Average investors are getting screwed and are exposed to the elements of Wall Street excess!

If you are Investing in managed mutual funds, your getting screwed. At very least, you are exposed to the elements and frozen in one spot.



Does your investment adviser think you should be in mutual funds? Does he work for the fund company? Is he more interested in "his" portfolio than yours? Is he texting on his blackberry while you are handing over your meager Retirefunds? does he forget your name? Did he ever know your name?

"The Rich" as Voltaire said, "Require an abundant supply of the poor"!

The monstrous mutual fund industry is built on a simple premise. You give your hard earned money to someone you know, usually only by reputation. That fund manager then invests your money in the markets, in stocks, bonds, gold, commodities and/or companies that are involved in any of these or a myriad of other businesses. Depending on the fund(s) prospectus (an explanation of how it invests your money), you could be invested in any country in the world (or group of countries) The fund manager is paid a salary along with all of his staff, and their company earns money by charging you a percentage of all monies invested. The manager can also earn bonuses based on his agreement with the company, whether he performs or doesn't perform.

Congratulations! You have just hired one of the highest priced bookies in history! They make money whether you win lose or draw. Usually it is lose or draw in the modern mutual fund industry.

Fully 60% of "all" fund managers "do not" beat the index of the market they are invested in. Many are "closet indexers". In other words, they say they are active managers but invest your money by simply matching the index (buying the companies that make up the Index in the exact proportion as they are weighted to the Index). Usually they collect anywhere from 2%-3% of your portfolio, every year, for this so-called management. Why do you keep shoveling your hard earned money into this bloated, gluttonous industry? There is no other industry out there that is so grossly overpaid for providing so little.

This industry got it's start at a time in history when average people were "shut out" of the information streams that made fortunes for those in the know. With the advent of the internet, trading platforms, trading software etc, those days are gone. At the beginning of this industry, managed mutual funds were developed as a way that average people could invest and "diversify" their investments like the big dogs always did when they bought individual stocks, but only with a savvy money manager in control of their savings. It was a good premise that, initially, worked for it's investors but it has morphed into a monster that eats billions of your dollars, every single year. Like every other investment scheme ever created by the Gluttons of Wall Street, it has been milked dry, to the point where it no longer resembles the initial product, and value has dried up like a lake bed in Death Valley.

Three distinguished professors of finance studied the returns of 2076 actively managed mutual funds over 21 years ending in 2006. Their conclusion: By applying a sensitive statistical test to separate luck from skill, the study found that 99.4% of the fund managers had no genuine stock picking ability.

Read more at: http://www.huffingtonpost.com/dan-solin/wall-street-packages-luck_b_283262.html

In other words, with today's information avalanche and trading software, "you" can pick stocks and do as well as most of these vultures .

If you feel you just don't know enough about investing or don't have enough time to research individual stocks, and you feel you must give your retirefund over to someone else to invest, then I promise, if you give it to me I will invest it in an "Index fund" which only costs .5% and I will only charge you .5% for my troubles. In that way you will already be ahead by 1%-2%. You will also beat 60% of "all" fund managers in the world and I will become rich on the shoulders of your hard earned money.

Or, you could just invest in the Index fund yourself and cut out the middle man (Me).
(Shoot, I just talked myself out of millions)

I hope you get the picture. (pun intended)

Related articles by Zemanta

• Canadians sitting on $1-trillion cash mountain (financialpost.com)
• You're the Boss: Year-End Tax Moves: Dump Your Losers (boss.blogs.nytimes.com)
• How the meltdown is rewriting investment rules (seattletimes.nwsource.com)
• 6 Ways the Recession Will Change Retirement (usnews.com)
• Cautiously, Small Investors Edge Back Into Stocks (nytimes.com)
• Target-date mutual funds need vigilance (seattletimes.nwsource.com)
• Those underperforming bond funds (blogs.reuters.com)
• Dan Solin: Wall Street Packages Luck and Sells It as Skill (huffingtonpost.com)
• Active Management Loses in Risk Study (online.wsj.com)

What happens if President Obama gets Assassinated?

Image via Wikipedia

No one wants to contemplate it. No one wants to discuss it. No one wants it to happen. However it is on the minds of everyone.

What happens if President Obama is assassinated by someone from the radical right? Could this fragile economy be thrown into more turmoil? How would such an event affect your retirement funds, the markets, your safety? What happens after such a tragedy occurs?

Recent Secret Service reports indicate that, President Obama has had three times more death threats from crazies, racists, and far right wing nut balls, than any other President in history. This is not to mention the many terrorists who want to do harm to America. The Washington Post ran a story last month lamenting the fact that United States Secret Service agents are worried that cutbacks to their budget and ranks may add to the possibility of an assassination of President Barrack Obama. (Heaven forbid)

Since President Obama took the oath of office in February, the U.S. Secret Service has received an average of 30 death threats, every single day.

In his new book, In the President's Secret Service Ronald Kessler claims that despite a 400 percent rise in the number of death threats from the 3,000 annually under Bush, Obama's Secret Service team is over-stretched and under-resourced.

Kessler says he was told by a Secret Service agent that "We have half the number of agents we need, but requests for more agents have fallen on deaf ears at headquarters,".

If true, those words should send a chill through every American, and every freedom loving country in the world. Think of the fallout if such an event were to occur.

In just the past month alone, news agencies reported widely on three different men who showed up near where President Obama appeared, with firearms. One had a sidearm in a holster in full view of security officers, and was never arrested. During the Presidents next appearance, two men (let me repeat that) two different men, showed up with "semi automatic assault rifles" strapped to their backs. As I understand it, they too were not arrested. These were only three incidents reported on by the national news agencies. Now just imagine, what "other" events occurred away from the national spot light that we were not made aware of!

Before I retired I worked for our national police force for 36 years. During that time I was privileged to have helped provide body guard services and site security services to 7 different Canadian Prime Ministers, two U.S. Presidents, 2 U.S. Ambassadors, the U.S. Secretary of State, Charles and Dianna and Pope John Paul II. I am no novice in understanding the difficulty of protecting heads of state, but I was flabbergasted at the events of last month. Not one arrest of either of those three men. I couldn't believe it, and neither could my former colleagues.

Were these events a "test" by potential assassins, of the security measures of the Secret Service? (A possibility we would certainly have looked at) Were they "statements" by angry far right radicals, and if so, exactly what was the statement? Were these guys "decoys" for another person or group to elude security personnel? (Another possibility we would have entertained). Or were these three simply individuals from the radical fringe, acting on their own and the coincidence is just that, coincidence!

As a former security officer, I don't believe in coincidence. If it looks like a duck, walks like a duck and quacks like a duck, then it is probably a duck!

The historical significance of this Presidency dictates that, if such an event were to occur at such a fragile time in the history of America, there won't be many safe havens for your investments. The ensuing fallout of such an event would test the very limit of democracy, of freedom, of safety and of civilization within the boundaries of the USA.

Related articles by Zemanta

• Secret Service Funding Cutbacks Put Obama's Life in Danger (themoderatevoice.com)
• Obama at risk from gun-toting protesters? (cnn.com)
• Why Obama is Calm While Carter is Alarmed (tpmcafe.talkingpointsmemo.com)
• Death Threats Against Obama Up 400% (alan.com)
• Newest Hero To Some: Rep. Joe Wilson Who Yelled "You Lie" At Obama (themoderatevoice.com)
• Nastiness Dominates Washington, Anti-Obama Movement (usnews.com)
• The Washington Post: Right Wing Netherworld (outsidethebeltway.com)
• Clinton: Vast, right-wing conspiracy now targeting Obama (videocafe.crooksandliars.com)
• Obama Assassination Poll Rocks Facebook (mashable.com)

The beginning of the end, for fossil fuels! COP 15 and it's affect on "your Retirefund"!

Image by leshumainsassocies via Flickr

"Plans for the end of the fossil-fuel
economy are now being laid."
-- The Economist

The future of energy is at stake, and nothing less!

COP-15 ! Have you heard this term yet? Well you are certainly going to. It is the short title for the "Untied Nations Climate Change Conference", a meeting of heavy weights from around the world in Copenhagen on December 7th 2009. It will absolutely dwarf the Kyoto Accord and it's importance to our planet. The importance to the markets, and investors like us, cannot be overstated either. It is that important! Government and business leaders from 40 Countries are all involved.

The results of COP-15 will win and lose fortunes for many investors. Now which camp do you want to be in, the winners or the losers. I thought so! Now think of a world where producers of fossil fuels, instead of being propped up by governments, will be penalized by governments. Have I got your attention yet? The Copenhagen Summit will convene on December 7th and you should mark this on your calendar.

(From DailyWealth) Everything is being reconsidered:

• The way we create electricity
• The way we power our vehicles
• The way we store and buy our energy
• The way we synthesize plastics
• The way in which we build the buildings where we work and live

As a prelude to the UN Climate Change Conference (COP-15) in May, the "World Business Summit on Climate Change" brought together over 500 participants from 40 countries in Copenhagen at the same venue as the "BIG" Summit on Dec 7th. Here is a quote from one of the guest speakers attending this conference:

"There is not much time. We have to do it this year, not next year, this year. The clock is ticking and Mother Nature does not do bailouts"! Al Gore.

There were many "working groups" at this summit who brainstormed and came up with recommendations for the COP15 summit.

Here is one from thePower Generation working group:

"De-Carbonizing power generation is essential to meeting emissions goals in 2050 and will make a large contribution in 2030."

Here is one from the "Value Chain" working group:

"Establish a transparent international standard for greenhouse gas measurement of products and services across value chains. Any standard needs to be simple, consistent, but nonrestrictive, for example setting minimum standards and common measurement methods".

From the "Aviation working group":

"Increase focus on solution industries, i.e. those industries that offer transformative technologies which can have a net positive impact on emissions"


Recommendations from the "road transportation group" seemed more ambiguous on the surface, but will have a huge impact on investors. Here is an excerpt of their recommendations:

"There is no silver bullet to reducing emissions from the transportation sector and many technologies will have to be developed and tested in parallel".

It is within this backdrop that the world will turn it's attention to the summit in Copenhagen on Dec 7th. What is decided there will not only affect the health of this planet, but the health of investors, pensions funds, and markets around the world, and more importantly from our point of view, your Retirefunds!

It is the future of energy that is at stake, and nothing less! This is the reason I have invested in companies like Ballard Power Systems of Vancouver as well as Natural Gas, solar and wind energy companies.

"Could be the largest economic opportunity of the 21st century."
- Venture Capital Firm Kleiner Perkins Caufield and Byers

There won't be a bailout. There will be a colossal re-investment of the worlds resources into these green companies, and away from the carbon producing fossil fuels like coal and oil, and the companies that produce them. No one knows for sure just which green technologies will win out in their respective areas (power generation, construction, transportation, aviation etc) but rest assured, there will be massive investments in all companies who have even a hope of placing in this race.

Do you think this will impact your Retirefund? I don't think it will, I know it will!

Stay tuned. Much more to come!

Update: Oct 1-09 New York Times !
Oct 8 - Impact of the Green Revolution on your Retirefunds.

Related articles by Zemanta

• Canadian film to be shown following UN climate meeting (ctv.ca)
• UN chief warns the world 'will not make it' to agreement on climate change (telegraph.co.uk)
• The US freezes on climate change (guardian.co.uk)
• U.N. Climate-Summit Agreement Still Far Off (time.com)
• Science academies: ocean acidification must be on CO2 agenda (arstechnica.com)
• UN tackles climate change effects (news.bbc.co.uk)
• House passes sweeping energy, climate bill (money.cnn.com)
• China moves toward aggressive renewable energy strategy (green.venturebeat.com)
• Climate change poker: The barriers which are preventing a global agreement (scienceblog.com)
• Another Health-Care Casualty: The Cap and Trade Bill (time.com)
• Fossil fuels still getting largest U.S. subsidies (energyrefuge.com)
• Downturn is 'climate opportunity' (news.bbc.co.uk)

The Argument for investing in Gold!

Image by hto2008 via Flickr

I am not a gold bug. I am a realist, but even at $1000 per ounce, gold may be a good investment right now for several reasons. Here are some of them:

The banks have had a great run this summer. After coming back almost 100% since it's lows in March, I have sold some of my TD Stock. (Yes it is still a good stock, but at 100% return, it's time to take some profit, no matter what stock you are in) I have also solidified some other gains, but continue to hold on to some small tech firms with huge upside potential such as Wilan Technologies and Ballard Power .

I don't believe the United States is anywhere near being "out of the woods" in it's recovery. A year after the crash, Wall Street is up to it's old tricks . There is a very good chance of an even larger correction in 2010 than we saw in 2008. No one really knows of course, but all the warning signs are in place. The bounce in the markets has been spurred by massive Government interventions, to the point where the most important man on Wall Street is Barrack Obama.

Many U.S. banks are still in serious trouble and hundreds more will fail over the next year. Institutions like Fannie Mae, Freddie Mac, AIG, etc, will "never" recover!!! The smartest guys in the room (Goldman Sachs, J.P. Morgan etc) as always, have come out on top, but even they have an uphill battle as the USD battles runaway liquidity while they still have to value those "toxic Derivatives" that haven't gone away. Wall Street bankers are now trying to do to our life insurance policies, what they did to our mortgages. They are still trading in over the counter derivatives with no transparency, and are paying huge bonuses to executives (sound familiar).

The commercial real estate market is facing a real crisis of re-financing. It could actually cause the next crisis. The domestic real estate market is sliding again and will until at least 2011. Creditors like China are searching for other stores of value, outside of the U.S. dollar. Besides commodities, China is investing in gold and actually telling it's citizens to do the same. Several large U.S. hedge funds are also investing in gold and finally, the Hong Kong government is currently in the process of moving their gold reserves to a domestic site from London. Now, if there is another crisis caused by the paper creating Vultures of Wall Street , do you really think the American public will allow their administration to launch even more expensive bailouts? Neither do I. That is why many investors are turning to a standard of value that reaches back thousands of years.

Gold investors know full well that, most of the worlds gold supply is already above ground. That is why major firms often go back to old, proven, gold fields with new technology to find and extract what remains. Let's face it, the days of individuals panning for gold in a river bed are long gone, but that doesn't mean exploration stops. It merely changes.

While contemplating which gold investments to make, I have been following this story with keen interest. A small American gold company, Apollo Gold (TSX: APG) (NYSE - Amex: AGT) of Denver Colorado, started producing gold at it's Timmons, Ontario site called "Black Fox" earlier this year. Since May when it produced it's first ounces of gold from that mine, it has been on the radar of a number of gold speculators and has been rated a strong buy because of that production, which has reached over 32,000 ounces in four months. Many feel it is very much undervalued and currently under the radar.

What has gold bugs truly salivating is a recent drill result that, at least in one new hole, in it's "Grey Fox" site (approx 30 km away) indicated a result of 455 g of gold per ton of ore. Now, in an industry where 3-5 "grams" of gold per ton is considered worthwhile, well.... you can fill in the blanks. Since then they conducted more drilling in August at Grey Fox, which have not been officially released yet, but oddly, two weeks ago, Apollo bought up the mineral rights to the entire stretch of land between Black Fox and Grey Fox giving them access to the entire fault line where, in prior years, there was a very productive gold mine.

One of the previous occupants of these claims, Cameco, sold off it's gold interests to concentrate on Uranium (which it now dominates) In one of it's last reports on this area, it's geologists mentioned that they believed a deeper drill may result in a greater find. Apparently, that's exactly what Apollo Gold has done, with a stunning result! I've noticed the share price go from .30 cents to .45 cents in the past 10 days, as they raised another $10 Million through private placement, and no drill results have been officially released yet. I couldn't resist, so I bought in at .45

12 month Analysis estimates (see below) are $2.76 based solely on the Black Fox production. However, the Grey Fox strike has caused an even bigger stir but we won't know the full story until the most recent results are released in late October 2009. I know this part of the equation is speculation but, sometimes, you have to read the tea leaves as best you can then, take the plunge. I believe that, at this price, I am well protected with at least a 250% upside built in. As the rest of the world invests in gold in the traditional sense (bullion, bars, coins etc) or in the large companies which are already producing large quantities from their mines (Rio Tinto, Barrick, Hemlo etc) I think Apollo Gold might be a home run, maybe even a grand slam. One word of caution: Apollo has it's gold hedged at $876, however it's production cost is $400 and dropping.

The last time I made such an investment,( nine years ago) it was in Novagold at $1 share. It went to $18 At that time, gold was just over $300 per ounce. Many analysts are predicting gold in a year at $2,000. Some are even throwing out a top end of $3,000 or more. That seems extremely excessive to me, but the $2,000 range is possible. Certainly, $1200 in the short term is likely.

If you are tired of feeding the Vultures of Wall Street., you may wish to investigate this opportunity like I did. I am not risking too much and neither should you. Now, don't take my word for this speculative gold play (or anyone's word for that matter). Do your own research on this or any company you wish to invest in. You may wish to invest in gold by merely buying gold bars or coin or buying ETF's (exchange traded funds of gold stocks) as I am also considering.

Apollo Gold Corp - check it out (TSX: APG / NYSE Amex: AGT).

Update Sept 25th 2009, Apollo Stock - over 7 million shares traded in two days!

Nasdaq.com Target price for Apollo Gold

12 Month Price Target Range
2.72 Consensus 2.72 2.72 0.52 Previous Close

Gold Analysts Report!

Oct 16th update: First half of Grey Fox Drilling results - Spectacular!

New: How Gold will factor in the enhancement of solar Technology

New: $2,000 Gold is coming

Related articles by Zemanta

• Gold demand soars among investors (news.bbc.co.uk)
• Good time to short the U.S. dollar against the loonie (financialpost.com)
• A Year After a Cataclysm, Little Change on Wall St. (nytimes.com)
• Investors more skittish about stocks (msnbc.msn.com)
• The Meltdown a Year Later: What's Changed Since Lehman's Collapse? (abcnews.go.com)
• Geithner: Government reducing its markets role (financialpost.com)
• Home Sales Unexpectedly Drop in August: 5 Things to Know (usnews.com)
• Gold surges to record high (financialpost.com)
• Scotiabank sees big bucks in selling gold on the web (thestar.com)
• Gold price hits record high (telegraph.co.uk)
• Gold surges, hits new all-time high of $1,045 (seattletimes.nwsource.com)
• Gold continues its climb (cbc.ca)
• Dollar Hits 14-Month Low; Stocks Rise Boosted by Intel (nytimes.com)
• The Appeal of Gold ETFs (usnews.com)
• Gold: Another day, another record (cbc.ca)

The Gluttons of Wall Street morph into vultures circling to feast on your life insurance policy.

Image via Wikipedia

George Carlin said it best " It's a big club and you're not in it".

They feasted for years on your mortgage, and now the gluttons of wall street are morphing into vultures as they ready themselves and high end investors, to feast on your life insurance policy. Vultures or Vampires? It's hard to say, one will eat your flesh and one will suck your blood.

Sometimes I have to wonder if Wall Street and Bay Street serve any good purpose at all, except to siphon off value from the blood, sweat and tears of average workers and small businesses.

On Sept 5th, Jenny Anderson of the New York Times laid out in an article how Wall Street investment bankers are getting "back to business as usual" as they have, after searching high and low for another carcass to munch on, finally found one big enough to possibly fill their insatiable appetites for at least another few years, or until the next fiasco breaks.

I guess $38 Billion per day, every day, during the last quarter, just wasn't enough for Goldman Sachs to live on. After all, they are paying billions to their executives in the form of bonuses, so I guess they have bills to pay just like the rest of us. It is definitely a problem of perception I believe. Their perception is a return to "the good old days", while our perception is a return to uncertainty, bankruptcy, lost homes, lost jobs and lost dreams.

After selling billions in Credit default swaps, $2 Trillion in Exotic Derivatives no one could understand, and Mortgages sold to people who couldn't afford them, then packaged up by investment bankers who sold them to unwary investors in pieces and insured by foolish insurance companies like AIG, you would think that another scheme of the same sort, with potentially huge numbers (The market tops out over $26 Trillion so even a small piece of it will be enormous), would be out of the question at this point in history. However, if you are a vulture, you don't really care who's carcass you feed on, only that you feed!

People who own life insurance policies depend on them for much of their retirement income. It is precisely those who are targeted. The tastiest morsels are those middle class families with family members who are ill, or financially bankrupt who decide to "sell" their life insurance policy to make ends meet while they try to pay exorbitant fees for their health care, as their insurers abandon them.

Apparently, the ones who die the soonest, are the best food for these vultures!

You may have even noticed some of their offspring, invading those town hall meetings about health care and squawking about socialist medicine being their ruination.

Ruination indeed. Ruination of the middle class, instigated by the vultures of Wall Street.

Updates: Oct 11 NYT - Have the Banks no Shame?

Related articles by Zemanta

• NYT: Wall Street tries bundling life insurance (msnbc.msn.com)
• Derivatives Are Focus of Antitrust Investigators (nytimes.com)
• Wall Street Lobby Fights Against Derivatives Overhaul (huffingtonpost.com)
• Why Goldman gives big clients a peek at its research (dailyfinance.com)
• They Bet Your Life ... Literally (abcnews.go.com)
• So Now We Know Why Wall St. Doesn't Want Health-Care Reform: Death Panels! (crooksandliars.com)
• Les Leopold: Did Wall Street Win the War during the Healthcare Battle? (huffingtonpost.com)

Signals in the bond market are not a positive sign for the recovery.

Image via Wikipedia

In a recent article in Breaking News, Unhappy Conundrum Edward Hadas sheds some light on this question as he points out that, while the bond market is hard to read, the falling yields in the bond market do not bode well for the immediate future of the American economy and market, no matter what explanation one has for them. In the final analysis, bond holders are creditors who like to keep their sights on the bottom line, as opposed to the more optimistic stock market share holder.

Last fall, during the crash, the junk bond market spread was 22 points higher than treasuries, a number that reflected real fear. Today it is at 10 reflecting less fear, but not the comfort level of 5 which is normal. If you want to take a measure of market sentiment, you ignore the bond market at your own peril.

Couple this information with the spike in gold prices ( see: hedge funds buying gold ) and the fact that, insider selling is increasing at a rate of 30-1 as opposed to buying into this market, and you have some clear indicators there is trouble ahead. Add to that the fact that the "cash for clunkers" program is over, there are still 1.5 million houses backlogged for sale, 40% of home owners will be "under water" with their mortgage by 2011, the American consumer is adverse to buying anything right now, the commercial real estate market is headed for a cliff, and newbie Chinese investors are bubbling their own stock market at this writing.

As I warned in several previous entries, " when everyone else is laughing hysterically and pointing up to the sky " on this roller coaster ride, it will be time to get off. Well, they are not laughing hysterically yet, but some are chuckling, getting giddy, and the bull heads of CNBC have gotten out their pom poms. Hell, even some very smart people are cheering from the sidelines.

I've sold much of my bank stock. Have kept some small companies with great upside, and I have bought a gold stock this week that I believe has great upside. Now don't get me wrong, I'm not a wimp. I am a realist. In many ways, I hope I am wrong. I just don't believe I am.

Now, what have you done with your portfolio as the Witch of October approaches? Hopefully you are watching over it like a mother hen, and have not given it to some uninterested money manager who is concerned with his own portfolio. Get a good investment adviser and always sit down with him/her every few months to go over your portfolio.

After all, would you let some stranger have complete control of your home while you were living in it? Your investments are "yours" so look after them.

Related articles by Zemanta

• Breakingviews.com: Ominous Signals From Bonds Data (nytimes.com)
• Bonds pare losses (money.cnn.com)
• What next for corporate bonds? (telegraph.co.uk)
• What's next? Ask the bond market (money.cnn.com)
• Bonds lose ground on stock rebound (money.cnn.com)
• Uh oh. Gold's near $1,000 (money.cnn.com)
• U.S. consumer sentiment hits four-month low (dailyfinance.com)