Saturday, March 31, 2012

How I Became A Contrarian

It wasn't until the first year after I graduated college and began working in my profession when I first realized that financial freedom was the key to having some control over my own destiny.

Fortunately, the realization presented itself quickly. It began when I was complaining to my supervisor about the dangers of an ever-increasing workload, and after he got in my face and told me bluntly "Shut up! You're in no position to make any demands, you're going to do whatever I tell you to do."

As any normal person would be, I was pretty hot under the collar. But truthfully, he was right. I wasn't in any position to do anything about it. I had just graduated and had an enormous amount of student loan debt, had recently bought a new car and a new home, and had a very materialistic wife.

I realized that as long I carried a tremendous amount of debt and had no savings, no matter where I worked, I was doomed to be bullied in the workplace by some pathetic limp-dick sell-out with a chip on his shoulder and a bonus in his sights.

My debt made me a prisoner, a slave to the corporate overlords.

After the supervisor's dressing down of me in front of my co-workers, and after my remarkable ability to avoid putting him in the hospital, I made it my mission to learn everything I could about personal finance and investment.. and quickly. I would do the opposite of what my beaten down colleagues who hated their jobs were doing, and become financially independent.

And that's precisely what I did. In just a few years, I paid off "all" of my debt, dumped the gold-digger, and became a successful contrarian investor. All it took was an understanding of peoples' behaviors, changing my perspective on life, and doing something about it.

Friday, March 30, 2012

Weekly Wrap

Stock market action over this past two weeks had me chuckling. So tell me, just how many of you became fearful, got shaken out of the bushes, and moved out of stocks the last half of this month? Personally, market action the last two weeks of March has given me even more reason to be bullish.

According to -
Broad support on Friday helped the S&P 500 come back after booking three straight declines. The effort helped feed a weekly gain of 0.8%, which stands as the eleventh weekly advance in 13 tries for the S&P 500. That hot streak drove the broad market measure to a 3.1% gain for March -- its fourth straight monthly gain -- and a 12.0% gain for the first quarter.
The S&P 500 Index ended the week at 1408, rallying to around a 24% gain since my initial forecast.

But I believe that's not the only good news. Being that it was the end of a great quarter, many money managers whose jobs are dependent upon generating alpha for their investors, had to realize their gains by selling their long positions. It was imperative they lock in their gains in order to show their investors how successful they've been, right? Otherwise, impatient investors will lose faith in their perceived "abilities" and move their money elsewhere.

But now, those same money managers must reinvest those realized gains back into the markets in order to keep generating alpha. Being in cash or Treasuries won't generate any gains what-so-ever. Bonds are facing significant interest rate risks, and gold and silver are at peaks levels while facing an improving economy. The Fed has already proven that economic failure is not an option anywhere.

On the other hand, stocks continue to fare well in an improving economy, pay higher dividends than many fixed-income investments, are fairly valued, and are generating significant alpha right now.

So, where do you think those money managers will reinvest first quarter's realized gains?

IMO, they MUST continue invest in stocks again in order to remain competitive. And as they do so, the stock markets will continue to climb. It's one big perpetual hypocrisy in which success draws in even more investors, leading to even higher stock prices. So, I'm leaving my portfolio alone for now.

Sound too corrupt for you? Well then, you might want to re-evaluate your perception of the rules.

Corruption from menoargenti on Vimeo.

Friday, March 23, 2012

Self-Control Is A Predictor Of Financial Success

The more self-control people exercise, the more financially-successful they become. At least that's what Grover, Elmo, and Duke University psychologist, Terrie Muppet Moffitt, have to say.

Source: Making Sen$e

Thursday, March 15, 2012

The 2012 Business Roundtable

The POTUS met with a group of his supervisors last week to explain, according to On The Money, that “The economy is getting stronger and the recovery is speeding up," and "The question now is: how do we make sure it keeps going?” "If you’re a CEO that’s willing to bring jobs back to America, we want to do everything we can to help you succeed," Obama said.

But, being the busy executive that he is, the POTUS didn't have time to socialize after his speech. So instead, he sent in his economic spokesman to speak at that evening's soirée.

Sunday, March 11, 2012

Bill Moyers | Gretchen Morgenson

Bill Moyers talks with Pulitzer Prize-winning New York Times reporter Gretchen Morgenson about how money and political clout enable Wall Street and financial industries to escape regulation and ensure high compensation for executives at the top.

Gretchen Morgenson on Industry Influence from on Vimeo.

Let me preface what I'm about to share by saying that both Bill Moyers and Gretchen Morgenson are two of the top investigative reporters that I most admire. All of us average Americans owe them both a big debt of gratitude for uncovering, exposing, and consistently reporting about just how corrupted our political, financial, and economic systems have become. I'm just as outraged as them myself.

So, that being said, let me state the obvious -

It doesn't matter how much we bitch about government corruption, crony capitalism, corporatocracy, or plutocracy, or whatever you want to name it; or how much outrage we have that the corruption is allowed to continue without change or without anyone in real power being held criminally-accountable.

What matters most is that we're listening to what's being said -

Corporations run this country and there is nothing we can do about it.

The people running the show don't care that we know about the corruption, don't care what we think, and don't care how angry we get about it. Brooksley Born proved that the system was rigged in the 1990s, and it hasn't changed since. Rhetoric won't change it now.

Our political and economic system will only change when it finally breaks down, chaos ensues, people are held accountable, and blood is shed. When will that be? Who knows? No time soon I would think. Most-likely it'll occur right after the next criminally-instigated financial crisis.

But, instead of being angry about the unfairness, or whining, bitching, and sitting on the sidelines letting the criminals continue to capitalize at our expense, I believe that we should strive to understand the criminal mind, embrace it, and capitalize on their corruption ourselves while it lasts.

And that's why I've been fully invested in the stock market for the past three years.

The criminals are running the show and they're powerful. I'm not going to bet my life savings against them just yet. There is no way that they're going allow a system that's keeping them in power to fail. The system will only fail when no one is expecting it to fail, and right now, people are still worried.

Thursday, March 8, 2012

The Century Of The Self

Sigmund Freud's work into the bubbling and murky world of the subconscious changed the world. By introducing a technique to probe the unconscious mind, Freud provided useful tools for understanding the secret desires of the masses.

Unwittingly, his work also served as the precursor to a world full of political spin doctors, marketing moguls, and society's belief that the pursuit of satisfaction and happiness is man's ultimate goal. To many in both politics and business, the triumph of the self is the ultimate expression of democracy, where power has finally moved to the people.

Certainly the people may feel they are in charge, but are they really?

The Century of the Self is an award winning British television documentary film. It focuses on how Sigmund Freud, Anna Freud, and Edward Bernays influenced the way corporations and governments have analyzed,‭ dealt with, and controlled ‬people and tells the untold and sometimes controversial story of the growth of the mass-consumer society in Britain and the United States. How was the all-consuming self created, by whom, and in whose interests?

If you haven't seen this Adam Curtis documentary before, it's a must watch. The Century of the Self details the history behind how America was transformed from a democracy and into a corporatocracy during the twentieth century. Here's the trailer -

Archived full version: The Century of the Self

Sunday, March 4, 2012

Just Restating My Bullish Case

Exploring new frontiers tends to make people nervous. But, don't be played again by a financial news media with their own hidden agenda trying to instill fear in your hearts. This type of fear-mongering happens every time the stock market reaches a new high or low level. It's been happening for the past three years, and media pundits have been wrong the entire time.

The stock market rally isn't going to fall head over feet. If anything, this crazy stock market is telling me that she's not leaving anytime soon. But, don't just take my word for it. See what she says -