Posts filed under 'General'
More than 2-½ years ago when I predicted a global stock market crash on my investment blog, even foreshadowing the duration and the severity of the impending crisis by naming it the Peak Investment Crisis, many called my predictions ludicrous and far-fetched. In that article, I specifically stated that the declines in global stock market indexes could easily “dwarf the pullbacks that caused a 10% decline in the London FTSE, a 35% decline in the Indian markets, a 30% decline in the Brazilian markets, and 20% decline in the Japanese markets over a several week period in 2006” and that “it [was] a potential disaster that 99% of people [were] unaware of.” Today, I foresee another enormous disaster with far wider-reaching and more serious implications than even our current global financial crisis. Read more …
May 6th, 2009
Last week, when almost every major US bank manufactured profits out of thin air by changing their regular reporting periods to exclude months in which huge losses occurred, by changing their definitions of bad debt, and by revaluing their assets at fantasy land valuations that they will never receive in the open market courtesy of FASB, this event was a non-event to me because it merely continued the process known as the Enronization of America. This event, the systemic injection of fraud and deceit into nearly every aspect of American life, has been unfolding for decades, even prior to the Enron scandal itself.
Recently, Bank of America CEO Ken Lewis testified that former US Treasury Secretary and ex-Goldman Sachs CEO Hank Paulson instructed him to disobey securities law and conceal material losses in the Merrill Lynch merger from investors. Lewis additionally testified that Paulson threatened to fire him and his entire board if he tried to back out of the Merrill deal. These revelations, too, did not surprise me Read more …
May 1st, 2009
If there is a silver lining to this crisis, it is that most of the investment scams for the past two decades have now been exposed and the search to find solid investment guidance has genuinely become easier. The dirty secret of Wall Street and many commercial investment firms was that their hiring processes were never about hiring the most talented people that truly understood stock markets and macroeconomic trends. Instead, their hiring processes were more about identifying psychological profiles that would produce the best salesmen and saleswomen. The industry’s endless TV and magazine advertisements that revolved around messages of trust and records of operational longevity, in the end, only meant that they were able to perpetuate their scams for several decades longer than the now infamous Bernard Madoff Ponzi scheme. But for the firms that have survived, you can be assured that they will not give up the scams that they’ve perfected for the last several decades. So how can you use this crisis to your advantage Read more …
March 31st, 2009
February 3, 2009
A recent story reported about counterfeit £1 coins out of London made me reflect upon the enormous irony of the story given that our current economic woes have been caused by an unsound global fiat currency system in which all currency is backed by nothing. It made me think, “Is there really any difference between “real” and “fake” money?” Though mass production of counterfeit £1 coins in the UK has been a problem for years now, apparently the counterfeiters have stepped up their game in recent months. At the end of September, 2008, the Royal Mint reported that random samples of £1 coins in the UK determined that 1 out of every 50 £1 coins was fake, an astonishingly large percent. However, the most recent assay conducted by the Royal Mint at 31 locations in the UK has determined that 1 out of every 40 £1 coins is fake, with the total amount of estimated fake £1 coins in circulation in the UK now at 37.5 million pieces.
Currently, all major Central Banks have massively increased their monetary base by hundreds of billions of dollars in relatively short periods of time, with some increases in the trillions of dollars. In order to be able to do so, it is obvious that there are no limiting inputs in the “production” of money other than printing presses, paper, ink and manpower. Read more …
February 3rd, 2009
Q: Has Your Blog Name Changed?
Just a quick note. We decided to change our blog title to “The Underground Investor™” from “Zen of Investing” because we noticed that someone unaffiliated with our company is constructing a website with the title “zen of investing” in the URL, presumably to capitalize off of our regular blog traffic. To make it clear that this website with the “zen of investing” title has absolutely zero affiliation with SmartKnowledgeU™, LLC, and to avoid any future confusion, we have decided to change the name of our blog.
March 9th, 2007
February 25, 2007 – Here is a story that was running in the U.S. markets last week out of San Francisco:
“The Securities and Exchange Commission has begun a broad investigation into whether Wall Street bank employees are leaking information about big trades to favored clients, such as hedge funds, in an effort to curry favor and has requested a wide range of information from at least four major banks” including Merrill Lynch, UBS, Deutsche Bank and JP Morgan. The SEC sought records regarding all stock and option trading data for themselves and their customers for the last two weeks of September. Basically the SEC said that they wanted to discover the extent of “front running” that exists, the act of insiders buying or selling stocks and options ahead of major large volume institutional purchases or sales that virtually guarantees profits. Read more …
February 25th, 2007
February 12, 2007 – If you look at this chart for Newmont mining (NEM) as of February 9, it illustrates that large institutional money is still not on board with gold yet and in addition, for this reason, this a solid anchor for your gold portfolio. How do I know from looking at this chart that institutional money is not on board yet? Because NEM is the most well known major gold stock (actually it may be the only one though I’m not sure) that is a component of the U.S. S&P 500 index. As such, this is the one stock that all institutional managers are familiar with and the one they will dump loads of money into once they finally get on board with gold. Read more …
February 12th, 2007
January 25, 2007 – This past week, I saw a professional newsletter that stated that there was almost nothing good to buy right now. That most major markets including leading emerging markets in China and India were overbought and that a buying opportunity would not present itself until there were major corrections. Though I mostly agree with that statement as it pertains to traditional stocks, this comment reflects how narrowly focused the overwhelming majority of self-proclaimed investment “gurus” out there tend to be. Read more …
January 25th, 2007
January 23, 3007 - Just taking a contrarian position all the time doesn’t mean that you will be right. It takes a much deeper understanding that can be achieved by utilizing the proper information channels that are now available as the information world continues to flatten. Last year, Steve Forbes, publisher of the noted Forbes wealth magazine, went on record at the Las Vegas Gold Show that oil prices would reach $35 a barrel in 2006. Read more …
January 23rd, 2007
January 14, 2007 – In Part I of this three part series, I discussed how the long tail of investment analysis and strategies can help one understand the direction of the U.S. dollar. Here in Part II, I’ll discuss:
How I’ve Used the Long Tail of Investing to Repeatedly Predict the Price Behavior of the Gold
In the SmartKnowledgeU™ newsletter I delivered to subscribers on July 25th, I stated “We believe gold is a great asset to own as you all know by now. In an article you all received several weeks ago, I mentioned that it was a great time to consider buying gold. Read more …
January 14th, 2007
January 11, 2007 - The sharp decline in energy prices in 2007 and the decline in gold has a lot of people running for the hills, including many hedge fund managers who don’t want to become the next Brian Hunter of Amaranth. I’ve stated this before and I’ll state it again. Precious metal ETFs and commodity futures are great for hedge fund managers but terrible for the average investor because hedge fund managers, for the most part, only care about trends and profits in their own wallet (but who doesn’t, right?). But by being able to buy and sell precious metals via ETFs, ETFs have increased volatility in these markets exponentially. Read more …
January 11th, 2007
Q: Is There More to SmartKnowledgeU™ than Just the Zen of Investing (ZOI) Blog?
Just FYI, recently, many people have asked me whether there is more to SmartKnowledgeU™ than just this Zen of Investing blog. The answer is yes. We will be launching a full-fledged online education campus with 23 separate learning modules, exercises, and exams that will enable the individual investor to identify the best risk-reward asset classes as well as the best companies to invest in using a revolutionary investing system that I developed.
Also, I do read all comments in due time and appreciate all comments, including suggestions. In fact one reader suggested that I write a blog entry regarding my favorite asset classes for the next several years. I haven’t yet written a blog entry addressing this request because I address this question in great detail on our coming website. So stay tuned. Our official launch date is just a matter of weeks away.
November 27th, 2006
Q: What Blog Entry Needs No Question?
I guess that latest blog entry wasn’t so light hearted as is the norm with my casual Friday blog entries, so here’s a late addition that should make you smile. This blog entry has no question because the picture to the right says it all. Recently, at a global economic summit in Vietnam, U.S. President Bush, Russia President Putin, Chile President Bachelet and Canadian PM Harper all donned traditional Vietnamese garb for a photo-op. And they all look more ridiculous than Bruce Lee in a Cowboy hat with a lasso.
November 25th, 2006
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