Obama and the Nobel

So Obama wins the Nobel Peace Prize. Hmmmm? What has he accomplished to deserve that? I guess I'll never understand. Maybe they should deliver his prize via unmanned drone and drop it near a neighborhood around the White House. That's the way we've been doing it in Iraq and Afganistan. 10 $ sez he won't give it to the Iranian protesters.

Elitist Brookfield

Just came from an art show in Brookfield, WI and I refused to pay a $7 admission just to look at crummy art by so called artists. Bah! I'm not paying any of my hard earned money just to look at a bunch of crapola that even a monkey can do. So I sat on a picnic table outside the fence and noticed that somebody had written 'Elitist Brookfield' on the table top. Couldn't have agreed more. Brookfielders think they are so much better than everyone else. It's a bastion of liberal thinking, feminazi looking down there noses, . . . etc, the list is endless.

Al Frankinstein

I guess the folks in Minn. are affected by their lousy weather. The cold and snow must somehow effect their brains. First it's Jesse 'the body' Ventura and now Al Franken. Geez! Can't those people in MN elect someone who isn't a wrestler or a comedian? His appointment makes a mockery out of the Senate. Hopefully everyone will ignore him. Every time I hear his Stuart Smilely voice, I just cringe. I'm good enough, I'm smart enough and . . . well, you get the picture. Remember, Liam the Loose-Boweled Leprechaun wasn't supposed be a senator. The Dems in Washington look even more foolish with this guy on their side.

THE BLACK PLAGUE

With the latest news of the world, it looks like the pandemic we have all heard so much about is finally upon us.  Or is it?  SARS, Avian Flu, Swine Flu.  Time will tell.

I wrote this to/for a Financial adviser who I think paints a little to rosey of an economic picture.

I’m writing this to you today because I’m not too happy with guys like you. Don’t get me wrong it’s nothing personal. I think you are a perfectly fine fellow. It’s just the profession that you are in. One of my best friends is a dentist but I hate going to his office. I tell him the only utensile I like to put in my mouth is a fork. When last we spoke ( remember my , “Welcome to the United Socialist States of America comment) I may have seemed to you to be very pessimestic about what will or is going to happen as far as our investments are concerned, or shall we rename them devalued assets, or not quite toxic securities. And then I see, on the Comedy Channel no less, Mad Moneys Bill Cramer getting verbally chastised by John Stewart about exactly what it is that I was so mad about in the first place. I dislike Jon Stewart but he really stuck a chord with me this time. So here is my take on things and what I think a lot of other people are feeling and thinking about at this terrible financial time.

Everyone’s heard and seen investment advice from the print media, websites, and viewers of many financial TV shows and we’ve been told over and over that history's a reliable guide to investing, but then why is it none of these so called investment gurus could have been more on the ball in regards to this crisis we’re all in now. The next time you hear one of these so called gurus opining on where to put your money now, remember that if they really could call market turns, they wouldn't be sharing the information with you without getting paid for it.

Sure, I think that you can find some guidance by looking at the past, but to say that investing in the here and now or the future, where it all can happen the same way over and over again, is pure folly. Lets look at the Wilshire 5000 Index, which includes all U.S. stocks. Last I looked, it was still 51 percent (or $10.2 trillion, YES TRILLION!) below its high of October 9, 2007. That means that prices have to more than double to get back to their highs. From what I see from my portfolio this is almost exactly the same for us. That is money that is lost, yes lost, for however many years it takes to get back to where we were when this mess started. I’m a simple man you can call it what you want.

Should prices rise 15 percent a year compounded -- a return reminiscent of the great 1982-2000 bull market -- it would still take five years for stocks to regain their highs of 17 months ago. In other words, stocks would have been dead money (with no return except for dividends) for six-and-a-half years. That means that prices have to more than double to get back to their highs. And that's optimistic, because it assumes a good market through the spring of 2014. Which I think is wishfull thinking at best.

This is the second horrendous bear market we've had since 2000, when the tech-telecom stock bubble burst. It took seven years for stocks to regain those highs.

Consider a recent number that turned traditional investment wisdom upside down.

Historically, stocks have produced the greatest long-term return of any financial asset, and "stocks for the long term" was the traditional mantra. The thinking was that investors took on a worthwhile risk by putting money in stocks rather than taking the guaranteed interest on a U.S. Treasury bond. The idea was that the risk would be justified by stocks posting a better return than bonds. But by the end of 2008, for the first time ever, we saw a 25-year period in which long-term U.S. Treasury bonds actually outperformed the Standard & Poor's 500 stocks.

The numbers, from Ibbotson Associates, a Morningstar company that tracks long-term asset returns, were 11 percent a year, compounded, for bonds, versus 9.77 percent for stocks. When rates fall like that, bond prices soar. But now interest rates on long Treasury bonds are so low that they can't fall much further -- which means bonds don't have a great upside either. The Chinese are shaking in their silk slippers.

I'll tell you this, long term investing, in my book, is twenty five or more plus years. WHICH WE DON”T HAVE! What do these 25-year numbers tell you about how to invest today? Absolutely nothing! And this is my point:

I don’t think that what's happened in the past can, will, or should happen in the future, even if the past covers a long period of investing time. Over the very long haul -- from January 1, 1926, through last Thursday -- the S&P 500 stocks returned 9.37 percent a year in price gains and reinvested dividends, this info is all over the web as of late. The big question is will stocks return anything like that from now on? No one knows. History is one thing, destiny is quite another. That’s what I think, and you can tell ‘Bernie’ to put that in his pipe and smoke it.

James B Lansing, a pioneer in sound equipment and home Hi-Fi Systems. Read about his history at http://www.jblpro.com/pages/history1.htm.