tag:blogger.com,1999:blog-12452759.post112906313794759998..comments2024-03-22T07:12:47.560-07:00Comments on Pitchpull: "Investing 100" and Greybeard UniversityGreybeardhttp://www.blogger.com/profile/11919862790973521778noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-12452759.post-1130044166426640992005-10-22T22:09:00.000-07:002005-10-22T22:09:00.000-07:00The problem is, with some glaring exceptions early...The problem is, with some glaring exceptions early on with Enron, the information was right in front of the analysts' noses. The problem is, since 2000, banks have embarked on a power play that has consolidated the fields of finance, analysis and marketing into one big cozy tangle of rattle snakes. Some of those same banks are the reason I have been traipsing all over the country this year...<BR/><BR/>One of the great fads over the last two decades is project financing, where corporate party puts in 20%, operates the hard assets, and the banks and investors pony up the other 80%. Banks and investors get theirs back from operating revenue of the hard assets.<BR/><BR/>The banks had to sell the long term value of the assets to investors, because no revenue means no one gets repaid. In the midst of being a "partner" the banks are working fees on both ends of the transaction.<BR/><BR/>Meanwhile, the Enrons of the world work over the analysts at S&P, Fitch, etc. Analysts arent rock stars, but Enron turned them into rock stars...<BR/><BR/>Stockholders of today want growth. Enron provided that growth through voodoo economics at its finest known as mark-to-market accounting, which the SEC was complicit in allowing them to do. This accounting allowed them to, well, to make a wild ass guess about the value of a new deal over the life of the entire contract, which might have been a 20 or 30 year contract. ALL of the revenue was booked the day the contract was signed, which was how meteoric growth was sold to investors.<BR/><BR/>Meanwhile, the banks continue to hand out money like a crack dealer on Amarillo Boulevard. Not because the hard assets are worth a damn, but because the banks get fees, again on both ends of the deal.<BR/><BR/>At least a year before the end came for Enron, everything was hidden in the open, in SEC filings.<BR/><BR/>Last month I fired the company that was supposed to be managing my retirement account. Every day, there were at least 40-50 transactions in and out of the different funds professionaly identified for me. Most transactions were made at a loss to me. Yeah, I know, it is a down market, but if my positions are being bought by someone, someone else thinks they have value...<BR/><BR/>Yesterday, ironically, I started looking at where everything was frozen, how future investments are supposed to be made. My proprietary "investment profile" which I made sure was tilted towards aggressive growth-moderate to high risk, was 24% money market account, and 2% spread across the board. The most ludicrous I have found so far is this... there are two fund families that are targeted to certain government bonds. Same investment approach, same bonds, I am equally invested in both (which means I am paying two sets of fees for the same equity position).<BR/><BR/>It took at least a year after Enron for the government to slap wrists of mutual funds for their misdeeds. Between individual companies, banks or mutual funds, I am still convinced it is easier for mutual funds to hide their misdeeds than any of the other bunch.<BR/><BR/>It is a bigger pain in the ass, and more upfront expense, but the future of true rags to riches personal growth (I still remember with great pride the day we moved up from single wide mobile home to double wide...) is formation of own C-corp, owned largely by wife's self-directed IRA, which might also employ a 412(i) [i think] pension plan. Unless current boss is paying health insurance for everyone in the household, might as well shift over to HSA now, because we will all have it forced on us in next 10 years anyway.<BR/><BR/>Finally, you are right about gold as an investment. I have been in and out of gold for 15 years. But there is a huge generational difference I think, in that the 30 somethings have to learn jsut how to keep what they get, before they can try to make it grow. My age cohort is already addicted to interest only loans, and for some reason no one seems to want a house that lists less than $225,000.<BR/><BR/>Banks, debt collectors, and ex-wives attorneys have sharper fangs today then ever before. People think their cash is safe in a bank, but that is because they dont understand how garnishment really works until it is too late. Especially for my generation, people have to understand that holding on to liquid, anonymous assets is a matter of pure survival. Damn right you are hiding stuff, you are hiding your stuff. Because the banks, analysts, and the folks previously hired to manage my retirment account are making their pile, by taking form my pile...Infinitegtrhttps://www.blogger.com/profile/04931263466665114493noreply@blogger.comtag:blogger.com,1999:blog-12452759.post-1129991897802097852005-10-22T07:38:00.000-07:002005-10-22T07:38:00.000-07:00Ahh, a differing opinion!Doncha love a civil disco...Ahh, a differing opinion!<BR/>Doncha love a civil discourse?<BR/><BR/>Worldcom<BR/>Global Crossing<BR/>Enron......<BR/>All happened right under the noses of analyst/experts that know far more than you and I, and were studying ALL the financials!<BR/>I'll agree with you that things can be easily hidden in the fine print.<BR/><BR/>But I'm presently on the third owner/management iteration with my EMS job. Involved in an ESOP, a profit sharing plan, a 403(b) and now on my second 401(k), all this after purchasing my own Mutual Funds for a traditonal and then a Roth IRA, I find myself owning some 20 different funds.<BR/><BR/>I'm sure I owned some Enron, Worldcom, etc., in some of those funds.<BR/>The net result........negligible damage, because of the evil diversification you mention.<BR/><BR/>Remember the old joke, where the old Jewish man prays to win the lottery because he has been a good and devout Jew......after praying three times and not winning, the Lord finally says, "Abe, give me a little help here......buy a ticket!"<BR/><BR/>I hope my post will motivate people to "buy a ticket".<BR/> <BR/>I like Mutual Funds, particularly those that keep their fees low, because I don't have the time to devote to doing the homework on individual stocks. But that keeps me from being ruined by an Enron or Global Crossing, too.<BR/><BR/>I bought Gold years ago.<BR/>Held it ten years.<BR/>Investment results?.......NADA. <BR/>I dumped it, but wouldn't argue about owning some gold coins for barter if the world as we know it comes to an end.<BR/><BR/>Bullets? <BR/>You'll find 22, 22mag, 32, 357, 44mag, and 45ACP close at hand.<BR/>Inserted into the right tool....<BR/>a good investment!Greybeardhttps://www.blogger.com/profile/11919862790973521778noreply@blogger.comtag:blogger.com,1999:blog-12452759.post-1129965651967448602005-10-22T00:20:00.000-07:002005-10-22T00:20:00.000-07:00Nope, you are just wrong as hell this one time.Aft...Nope, you are just wrong as hell this one time.<BR/><BR/>After Enron, WorldCom, and all their siblings, no one should invest a dime unless they know what an 8K is, or if they don't know where to find SEC filings. If a person doesnt understand what is happening when spin-off proceeds are being used to retire intracompany obligations or senior [insider] debts, they ought not invest. If a person hasnt read the Google prospectus/manifesto, and if they don't understand why it was such a big middle finger in the face of Wall Street and the big banks, stay away! Peligrosa!<BR/><BR/>With the exception of a rare handful of funds (such as the Royce funds), most are too diversified, and the fees are too well hidden.<BR/><BR/>Factor on top of that the high divorce rate, and the fact that bankruptcy just became an ugly minefield for the unwashed... <BR/><BR/>bullets and gold coins...Infinitegtrhttps://www.blogger.com/profile/04931263466665114493noreply@blogger.com