. In fact the definition of inflation isn't prices getting higher, its your money buying less.
Europe is turning over as we speak. Our markets are trying to absorb all the information regarding the changes and longer term affects. Don uses this briefingto describe some of the things going on in the market and our reactions to them. Bottom line is we are exercising great caution as these unknown changes are taking place.
Have a great day!!
John Norquay CEO PivotPoint Advisors |
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Tuesday, May 1, 2012
The Man Who Bankrupted The Bank Of England Speaks:
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George Soros single handedly broke he Bank of England. He is known for his support of progressive causes and is disliked by nearly every conservative on the planet. BUT love him or hate him, you can't discount the fact he is one VERY canny investor. There are three men whose opinions I will weigh heavily whether I agree with them or not (Warren Buffet USED to be a fourth before he became a gov't man). These three are Don Miller, Bill Gross and George Soros. Many talk good stories, but only a few actually perform.
George Soros said in an article recently that he believes "the Euro Crisis is getting worse. It's not over yet, and going in the wrong direction." Soros is of the opinion that the European Union hierarchy have mis-defined their problem and therefor their solutions are only feeding their crisis. He sees investment fleeing FROM Europe due to the discord between the countries themselves and the lack of plausible solutions being offered. Bill Gross said the U.S. will be affected by Europe no matter how fervently we deny it. He said the U.S. needs 5% GDP growth to improve the jobs situation, yet the actual figure is only at 2.2%. The only way to hit the 5% is to have the European economy contribute. So far, they aren't and can't. This adds up to a very slow growth period for the U.S. which makes "buy and hold" or "asset allocation and diversification" strategies painful for retirement planning. As an aside, Don Miller and Bill Gross have a lot in common. Bill Gross is probably the most successful mutual fund manager on the planet with his $250 Billion Total Return Fund. Bill used to be a professional poker player. You ever notice how its always the same guys who show up on the final table in all the major poker tournaments? Its because they know that poker is governed by the same laws as the market. When you aren't sure of your hand, you play conservatively. In other words, when you lose, just lose a little, but don't curb your ability to win big when the right situation occurs. Don Miller is also a big fan of poker and writes about the correlations with the market in his blog. These are two very successful people who disagree with the major tenets of Wall Street hype. Hallelujah. Have a great day!! John Norquay CEO PivotPoint Advisors |
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