Karl’s Permanent Portfolio – 2 year update

So it has now been exactly two years since I made my version of the Permanent Portfolio public and it has outpaced the DOW and the S&P. The net return has been 79.4% while the DOW has had a return of 31.9% and the S&P 23.2% during the same time period. And, for the naysayers regarding my small investment in Bitcoin for the portfolio then one would have to say the same about NVR and PYPL, etc. But if one was to remove Bitcoin from the mix completely, the investment would have been within a point of the DOW’s return without any of the risks in holding just 30 equity stocks or a single ETF for the DOW. This portfolio is eclectic, to say the least, but is designed to weather some heavy financial storms as well. It also has a minimum 10-year horizon, so at two years, it is still in its infancy.

See the full page here: https://karldickey.wordpress.com/karl-dickey-investment-portfolio/

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Barack Obama furthers his efforts to divide American society by calling hard working Americans “lottery winners”

obama

“And if we can’t ask from society’s lottery winners to just make that modest investment, then really this conversation is for show.” This is the statement from Barack Obama earlier this week (see below) when he furthered his attempt to divide the wealthy and the poor. Specifically, Obama was speaking about the wealthiest Americans; however, he fails to credit the hard work, integrity, risk and sacrifice many of those individuals endured to get where they are – whether hedge fund managers, real estate investors, business owners or technology company founders. Obama was not describing silver spooned inheritance driven Americans, he was describing America’s financiers — and his statement completely dismisses and discredits their hard work. The statement comes from forcing more wealthy Americans to pay more to subsidize the failing government school system.

Obama states in his comments, that he does not find the wealthy “evil” but does want the top 5 percent of Americans to pay more than the 50%+ in taxes than they are now. Utilizing government doublespeak he said about hedge fund managers, “I’m saying, that you’re a lower rate than a lot of folks who are making $300,000 per year. You pretty much have more than you will ever be able to use and more than your family will ever be able to use; there’s a fairness issue involved here.”

Obama’s statement implies the wealthiest Americans don’t work for the money they have earned Obama also should have mentioned that, from a global perspective, all Americans are lottery winners simply due to the country we were fortunate enough to be born — a capitalistic society that rewards hard work. Big time Obama supporter, Warren Buffett himself, has said, “I won the lottery the day I emerged from the womb by being in the United States instead of in some other country where my chances would have been way different.” Buffett also astutely states that being born in America will get you so far on its own — it is what you do with it that matters. He is a strong believer in hard work, integrity, hiring quality people and a strong sense of economics is what makes businesses successful. He does leave out a cozy relationship with the right people in Washington, D.C. as Buffett utilizes a healthy dose of crony capitalism for profit.

I wonder if Obama would call hedge fund manager Paul Tudor Jones a “lottery winner?” Jones is a major philanthropist and is the founder of  the Robin Hood Foundation. It does work the government will not do or better yet, cannot do. I do not need to wonder if Obama would call the Koch Brothers “lottery winners.” I believe he would, even though, through hard work, the brothers have transformed their father’s business into the second largest private corporation in America while donating hundreds of millions of their own money to quality charities. Would Obama call Wayne Huizenga a “lottery winner?”

The simple point is when Barack Obama makes statements like these, he ignores and trivializes the heroic efforts of the American business person. He ignores the tremendous number of hours people put into their businesses and the sacrifices they endure to succeed. The result of their success is job production, more money for taxes and more money for charities. Belittling these Americans is shameful as their contributions they have made to America has brought this country to be the leading financial center of the world.

Perhaps, a change to the tax system is in order to make it fairer for everyone. Perhaps the FairTax may be the best option for America and it would eliminate the tax argument of the rich versus the poor.

Barack Obama furthers his efforts to divide American society by calling hard working Americans "lottery winners"

obama

“And if we can’t ask from society’s lottery winners to just make that modest investment, then really this conversation is for show.” This is the statement from Barack Obama earlier this week (see below) when he furthered his attempt to divide the wealthy and the poor. Specifically, Obama was speaking about the wealthiest Americans; however, he fails to credit the hard work, integrity, risk and sacrifice many of those individuals endured to get where they are – whether hedge fund managers, real estate investors, business owners or technology company founders. Obama was not describing silver spooned inheritance driven Americans, he was describing America’s financiers — and his statement completely dismisses and discredits their hard work. The statement comes from forcing more wealthy Americans to pay more to subsidize the failing government school system.

Obama states in his comments, that he does not find the wealthy “evil” but does want the top 5 percent of Americans to pay more than the 50%+ in taxes than they are now. Utilizing government doublespeak he said about hedge fund managers, “I’m saying, that you’re a lower rate than a lot of folks who are making $300,000 per year. You pretty much have more than you will ever be able to use and more than your family will ever be able to use; there’s a fairness issue involved here.”

Obama’s statement implies the wealthiest Americans don’t work for the money they have earned Obama also should have mentioned that, from a global perspective, all Americans are lottery winners simply due to the country we were fortunate enough to be born — a capitalistic society that rewards hard work. Big time Obama supporter, Warren Buffett himself, has said, “I won the lottery the day I emerged from the womb by being in the United States instead of in some other country where my chances would have been way different.” Buffett also astutely states that being born in America will get you so far on its own — it is what you do with it that matters. He is a strong believer in hard work, integrity, hiring quality people and a strong sense of economics is what makes businesses successful. He does leave out a cozy relationship with the right people in Washington, D.C. as Buffett utilizes a healthy dose of crony capitalism for profit.

I wonder if Obama would call hedge fund manager Paul Tudor Jones a “lottery winner?” Jones is a major philanthropist and is the founder of  the Robin Hood Foundation. It does work the government will not do or better yet, cannot do. I do not need to wonder if Obama would call the Koch Brothers “lottery winners.” I believe he would, even though, through hard work, the brothers have transformed their father’s business into the second largest private corporation in America while donating hundreds of millions of their own money to quality charities. Would Obama call Wayne Huizenga a “lottery winner?”

The simple point is when Barack Obama makes statements like these, he ignores and trivializes the heroic efforts of the American business person. He ignores the tremendous number of hours people put into their businesses and the sacrifices they endure to succeed. The result of their success is job production, more money for taxes and more money for charities. Belittling these Americans is shameful as their contributions they have made to America has brought this country to be the leading financial center of the world.

Perhaps, a change to the tax system is in order to make it fairer for everyone. Perhaps the FairTax may be the best option for America and it would eliminate the tax argument of the rich versus the poor.

Billionaires Bill Gates, Charlie Munger and Warren Buffett talk like they are the Koch Brothers

Yesterday, May 4, 2015, Bill Gates (co-founder of Microsoft), along with Charlie Munger and Warren Buffett of Berkshire Hathaway were interviewed on CNBC by Becky Quick. When the three were asked about their opinions on the minimum wage debate, they all sounded like David and Charles Koch. Buffett said yesterday morning, “If you increase the minimum wage dramatically, you are going to change the number of people employed in a significant way. I do want to see people with more money in their pocket, low-income people, and I think the earned income tax credit is a far superior way. It rewards work and it does not destroy the normal demand-supply curve.”

Like most business people, the Kochs feel a government enforced wage standard often works against the very people it purports to help; and Democratic supporters such a Buffett and Gates feel the same. Charles and David Koch are Republicans who support Republican candidates. In response to President Obama’s 2015 State of the Union speech, the Libertarian Party responded with, “Mr. President, your attempts to raise the minimum wage will destroy one of the most important forms of education in this country. Many young people develop responsibility and marketable skills in entry-level, minimum-wage jobs. Those skills make workers more attractive to future employers.”

READ THE REST OF THE STORY HERE!

The Markets

As per my suggestions in December, nice profits were made in DXD and TWM (average 15.7%) as of the close today. No matter what happens tomorrow morning, we are getting out of those positions and adding to the ENER position & perhaps reopening a position in BRK.a.

ENER is perfectly positioned to benefit from the stimulus bill and BRK has been a reliable asset over the years.

The only thing I screwed up on in recent memory is a very small position in CAT. I do not plan to add to this position even with the China expansion and the stimulus bill.

I am putting together a small investment partnership that should be up & running w/in two months. Not sure who will invest with me taking into consideration the issues of Madoff / Stanford here in South Florida, plus the issues with the market. The public is wondering who they can trust and at this point are apparently hoarding any and all cash they have left – very understandable. We plan to open shop nonetheless even if we start with just $1 (partially joking) in my home under the name Blue Shark Partnership. Who knew the Partnership Agreement would be so involved and take so long to get just right. When Buffett started his partnerships, people thought he may be running a Madoff-style Ponzi scheme and he hurdled those criticisms as can I should they be made.

I do not make public predictions regarding market direction however it is clear we are heading for a US Treasury meltdown and the strong potential for hyper-inflation in the near term. I am looking at safe vehicles to profit from those scenarios and will incorporate them into the new Partnership.

Enough Socialism! Capitalism is now dead in America

What is happening to the United States?

Our federal government and the Federal Reserve are rapidly dismantling the America we once knew in trade for a “quick fix” reminiscent of a heroin addict. George Bush was afraid we had an addiction to oil? How about an addiction to government bailouts.

Instead of letting companies fail we are bailing them out left and right with money we do not have. This is now going to cost us trillions of dollars at a time when our government is spending well over 25% of what is coming in from taxes. It is true that if the government did not step in to take over trouble investment banks, banks, and insurance companies that the economic system could potentially collapse as a result of both public fear and lack of trust in our currency, however these cash infusions & bailouts are only exasperating the problem. Whereas we were anticipating a very negative economic situation ten years from now (see I.O.U.S.A. documentary as an example), this year the government has multiplied the negative economic situation causing a more serious situation in five to eight years.

Looking at the spending demographics for the future…well…all I can say it looks very bleak with few places to put your money. So today, when the markets rise thanks to this new “solution”, people with a long term horizon of investing should be shorting the market. Oh, that’s right, I almost forgot, the government has put into effect some mechanisms no longer allowing you to do so! What a convenient way to falsely prop up the market – do away with things that could potentially pull it down and everyone can continue on in the blissful Matrix. Enjoy the market’s rally for so long as it lasts.

The smarter money is leaving this country by the billions. And when Warren Buffett pulls out of insuring bank deposits, you know the game is up.

It is a sad day when so-called Wall Street capitalists have traded in that hat for one that is socialistic, if not communistic. And why are they so willing to give in? To save their own hide.

Although I have used the blog for other things, look for more commentary on the financial markets in the future.