Be Sure
To Know
the Difference
Your Life
Will Depend On It!
Flu Bird Flu
Fever Fever
Aches Aches
Chills Chills
Fatigue Fatigue
Nausea Nausea
Stuffy Nose Stuffy
Nose
Saturday, December 21, 2024
Thursday, December 19, 2024
Best Time
To Buy a
House?
When Cost
is Below Rents!
DYI: The obvious downside is that you will
have to wait years before your next opportunity and yet there is the upside for
having a greater down payment, basic savings, along with additional dollars for
retirement since your outlay is less by renting (see chart below).
In my opinion homes purchased today will underperform inflation for the
next 20 years. The house will increase
in price but when you factor inflation when selling, the gain will have a
reduced purchasing power.
Putting some numbers to the equation the gain is 1% to 2% per year on average for the house with inflation on average over the next 20 years at 5%. Doesn’t take a math genius to figure out that home owner is on the losing end.
Rents will go up in cost and yet it will take years (most likely 10 to 15 years) before they catch up to a purchase price of the home. Remember a landlord can only charge what the traffic will bear therefore impossible to arbitrary raise rents unless willing to have numerous units vacant (losing money) in the case of an apartment complex or a house sit idle (losing money again) waiting for the next tenant.
Since the year 2000 a housing crash was required to bring down costs below rents and most likely will be required again for homeownership below cost.
Monday, December 16, 2024
U.S.
Stocks
Massively Overvalued!
Smart Money - Buys Aggressively!
Capitulation
Despondency
Max-Pessimism
Depression
Hope - Silver F
Relief *Market returns to Mean - Short Term Notes & Bills or MMF
Smart Money - Buys the Dips!
Optimism - Gold
Media Attention
Enthusiasm
Smart Money - Sells the Rallies!
Thrill
Greed
Delusional
Max-Optimism Residential Real Estate - Stocks
Denial of Problem
Anxiety
Fear
Desperation - Long Term Bonds
Current Economic Conditions
Prosperity - Moderate
Recession - Shallow
Deflation - None
Inflation - Moderate
Economic Choices
None
Shallow
Moderate
Prominent
Extreme
Saturday, December 14, 2024
Home
Ownership
Joy or Money Pit?
The six main cost pillars of home ownership are:
Upfront costs: These include the ongoing mortgage payment, down payment,
closing costs, and moving costs.
Ongoing costs: These include property taxes, insurance, and maintenance.
Utilities: Homeowners are responsible for utilities like water, sewer,
electricity, internet, and cable.
Homeowner's association (HOA) fees: If the home is part of an HOA,
homeowners must pay a monthly or quarterly fee to maintain the community's
amenities.
Repairs and maintenance: Homeowners are responsible for routine
maintenance and repairs, such as lawn care, pest control, plumbing repairs, roof replacement, and
appliance replacement.
Furnishings: Homeowners may need to purchase new furnishings, especially
if they are moving into a larger home.
Thursday, December 12, 2024
Inflation
The
Killer of Wealth
Since the
Year 2000
Purchasing
Power has Decline
By
-43%
The cumulative loss of purchasing power in the United States since 2000 is significant, with the value of a dollar in January 2000 having the same purchasing power as $1.76 in March 2023. This is due to inflation, which is the gradual loss of purchasing power over time as prices for goods and services increase.
Here are some examples of how purchasing power has changed since 2000:
- Social Security benefits have lost 36% of their buying power since 2000. This is one of the largest losses recorded by a study that compares the growth in the COLA with changes in the price of goods and services typically used by retirees.
- The cost of goods and services purchased by typical retirees has increased by more than 141% since 2000. For example, a $100 a retired household spent on groceries in 2000 would buy only $64 worth today.
- The US Federal Reserve Note (U.S. Dollar)
- Has Lost
- Approximately 43.2% of its value since
- January 2000
Tuesday, December 10, 2024
Sunday, December 8, 2024
Healthcare
CEO's Murder
Is
Another
Fake
By
First published December
5, 2024
I hate to be the bearer
of bad tidings, but that asshole is still alive somewhere, probably on some
island beach. I knew it the moment I saw this story. How? You are about to find
out.
The first clue is that
police released footage immediately to the press, so I knew the police and
press were in on the fake. If this were real they wouldn't be airing it to the public
within hours. It would be considered a snuff film.
The second clue is that
CEOs of big healthcare companies like this are not walking around by themselves
on the streets of Manhattan at night. Precisely for this reason. You will say
this was in the morning, but we can see from footage it was still dark (about
half an hour before sunrise). Tony Fauci and Albert Bourla are known to have heavy
security, and we may assume the same for Brian Thompson.
The third clue is that
the film looks fake. The guy playing Thompson is a bad actor and his reactions are
comical. Plus, notice what no one else has: the SUV right there hits its brake
lights and leaves them on right as the film starts. What does that mean? It
means AAAANNNDD. . . ACTION!
The fourth clue is that
it is convenient, isn't it, that this murder just happened to take place right
beneath a street camera aimed directly at the scene, with our boys center of frame. Front and center, but from the back, so we can't identify Thompson.
The fifth clue is the
photos released the next day of the shooter. No way they would have multiple photos
of this guy with his mask down and smiling. What's the point of a hoodie and
mask if you are going to walk around posing for the cameras with them off?
The sixth clue is the
cutesy messages on the shell casings: DENY DEFEND DEPOSE. Just stinks of Langley,
doesn't it? These effin' script-monkeys don't know when to stop.
The seventh clue is
ex-New York Times crazy cunt Taylor Lorenz coming down on the side of revolutionaries
here, saying Thompson had it coming. Sure he did, but that isn't the weird
thing in this case. The weird thing is that Lorenz is saying it. She's crazy,
yes, but anyone would expect her to be crazy in the opposite pasture here. So
her comments also look scripted, indicating to me she has been paid to make the
event look real. If she has to do that by celebrating the fake death, well
OK. Sometimes that is the best way to
sell an event, you know.
The eighth clue is
social media being inundated with a million influencers and commenters, all
selling this as real. The usual agents crawl out of the woodwork immediately to
shove this story down your throat.
But the ninth clue is
the decider: today it was reported that Thompson was under investigation by the
Justice Department for insider trading, monopolistic practices, and possible
racketeering. So just when he needed to disappear, he did. Just a whacky
coincidence, I'm sure.
More to come, no doubt,
as they catch this actor and try him in a dummy court, to properly salt this
in.
What do you want to bet
it will be a bench trial with a deputy DA prosecuting him?
Thank You
Miles Mathis
Thursday, December 5, 2024
Stocks
Overvalued?
Warren
Buffett Agrees!
Buffett T-bills & Chills: Piled up T-bills, Ditched Stocks, Bonds, and Share Buybacks in Q3
by Wolf Richter •
Cash is king for Warren Buffett. His investment vehicle, Berkshire Hathaway, continued to dump its two biggest stock holdings in Q3, Apple and Bank of America. It was a net-seller of stocks for the eighth quarter in a row, selling $36.1 billion of stocks, and buying only $1.5 billion, for net sales of $34.5 billion. It didn’t buy back any of its own shares. And it further increased its already huge pile of cash, particularly its Treasury bills, according to Berkshire’s Q3 earnings report released on Saturday.
In the quarter through September 30, Berkshire Hathaway piled on an additional $48 billion in cash, cash equivalents, and Treasury bills, bringing the total cash pile to $325 billion, nearly double where it had been a year ago.
DYI: Warren Buffett is simply responding to
the massive historical overvaluation of the stock market in general and
reducing significantly his exposure to any of the high flying technology companies.
DYI is an offshoot to Harry Browne’s permanent portfolio that maintains 25%
at all time in Stocks, Lt. Bonds, Gold, and Cash equivalents. I adjust the exposure based on how far above
or below the mean valuation for Stocks, Lt. Bonds, and Gold anywhere from 0% to
50%. Cash equivalents are my default
position ranging from 0% to 100%. My
adjustment is based simply using a formula that increases or decreases the
percentage held depending on how deep or steep those three assets are away from
their mean. Today and for a very long time stocks are outrageously
overvalued!
Updated Monthly
AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 12/1/24
Tuesday, December 3, 2024
Expected Net Worth
Are you on track to be a Balance Sheet Accumulator of Wealth? To determine if you are, here are three simple levels Gold, Silver, or Bronze based upon your age and income.
Simply use our multiplier based upon your age times your three years average income.
These dollar amounts do NOT include housing values.
Example: $50,000 average income and you are 40 years of age. The Bronze level is 10% (.10) x 40 x $50,000 = $200,000
Bronze Level [10%(.10) x Age] x Avg. Income = Expected Net Worth.
Silver Level [20%(.20) x Age] x Avg. Income = Expected Net Worth.
Gold Level [30%(.30) x Age] x Avg. Income = Expected Net Worth.
Using our example of a 40 year old with an average income of $50,000 if he or she equals or exceeds $200,000 you would be comfortable in relationship to your income. At the Silver Level this would equate to being Affluent $400,000 and the Gold Wealthy $600,000.
At the Bronze Level you will be comfortable plus Social Security in your old age. You are on track to be way ahead of the average saver (which is almost saving nothing).
At the Silver Level Social Security is simply an add on to your income during your old age. At this level your wealth is enough to displace the need for Social Security.
At the Gold Level early retirement (if you so desire) possibly in your early to mid 50's, this would depend upon your average level of income.
The age old adage is so true; live below your means save and most importantly invest the difference. Stay away from personal debt, purchase a house at or less than 2.0 times your income (or the equivalent in monthly rent) purchase modest used car(s) for cash and you are on your way to financial freedom.
DYI
Saturday, November 30, 2024
Gold is stand out value - Lt Term bonds near their long term average - Stocks massively overvalued!
Updated Monthly
AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 12/1/24
Smart Money - Buys Aggressively!
Capitulation
Despondency
Max-Pessimism
Depression
Hope - Silver F
Relief *Market returns to Mean - Short Term Notes & Bills or MMF
Smart Money - Buys the Dips!
Optimism - Gold
Media Attention
Enthusiasm
Smart Money - Sells the Rallies!
Thrill
Greed
Delusional
Max-Optimism Residential Real Estate - Stocks
Denial of Problem
Anxiety
Fear
Desperation - Long Term Bonds
Current Economic Conditions
Prosperity - Moderate
Recession - Shallow
Deflation - None
Inflation - Moderate
Economic Choices
None
Shallow
Moderate
Prominent
Extreme
*******************************************************************
*******************************************************************
Margin of Safety!
Central Concept of Investment for the purchase of Common Stocks.
"The danger to investors lies in concentrating their purchases in the upper levels of the market..."
Stocks compared to bonds:
Earnings Yield Coverage Ratio - [EYC Ratio]
Lump Sum any amount greater than yearly salary.
PE10 .........38.54
Bond Rate...5.13%
PE10 .........38.54
Bond Rate...5.13%
EYC Ratio = 1/PE10 x 100 x 1.1 / Bond Rate
2.00+ Stocks on the give-away-table!
1.75+ Safe for large lump sums & DCA
1.29 or less: Mid-Point - Hold stocks and purchase bonds.
1.00 or less: Sell stocks - Purchase Bonds
0.50 or less: Stock Market Crash Alert!
Purchase 30 year Treasury Bonds!
Current EYC Ratio: 0.56(rounded)
As of 12-1-24
Updated Monthly
Updated Monthly
PE10 as report by Multpl.com
Bond Rate is the rate as reported by
Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX)
DCA is Dollar Cost Averaging.
Lump Sum is any dollar amount greater than one year salary.
Over a ten-year period the typical excess of stock earnings power over bond interest may aggregate 4/3 of the price paid. This figure is sufficient to provide a very real margin of safety--which, under favorable conditions, will prevent or minimize a loss...If the purchases are made at the average level of the market over a span of years, the prices paid should carry with them assurance of an adequate margin of safety. The danger to investors lies in concentrating their purchases in the upper levels of the market.....
Common Sense Investing:
The Papers of Benjamin Graham
Benjamin Graham
The Papers of Benjamin Graham
Benjamin Graham
****************************************************************************************************************************************************************************************
%
Stocks & Bonds
Allocation FormulaStocks & Bonds
12-1-24
Updated Monthly
Updated Monthly
% Allocation = 100 x (Current PE10 – Avg. PE10 / 4) / (Avg.PE10 x 2 – Avg. PE10 / 2)]
Formula's answer determines bond allocation.
Current PE10.....38.54
% Stock Allocation 0% (rounded)
% Bond Allocation 100% (rounded)
% Bond Allocation 100% (rounded)
Logic behind this approach:
--As the stock market becomes more expensive, a conservative investor's stock allocation should go down. The rationale recognizes the reduced expected future returns for stocks, and the increasing risk.
--The formula acknowledges the increased likelihood of the market falling from current levels based on historical valuation levels and regression to the mean, rather than from volatility. Many agree this is the key to value investing.
Please note there is controversy regarding the divisor (Avg. PE10). The average since 1881 as reported by Multpl.com is 16.70. However, Larry Swedroe and others believe that using a revised Shiller P/E mean of 19.6 , the number since 1960 ( a 53-year period), reflects more modern accounting procedures.
DYI adheres to the long view where over time the legacy (prior 1959) values will be absorbed into the average. Also it can be said with just as much vigor the last 25 years corporate America has been noted for accounting irregularities. So....If you use the higher or lower number, or average them, you'll be within the guide posts of value.
Please note: I changed the formula when the Shiller PE10 is trading at it's mean - stocks and bonds will be at 50% - 50% representing Ben Graham's Defensive investor starting point; only deviating from that norm as valuations rise or fall.
Please note: I changed the formula when the Shiller PE10 is trading at it's mean - stocks and bonds will be at 50% - 50% representing Ben Graham's Defensive investor starting point; only deviating from that norm as valuations rise or fall.
DYI
The Formula.
This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.
This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!
The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.
The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.
Use this site at your own risk.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
The Formula.
Friday, November 29, 2024
Desperation
Or
Poor Money Skills?
DYI: The top 10% who own the vast majority of stocks their gains is easily offsetting the current rate of inflation, however as you move down the percentages of stock ownership and especially the bottom 50% inflation has scorched the family budget. Most of those who actually do own stocks they are tied up in their 401k’s unless they borrow or outright sell (with all of the associated penalties) their flat out of luck.
The top 10% who collect roughly half the income and own over 90% of all stocks own 44% of the nation's real estate wealth. The bottom 50% who own a meager 2.6% of the nation's financial wealth own a scant 11% of the real estate wealth. The middle class--the 40% between 50% and 90%--own about the same percentage (45%) as the top 10%.
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