Boghies Account Talk

[Boghie]

Regarding the ‘G Fund’.
I'm with you Bullitt.
In a way.

However, America should survive the debt monster because our economic/political system is flexible. It might require just a hint (for example S&P's recent warnings) to initiate the changes required to bring our fiscal house to order. The fact that Christie is moving forward in New Jersey makes me confident.

But, for government (at any level) pensioners I am concerned. TSP is a true ‘lockbox’. Pensions can be jiggered. And, if this economic collapse continues than the public will demand reductions to government pensions.

Thank God I didn’t even know I had a pension portion of my retirement. I invested lots into TSP because I thought that was my only retirement asset. And, it is a good asset.

Now, to put some into a Roth IRA. If the gubmint (any level) wants to jigger the law to grab more of my retirement income stream (via high income tax) than I can wait the fools out.

 

[Boghie]

A Black Swan Sighting!!!

I don't think our President is Superman...

Carter II seems to be a 'Black Swan' flapping around up there.

Then again, why limit this 'Black Swan' sighting to economic maters. Foreign affairs doesn't seem to be a strong point either. Debt management. Crisis management. President Obama's Healthcare seems to be getting - unexpectantly - more expensive as the days progress. And, Porkulus. Uuuggghhhh.

Black Swan definition:

The Black Swan Theory or "Theory of Black Swan Events" was developed by Nassim Nicholas Taleb to explain 1) the disproportionate role of high-impact, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, and technology, and 2) the psychological biases that make people individually and collectively blind to uncertainty and unaware of the role of the rare event.​

Taleb is correct. Why pick now to invest in growth. Capital preservation is the key to success for the next few years. And, guess who is fully invested. Yup, me. Hope springs eternal. Kinda need some change.

 

[Bullitt]

The book by Taleb wasn't that bad, but the term 'black swan' is widely abused and seems to come up every time something 'doesn't turn out the way it's supposed to.' I heard someone call the perfect game blown call this past week a black swan.

Yeah. Roth IRA is a good idea, and with capital gains taxes increasing, it only makes the Roth more attractive. However, I don't believe that when someone like me who saves more than they probably need finds out that uncle sam will take a chunk for the coffers to pay for our sins of the past decade when they withdraw money from the Roth in 30 years.

Most of my Roth IRA is in cash, and I really don't care what the buy and holder propaganda says in that you should invest lump sum right here right now. Not when I believe this market is going to go to the March 09 lows in the next few years will I put money to work right now. Call it fear, call it whatever, but I believe that plopping your money down arbitrarily because you have the money is not smart. It's merely falling into the trap from the biggest bullish propagandists in the world: Mutual Fund companies. I am going to go to an indexing strategy in the Roth IRA and eventually in the TSP but here's the rub (and we've talked about this before); you absolutely, positively, no matter what kind of investing style you follow, have to buy in at a good price. What that good price is, nobody knows when it will occur, but right now, prices aren't cheap for anything from autos to houses to soap at Wally World.

My move on the 3rd was just a trade aka, speculation, and not an investing move. What are your plans for this IFT?

 

[Boghie]

I have been thinking this through for some time.

When I started poking around the web and noted that Taleb was a very disappointed Obama voter it clicked for me. President Obama is an agony that keeps on grinding. His actions are erratic. His economic instincts are odd. His belief in central planning is complete. The resulting actions cause massive disruptions. He is a Black Swan.

To wit:

• Spendulus
• ObamaCare
• Business Negative
• Government Motors
• A Silly Drilling Moratorium
• And an Absolutely Massive Deficit

I expect a flat, no growth, economy for some time. Little moves up, little moves down. We have found the trading range. My last trade was based (in part) on early commentary by the Administration that seemed to demonstrate employment growth. Did they understand the statistics? I have never seen such an ignorant administration – on many fronts. Their actions are setting alight many Black Swan Events.

The best investment strategy might be to sit tight in cash.

Thanks for the Alpo Meal Deal in my Golden Years.

But, at least I’ll be able to afford the Alpo.

 

[tsptalk]

Agree. We need stimulus, but in a different way then they are giving it. We need to stimulate innovation, and that is what is being hurt by the current approach.

What is the next "big thing"? Perhaps an alternative energy???. but whatever it is, we need something to push us out of this 10-year rut.

 

[crws]

we could flip to CNG so easily, I just don't get why it's not on the top if the list. Plenty of reserves, relatively consumer friendly, distribution in place...
Perhaps Shell is thinking that way and will lead the charge?
http://online.wsj.com/article/SB10001424052748704596504575271683645534998.html

By PETER LATTMAN And GUY CHAZAN

Royal Dutch Shell PLC said Friday it has agreed to buy East Resources Inc., a closely held U.S. natural-gas explorer, for $4.7 billion, in a transaction that underscores the frenzied global interest in North American shale-gas production.
Warrendale, Pa.-based East Resources is one of the biggest players in a natural-gas exploration area known as the Marcellus Shale, with control of 1.25 million acres across a territory that stretches from West Virginia to New York.
The sale will provide lavish returns for private-equity firm Kohlberg Kravis Roberts & Co., which invested $350 million in East Resources for a substantial stake only 11 months ago. It will also be a boon for East Resources Chief Executive Terrence Pegula, who founded the company in 1983, and still controls it.
Shell's acquisition also includes mineral rights in the Eagle Ford Shale in south Texas.

Check the return on that investment, eh?

 

[WorkFE]

Perhaps an alternative energy???

I believe that energy sources could be an absolute boom plus personal use technology has been pretty consistent and innovative over the last few years. The real prize IMHO will be where the manufacturing of the components for the next big idea.
Caveat: When we start looking at those explorers who take risk (See Gulf of Mexico) and want to put them in prison jump suits we supress innovation.

 

[Boghie]

Agree. We need stimulus, but in a different way then they are giving it. We need to stimulate innovation, and that is what is being hurt by the current approach.

What is the next "big thing"? Perhaps an alternative energy???. but whatever it is, we need something to push us out of this 10-year rut.

Tom,

The next 'big thing' will likely be a massively improved use of an existing technology.

We have spent two decades playing financial and sales games. Stuff that adds little or no value. Even the government got into the game. Outsourcing. Grabbing market share. Hiring consultants. Whatever…

My best guess is that I am physically (sortof) using the technology infrastructure that will be exploited much beyond current adaptations. This is a technology of decentralization. Thus, I can see functions that were – and currently are – centralized being drastically decentralized.

How about power generation. Solar generation is three times more efficient than when I first looked at it (2003). Impressive folks are talking about neighborhood nuclear power generation (good for large communities). I am hearing about folks leasing roof space and power generation from sources other than power companies. We could see power generation become decentralized.

How about employment. The massively greater productivity and the decentralization of production imply that one can be economically as useful in the Grand Tetons as you are in downtown San Diego. And, if you are working from your IPad, why limit yourself to a single employer. We could see product and service management become decentralized.

How about finances. A nanny state (Kalefornea) wants to grab more assets than their proven worth. Well, move your business. Under a decentralized system a business is now a server farm and a corporate license. The employees earn their paycheck wherever they choose to live and work. Production is sourced wherever you get good service for a good cost.

How about government. The taxpayer will demand greater efficiency. That is, drag us kicking and screaming into the 1990s. They may demand less regulation now that energy and employment are decentralizing. They may demand less service now that they realize the cost of those services. They will definitely demand that government decentralize dramatically. Do we really need an EPA when we power ourselves locally? Do we need OSHA when our castle is our office? A Department of Education when choices are plentiful, cheap and results oriented? Right now we are too slow, too fat, too expensive, and too big to survive.

How about the nation state. I can see the spheres of influence collapsing into mega nation states. Everybody in the Southwest is worried about the influx of Mexican nationals. Ever look across the border. Home Depot, WalMart, Target, CostCo, etc… Car and truck manufacturers. What is the language of business south of the border? Why have a bunch of bureaucracies performing duplicative tasks when one will do. Does anyone think that – over time – a Mexican citizen will stick with their kleptocratic oligarchy when they can be governed properly? And, how much governing will we want when the slow moving government behemoth cannot even use military assets to fight dangerous forest fires?

These are the good(?) things that will likely result from the Black Swan. We will demand our independence from centralized management when it becomes evident that the folks managing us centrally have their own agenda and are not likely to be up for the job – who possibly could be up for a job of managing 300+ million folks.

Kinda like Going Gault

 

[Boghie]

I believe that energy sources could be an absolute boom plus personal use technology has been pretty consistent and innovative over the last few years. The real prize IMHO will be where the manufacturing of the components for the next big idea.
Caveat: When we start looking at those explorers who take risk (See Gulf of Mexico) and want to put them in prison jump suits we supress innovation.

Nice comment.

When you punish the innovators you don't get much innovation. My guess is that if Columbus was chained to some dank dark wall of the Inquisitors dungeon he probably would not have discovered the Americas. Just a guess. Maybe if Newton’s nog was lopped off at his shoulders we might not have tracked on the importance of gravity. Just a guess. Maybe if President Johnson had canceled manned space flight after the Apollo 1 disaster we would have canceled space exploration. Just a guess.

I don't think our living, flapping Black Swan realizes this. The current best case is for the innovations to be developed and wait for implementation when the business environment is right. In that case, why the hell am I invested in the stock market?

Good God.

 

[WorkFE]

In that case, why the hell am I invested in the stock market?

Indeed

 

[Boghie]

WorkFE,

Well, the Administration can't talk up a jobs report anytime soon so things should level out. Other than foreign affairs, defense, and immigration what other topics can the Black Swan Administration send into freefall?

Since his/their pattern is to create problems on a bi-monthly schedule I think I am safe for a week or two. Anyway, I usually don't make trades till the market moves for three days to a week.

Thus, I am going to stick this out for another couple of days - maybe through this week. Not going to blow my final IFT. Also, the BP thing will resolve to some extent soon - they are all lawyered up so they are being overly careful about public statements. Also, President Obama and his staff may get busy and go on a vacation where there are no phones and press or something.

 

[WorkFE]

Not the same boat as you. I think I'm sink or swim at this point (Stubborn) unless it looks like we are headed south of 950, which is possible. I'll hold my ground (losing value) but at some point it will become unbearable.

 

[Birchtree]

I doubt that we'll see a death cross of the 50/200.

 

[mayday]

What do ya mean ballsy when your in 100% to?
I think we're in the same boat. Actually its a good time to dive in.
Sink or swim.

 

[Boghie]

Well, it's mid-June...

And, still no action from Congress to soften the 2011 tax code changes for us normal middle class types...

In effect:

• The Marriage Penalty
• Increases in all income tax brackets
• Dividend and Capital Gains tax increases
• And, a new – I mean old – poverty bracket at 10%

Getting kinda late, eh

I thought folks making less than a quarter mil weren't going to see any tax changes.

 

[Boghie]

Remind Me to Never Get...

Folks,

Remind me never to get on the wrong side of Mark Styn's pen.

To wit: The Very Model of a Modern Major Generalist

There are millions of people like Barack Obama, the eternal students of a vast lethargic transnational campus for whom global compassion and the multicultural pose are merely the modish gloss on a cult of radical grandiose narcissism. As someone once said, “We are the ones we’ve been waiting for.” When you’ve spent that long waiting in line for yourself, it’s bound to be a disappointment.​

Ouch...

Just, ouch...

 

[Birchtree]

That's why we have an alien in the white house.

 

[Boghie]

I heard - naturally after yesterday's TSP closing bell - that our Black Swan will alight upon the teleprompter tonight.

He is known for:

• Ignorance
• Inconsistency
• Massive volatility
• Socialist Tendencies
• And, Brash Punishment

So, today the word is out that BP is to lose its off-shore leases.

<sarcasm>His actions will definitely help the economy – that much is certain.</sarcasm>

I expect a market swoon late this afternoon, but will not lock in losses. A black swan event is unexpected; we (the market) have come to expect such action from this President. Then, quietly, someone will convince him to revert to some semblance of common sense. Remember, everything this President promises or does seems to have an expiration date.

What will Britain do? Smoot-Hawley?

 

[Birchtree]

It has become ever more certain to many that we in fact do have an alien in the white house.

 

[Handballer]

It has become ever more certain to many that we in fact do have an alien in the white house.

From inside or outside planet Earth?