Fibonacci Financial

Archive for June, 2009

Every Gambler knows the secret to survival is “knowing what to throw away and what to keep”

The MDD4 is meant to help you know what to throw away and what to keep.

No Dear Reader, Investing is not Gambling.   But most people who think they are investing really are gambling.

Gambling has a negative mathematical expectation.  Ergo, you lose in the long run! It is what keeps the lights on in Las Vegas and pays the massive bonuses on Wall Street.  .

But becoming a serious card player in games such as Texas Hold’em has many, many valuable lessons to teach investors about money management and the psychology of investing.  In investing, you are your own worst enemy.

If you feel you could use my help please drop me a line.

How do we know when

to go against Bonzo (aka: the crowd)

and be a Contrarian Investor?

The Dow Jones Industrial Average is currently providing us with a classic case to use as a teaching tool. 

The Dow is telling us that it most likely will go DOWN.  It is signaling this with a technical formation called a “Head and Shoulders Top“

Before you look at the current Dow chart please read from the classic description in Edward’s and Magee’s Technical Analysis of Stock Trends.  Start with the paragraph below the titled – The Head-and-Shoulders.

Ok, now  please  read one more page and review the sample chart. 

And now the Dow

And how do we know

that the Dow will probably break through the neckline

and enter an intermediate size decline?

WE can get a pretty good idea from the current message being telegraphed to us from the Dow Bullish Percentage Index (aka BPI).

As can be seen on the above chart the Dow has been selling in overbought territory for almost a month.

Watch for a breach of the 8200 Dow level.  If the Dow penetrates the neckline at the 8200 level it will decline much further.

There are a wide variety of ways to participate in this opportunity ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are an introduction to my services and do not constitute investment advice.

In these hard times when we are overwhelmed by the “Cult of Public Service” chant (eg: Obama’s and Kennedy’s “Americorps”), I would like to share one of the greatest charitable secrets in the universe.  If you really want to help people in these hard times, listen to what F.A. “Baldy”  Harper had to say.

F.A. “Baldy” Harper R.I.P.

As incentive to read Baldy’s article I will give a silver eagle to the first ten people who let me know that they read the entire article (click the “Charity” tab at top of this page).  The best way to spread wisdom is to share it.  Please share this article with your friends and loved ones.

To enjoy the wisdom of the Saunts, click on the “Charity”  page tab at the top of this blog to find Baldy’s article on the Greatest Charity.

PS:  I first read this article some 20 years ago and it has greatly inspired the subsequent course of my life.

PPS: I must run and haven’t had time to finish editing the article yet.  But be brave and don’t wait. 

Enjoy this Fibonacci You Tube brought to you by Elliot Wave International.

John Stossel Rules !

Part of investing well is understanding the cultural environment around you.  If you don’t follow John Stossel’s insights you will be missing critical pieces of the puzzle.  Please bookmark his site and stay informed and invest in your education – read Stossel. 

Go to John Stossel at Fox’s website.

“We Are From the Government and We are Here to Help You”

We are so hypnotized by the Divine Right of Democracy or just The Divine Foundation of Government that we are constantly in denial about the Co-dependent relationship between the modern State at all levels and it’s serfs (aka “citizens” yes, you and me).

A recent analysis of the Social Security System is excellent proof of the incompetence of government sponsored safety nets.

Here from the Independent Institute:

SOCIAL SECURITY INCREASES POVERTY

Social Security is often touted as a crucial safety net that protects American retirees from abject poverty.  In reality, Social Security has made it harder for retirees to grow wealthier by reducing their ability to save and thus has contributed to poverty in old age, argues Texas A&M economist and Independent Institute Research Fellow Edgar K. Browning.

For those retiring in 2008:

• Social Security returned an average of slightly less than three percent on retirees’ contributions, adjusting for inflation.
• Had they invested their contributions in a balanced portfolio (60 percent stocks, 40 percent bonds), those retirees would have earned, on average, 5.5 percent – a huge difference when compounded over a lifetime.
• In fact, the annual retirement income provided by a 5.5 percent return is double that provided by the three percent return of Social Security; even more compelling, an investment in the stock market averages seven percent real return, which would mean an annual income of three times what Social Security provides.

Moreover, the yield from Social Security looks even worse when considering that savings fuel investment and economic growth, adds Browning.  It is likely that we would have fewer poor among the elderly had they been free to invest their taxes in private assets.  Once Social Security’s rate of return drops to below two percent, it will only continue to aggravate poverty in the future.

Policymakers are left with the decision to cut benefits or double the tax rates.  Neither option is attractive, but the longer we wait, the harder it is to implement change and the more likely we will be forced to accept substantially higher taxes, concludes Browning.

Source: Edgar K. Browning, “Social Security Increases Poverty,” Independent Institute, August 22, 2008; based upon: Edgar K. Browning, “The Anatomy of Social Security and Medicare,” Independent Review, Vol. 13, No. 1, Summer 2008.

Download the Complete Report at Independent Review:

http://www.independent.org/publications/tir/article.asp?a=688

Take responsibility and provide for yourself and your loved ones.

& Take Responsibility for Your Own Retirement

And Contribute Directly to Local Safety Nets Such as Food Banks and Charities.

This alarming ABC expose is a MUST watch.

Hopefully, you all contacted your financial advisor and bought the buck this last week.  That represents my first recommendation on this site.  The US Dollar is in a Bull Market.  In a Bull Market we buy the pullbacks.  Were you listening?

When I was directing clients OUT of Real Estate 3 years ago,  THEY thought I was crazy ! 

That is why professional guidance is so important.  NO dear reader, “guidance” from a SALESPERSON doesn’t count.

It is incredibly hard to go against the herd at the proper time or for sales people to go against their commission instinct.

Watch this You Tube and enjoy.

On late night TV they are again saying —-  ” Now is the best  time to invest in Real Estate !”

Are the Real Estate Gurus right?

If the answer to this question  is important for you – Let’s chat

Real Estate ALWAYS goes UP!

But I vas just following everyone’s orders.

Remember, there is a time and season for every  MDD4 quadrant of your portfolio.

What is Real Estate’s season now?  Don’t be a stooge – ask.

Current US Financial Crisis Because

The U.S. Constitution Incorporates a Fatal Error.

That fatal error was investing the federal government with the sole power to mint money.  All of America’s Booms have been followed by painful, destructive American Depressions.  These episodes of personal and business financial destruction were a product, in every case, of the PURPOSEFUL MIS-MANAGEMEMT of the national money supply by world governments or their appointees the central banks.  Listen to what Nobel Laureate Friederich von Hayek had to say:

Hayek’s commentary starts with a quote from the Uber Economist.

“For in every country of the world, I believe, the avarice and injustice of princes and sovereign states abusing the confidence of their subjects, have by degrees diminished the real quality of the metal, which had been originally contained in their coins.”

Adam Smith, The Wealth of Nations, pg. 43

Now LISTEN to Hayek’s remedy to the government’s irresistible abuse of the money monopoly.

“In my despair about the hopelessness of finding a politically feasible solution to what is technically the simplest possible problems, namely the money inflation, I threw out in a lecture delivered about a year ago a somewhat startling suggestion,

That government should be deprived of its [always abused]

monopoly of the issue money!

the further pusuit of which has opened quite unexpected new horizons.  I could not resist pursuing the idea further, since the task of preventing inflation has always seemed tome to be of the greatest importance, not only because the harm and suffering major fluctuations cause, but also because I have long been convinced that even mild inflations ultimately produce the recurring depressions and unemployment which have been a justified grievance against the free enterprise system and must be prevented if a free society is to survive“

F. A. Hayek, Denationalisation of Money, pg. 13

I BELIEVE THIS IS THE ABSOLUTE MOST IMPORTANT ISSUE FOR EVERY HUMAN BEING TO UNDERSTAND.

AS LONG AS WE HAVE CENTRAL BANKING AND GOVERNMENT CONTROL OF MONEY WE WILL NOT HAVE A FREE AND PROSPEROUS WORLD.  ERGO IGNORE THIS TOPIC AT YOUR OWN RISK.

Please watch this video to the very end.  Hayek indicates that after an entire lifetime – he deems this his most important legacy.

Politicians should NEVER be trusted with control of the money supply!

I think the founding fathers screwed up – what do you think?

The question you should be asking is – How can I protect myself ???

Ask Us.