| The Yield Hunter Let's make some money and sleep well at night |
Updated 11/15/2007
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THUD
October 19, 2007
We would write about todays equity markets--except we have been waiting for the markets to realize the
issues that we see ahead for the economy.
We don't want to beat a dead horse---so we encourage you to read through the history below and
in the archives as it tells the story as we see it.
In summary the unfolding of economic issues and events are pretty well written about in our columns so we
will get on with identifying some nice relatively safe income investments
Finally Retail Sales Numbers Reflect Consumer Turmoil
October 11, 2007
If you have watched the retail sales numbers this morning you know that with few exceptions the numbers were extremely soft.
Of course we have heard the normal crapolla out of the analysts---bad weather--good weather and on and on.
We continue to predict a recession in the near future--we have been almost right all the time---but usually early as the obvious
takes longer to play out then we usually recognize.
The consumer is 2/3rds of the economy and they need money to power their spending. So let's follow the money.
----The normal piggy banks the consumer has used---refi's of their homes is gone.
---Jobs are still plentiful and wages are rising modestly
---Year over Year fuel and food inflation has ate up any wage increase.
So simply where does the money come from now?
Click here to find out where it is coming from----you will see that the 'revolving' debt (Credit Cards) are growing at an extreme
pace. From 2002-2005 the growth of revolving debt was around 3.5%----in 2006 it grew to 6.3% and is on pace to be around
7% this year..
We know that it is factual to say that refi's of homes paid off credit card balances in the years 2002-2005 and now that is gone
so the credit card debt is building.--- to what level we don't now yet.
Watch these numbers!! At some point in the future they WILL be more meaningful then they are being credited for today.
.
Will Stocks Go Up Forever?
October 2, 2007
When you are an income investor and you are looking for fairly high yield instruments, whether they be bonds, preferred
stocks, REIT's or whatever it is always kind of painful to watch the Dow, S and P and NASDAQ go up, up and up. Makes you
wonder if it would be just easier to jump in to common stocks of all sorts and try to make you money on the capital gains side
of investing instead of on the income side.
Well--let's look at it another way. Say you held a basket of NASDAQ stocks---say the QQQQ's (Nasdaq 100). They hit a high of
107.51 in 2000. Today they are at 52.00---you would have a 7 year LOSS of over 50%.
In the same year the Standard and Poors 500 Index hit 1498.00. Now it is at 1564.00---a total gain of around 5% in 7 years.
So you can see that over a 7 year period bond type instruments have done much better than general stocks have done. Of
course if you are in the 'right' mutual funds or individual stocks it is a different story. We have found over the years that we are
seldom in the 'right' common stocks and mutual funds at the right time so we are more than happy to target our 7-8% returns
and let the smart guys chase individual common stocks.
Interest Rate Scenario
September 29, 2007 Noon
Yields on the 10 year Treasuries finally moved down by a bit this week after rising after the Fed rate cut. Offshore buyers don't
want to own our debt when they see the value of the dollar getting pounded day after day.
And if you think the dollar has gotten pounded so far--just wait! We are forecasting that the Fed will need to cut rates by at
least another 1% in the next 4 months just to keep the economy from really diving and unless other foreign economies start to
slow badly the dollar is going to slide dramatically.
We have already seen foreign interest rates begin to stabilize, but it is too soon to say they have peaked and will take a rate
peak overseas to stabilize the dollar.
October 19, 2007
We would write about todays equity markets--except we have been waiting for the markets to realize the
issues that we see ahead for the economy.
We don't want to beat a dead horse---so we encourage you to read through the history below and
in the archives as it tells the story as we see it.
In summary the unfolding of economic issues and events are pretty well written about in our columns so we
will get on with identifying some nice relatively safe income investments
Finally Retail Sales Numbers Reflect Consumer Turmoil
October 11, 2007
If you have watched the retail sales numbers this morning you know that with few exceptions the numbers were extremely soft.
Of course we have heard the normal crapolla out of the analysts---bad weather--good weather and on and on.
We continue to predict a recession in the near future--we have been almost right all the time---but usually early as the obvious
takes longer to play out then we usually recognize.
The consumer is 2/3rds of the economy and they need money to power their spending. So let's follow the money.
----The normal piggy banks the consumer has used---refi's of their homes is gone.
---Jobs are still plentiful and wages are rising modestly
---Year over Year fuel and food inflation has ate up any wage increase.
So simply where does the money come from now?
Click here to find out where it is coming from----you will see that the 'revolving' debt (Credit Cards) are growing at an extreme
pace. From 2002-2005 the growth of revolving debt was around 3.5%----in 2006 it grew to 6.3% and is on pace to be around
7% this year..
We know that it is factual to say that refi's of homes paid off credit card balances in the years 2002-2005 and now that is gone
so the credit card debt is building.--- to what level we don't now yet.
Watch these numbers!! At some point in the future they WILL be more meaningful then they are being credited for today.
.
Will Stocks Go Up Forever?
October 2, 2007
When you are an income investor and you are looking for fairly high yield instruments, whether they be bonds, preferred
stocks, REIT's or whatever it is always kind of painful to watch the Dow, S and P and NASDAQ go up, up and up. Makes you
wonder if it would be just easier to jump in to common stocks of all sorts and try to make you money on the capital gains side
of investing instead of on the income side.
Well--let's look at it another way. Say you held a basket of NASDAQ stocks---say the QQQQ's (Nasdaq 100). They hit a high of
107.51 in 2000. Today they are at 52.00---you would have a 7 year LOSS of over 50%.
In the same year the Standard and Poors 500 Index hit 1498.00. Now it is at 1564.00---a total gain of around 5% in 7 years.
So you can see that over a 7 year period bond type instruments have done much better than general stocks have done. Of
course if you are in the 'right' mutual funds or individual stocks it is a different story. We have found over the years that we are
seldom in the 'right' common stocks and mutual funds at the right time so we are more than happy to target our 7-8% returns
and let the smart guys chase individual common stocks.
Interest Rate Scenario
September 29, 2007 Noon
Yields on the 10 year Treasuries finally moved down by a bit this week after rising after the Fed rate cut. Offshore buyers don't
want to own our debt when they see the value of the dollar getting pounded day after day.
And if you think the dollar has gotten pounded so far--just wait! We are forecasting that the Fed will need to cut rates by at
least another 1% in the next 4 months just to keep the economy from really diving and unless other foreign economies start to
slow badly the dollar is going to slide dramatically.
We have already seen foreign interest rates begin to stabilize, but it is too soon to say they have peaked and will take a rate
peak overseas to stabilize the dollar.
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