Friday, January 10, 2025

 Momentum Players

Remain in Charge!

DYI:  Valuations is a weighing tool it is not a timing tool.  Obviously today valuations are at insane levels however until this is recognized by enough players stocks will continue their advance.  That advance is now only being powered higher, predominantly by the top 7 stocks called the magnificent 7!

Apple

Microsoft

Amazon

Alphabet (Google)

Meta Platforms (Facebook)

Nvidia

Tesla

The advancing stocks compared to declining stocks listed on the NYSE remains advancing albeit a far lessor pace.  This is doing so by the outsized gains of the Mag 7!

The chart below is a timing tool for the S&P 500 clearly showing  that the momentum players remain in charge, however when the tide turns and momentum moves south valuations will be in charge causing a large percentage drop before the value (valuations) players start moving in pick off the bargains!



Wednesday, January 8, 2025

 War!

Natural Resources

Somethings Just Never Change! 

To the Last Ukrainian: United States Pressures Zelensky to Lower Conscription Age to 18

After lowering conscription from 27 to 25 in April 2024, the Biden Administration urges Ukraine to mobilize more men

2024


As brutal videos of forced mobilization across Ukraine continue to spread online, Volodimir Zelensky and his Western masters are determined to continue fighting the unwinnable proxy war against Russia “to the last Ukrainian”: the United States has started to openly pressure Kyiv to, once again, lower the official conscription age. 

The West wants to send 18-year-old Ukrainians to the front lines as Russian forces advance and Senator Lindsay Graham is getting antsy that trillions of dollars worth of Ukrainian natural resources, primarily located in the Donbas and central Ukraine, will be under Russia’s control.

Monday, January 6, 2025

 The Desk of

Gemma O'Doherty's

Substack

Does Voting Actually Count?

Just substitute Ireland for USA 

How much more evidence do you need before you accept that the State and all of its institutions are riddled with corruption and beyond redemption?

Take the HSE (CDC Irish version)  hell circus which forces poison vaccines on the ignorant every day, is in bed with criminal (P)Harma and run by psychopathic bureaucrats (USA's Dr. Fauci)  and doctors who diabolically danced their way through the Covid scam while mass murdering their patients.

What about the Courts where malevolent political wigs collude with crooked lawyers every day to steal children, homes, businesses and farms from innocent Irish families while writing off debt worth millions of euros from their golden circle? Debt that will be forced on the backs of your children and grandchildren, and is fueling inflation.

DYI:  Our run away national debt machine here in the good old USA!

Back to Gemma:   

What about the legislature which devotes its time to concocting illegal diktats to control the speech and thoughts of the Irish people while demanding to know what they do with their income and private properties, fleecing their wealth through taxation, bringing in hordes of illegal aliens and turning Ireland into a Third World dump?

How about the Gardai, described by whistleblower John Wilson as the biggest criminal gang in the country, who are importing drugs into Ireland to destroy the young - as per the Communist manifesto - framing innocent people and behaving like coked-up thugs in their fabricated ‘far right’ psyops used to manipulate the clueless public?

DYI:  Police departments continue to this day with asset forfeiture instead of arresting the individual they actually (I'm not kidding) arrest their property.  Zero due process and then they have to sue the police department (despite never committing a crime) to recover their property!

Between DHS/FEMA are running mass shooting drills especially at public schools then promoting through the mass media as real (fake shooting events) in order to achieve two ends that benefit the super rich.  

1.) The masses believe this is promote gun control despite any gun restrictions are knock down by the courts repeatedly.  The rich are actually promoting gun sales - a high profit margin business - as they fool gun owners or perspective gun owners to purchase additional firearms (and all things related) before draconian laws are past into law which never happens or is struck down by the courts repeatedly.

2.)  Sales people are talking to school boards around the country selling all of their security products and services in order to protect children from another staged, FAKED, mass shooting!

This is big business as the U.S. has 13,452 regular school districts and 21,548 private schools plus 6,000 colleges and universities that all have multiple buildings.  This is big business all promoted by a scam of one fake mass shooting after another to terrorize children and their parents!  

Back to Gemma:    

Then there’s the State-sponsored media whose sole purpose is to brainwash and gaslight those still naive enough to watch it. Just think of the damage it has done to this country.

DYI:  Our main stream press is State-sponsored media as they are all in (those at the top) everything that is hoaxed or faked.  Faked shootings, fake trials, fake illnesses such as COVID and the big hoaxed/faked 9-11!

Back to Gemma:

Knowing all of this, do you really still believe that the State is there to serve you and is capable of running clean elections? Do you really think that the monsters who have ruined Ireland are going to allow their minions to vote them out in exchange for real opposition? If you do, you’re deluded and in a trauma bond with Big Daddy Government, no different to a battered wife who remains with her violent husband.

DYI:  Dominion voting machines are now so easily manipulated rigging elections is now common place as far as I'm concerned.  All to keep you involved and believing in the system.  A close race but never so close that voters demand a recount thus possibly showcasing vote rigging and even if they do the mainstream media will never report this evidence!

Back to Gemma:

If you’re confused about what to do tomorrow, here is the solution. Ignore the farce. Bin your voting card and walk away. If millions of us refused to vote, the State and its puppetician dictators would know that the sheep have finally woken up to their game and are no longer willing players. That would send shock waves through the system because it would prove that the people are no longer willing to be obedient servants and may assert themselves again into their rightful place as masters in charge of their own destiny. That is a terrifying prospect for the State.

In a tiny country like Ireland, we can manage perfectly fine without government. Wouldn’t you like to hold on to all of your wages? What exactly does the State do except lie, cheat and steal from you? Fraud vitiates all contracts. And the Irish State is a self-serving fraudulent entity that despises the Irish people. The social contract is broken. Let the State collapse as the Crown did in Ireland 100 years ago.

Anyone who is still telling you to vote in this rigged system is controlled opposition. The ballot boxes have long since been tallied with fictional votes to ensure the regime remains in place.

Refuse to participate in organized crime. Refuse to participate in elections. Stop feeding the enemy. When we walk away en masse, we are walking towards the end of our slavery. If there is one group of people who can do this, it is the Irish. Stop being bullied and controlled by sleazy conmen in dark suits and gowns. We are the 99%. They are on the run. Let’s keep them that way and drive them over the cliff before the rollout of their One World Government goes much further.

Thank You Gemma

 The

Long Awaited Recession?

Continued Unemployment Claims Increase Another 9,000, It’s Recession Looking


DYI:  Looks like Christmas sales is going to be a bust.  The question is how big of a bust!??



Sunday, January 5, 2025


Listeria Hysteria!

CDC confessed: we have no scientific evidence of listeria monocytogenes causing illness in people or animals

Friday, January 3, 2025

 

15+ Years of

Rising Interest Rates?

DYI:  As chief cook and bottle washer of this blog I’ve been investing for 50 years – I’m 70 years old and how in the hell did THAT happen – IMO the secular decline for interest rates that began 9-30-1981 with 10 year T-bonds at 15.84% ended 8-4-2020 with 10 year T-bonds at %0.52!

From now on as we move through the business cycles during growth periods will experience higher highs and during recessions with HIGHER LOWS.

If history is any sort of guide we can expect rising rates in a saw tooth manner over the next 15+ years!  The Boomer’s created a worldwide savings glut that drove rates down (along with Fed interventions) to sub atomic low levels and maintained that for over two decades. 

That was then, this is now, until the Boomer generation has passed on (hey that’s me your talking about!) PLUS the Millennial generation move into their prime savings thus over whelming the small population of Generational X savings I wouldn’t expect any possible lessening of rates until 2040!

Please remember this will occur through the business cycles of higher highs then declines to higher lows.

Till Next Time    

Wednesday, January 1, 2025

Stock remain vastly overvalued; Gold is stand out value; Lt. term bonds yield is trading at their long term average!

 


Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 1/1/25

Active Allocation Bands (excluding cash) 0% to 50%
30% - Cash -Short Term Bond Index - VBIRX
45% -Gold- Global Capital Cycles Fund - VGPMX **
 25% -Lt. Bonds- Long Term Bond Index - VBLTX
 0% -Stocks- Total Stock Market Index - VTSAX
[See Disclaimer]
** Vanguard's Global Capital Cycles Fund maintains 25%+ in precious metal equities the remainder are domestic or international companies they believe will perform well during times of world wide stress or economic declines.


**************************************************************************************
 
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  .........37.35
Bond Rate...5.31%
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

1.30+ Safe for 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: 0.55(rounded)
As of  1-1-25
Updated Monthly

PE10 as report by Multpl.com
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

**************************************************************************************

%
Stocks & Bonds
Allocation Formula
1-1-2025
Updated Monthly

% Allocation = 100 x (Current PE10 – Avg. PE10 / 4)  /  (Avg.PE10 x 2 – Avg. PE10 / 2)]
Formula's answer determines bond allocation.


Core Bond Allocation:  128% 

% Stock Allocation     0% (rounded)
% Bond Allocation  100% (rounded)

Current Asset: Vanguard Long-Term Investment Grade Bond Fund   

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.

Current Allocation:

Vanguard Long Term Investment Grade Bond Fund


Possible Allocations to Bonds vs Stocks:

Bonds %
100%+  Vanguard Long Term Investment Grade Bond Fund 

99% to 65% Wellesley Income Fund

64% to 35% 1/2 Wellesley Income Fund - 1/2 Wellington Fund

34% to 0%  Wellington Fund
  
DYI

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.

 

U.S. Stock Market

177% Above Trend Line

Massive Overvaluation

Returns From Here Will Be Subdued

 OR

Outright Losses Before Fee’s and Inflation

DYI:  Today’s U.S. stock market by whatever method for determining valuations is screaming that equities are poised for sub returns at best and worst outright losses before fee’s and inflation.  Monies invested today or stocks held today in a S&P 500 index fund or a generalized all stock growth fund that is found so prevalent in 401k’s – go to sleep like Rip Van Winkle waking 10 years in the future will have very subdued (less than 2%) or outright losses.

Dollar cost averaging is nothing more than very small monthly lump sum purchases.  Those dollars invested will reduce your overall return since valuations being at nose bleed levels.

Currently today IMO this is a terrible time to be buying stocks for the long term investors even if they are youngsters in their 20’s with many decades ahead.  Best to earn as much as possible in cash or short term bonds waiting for the next opportunity to purchase stocks at far more reasonable valuation levels.

DYI





Sunday, December 29, 2024

 U.S. Stocks

Remain Insanely

Overvalued

When will the Bear Roar? 

The market is a pendulum that forever swings between unsustainable optimism, which makes stocks too expensive, and unjustified pessimism, which makes them too cheap.

The intelligent investor is a realist who sells to optimists and buys from pessimists.
– Benjamin Graham

Professor Hussman monthly market comment
MarketCap/GVA at higher levels than at the 1929 and 2000 bubble peaks may help to understand why Berkshire Hathaway holds the largest pile of cash in its history (primarily in Treasury bills comfortably earning about 4.5%). Market conditions and valuations will change. In the meantime, both patience and discipline will matter.

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 

Thursday, December 26, 2024

 YouTube

Financial Experts?

They Never Discuss VALUATIONS!

The problem with so many of these videos is ZERO discussion regarding valuations. Such as the all important Shiller PE, dividend yield or current interest rates. All very simplistic simply stating buy the S&P 500 no matter the level of valuations and everything will just be fine. Hold long enough and you will always reach the magical 10% return!

Currently today the Shiller PE is at nose bleed levels at 38 times income generated by the corporations who make up the S&P 500 https://www.multpl.com/shiller-pe The long term average since 1872 (that's right 1872) is 17 times earnings. This valuation is now greater than 1929 but less than the year 2000. Add on a tiny dividend yield of 1.22% (avg. is 4.24%) https://www.multpl.com/s-p-500-dividend-yield

So...Let's put this all together we know on average how fast the economy, corporate profits will increase on an average basis this return will be [very] close to the anticipated return over a 10 year period. The Shiller PE is 38 the average is 17 and the current yield is 1.22%. Simple algebra don't worry lets go to money chimp and let them do the math. http://www.moneychimp.com/features/market_predictor.htm

Enter the this data for the next 10 years for stocks bought or held today - go to sleep like Rip Van Winkle - awake 2034 your estimated average annual return will be - drum roll please - NEGATIVE 1.92%!!

Please note this is before any expenses such as a 1% or 2% to run the mutual fund AND of course the ever present INFLATION. [If your 401k has fee's of 1% or greater open with Vanguard their Roth IRA and only 401k up to the match any monies left over use a low cost provider such as Vanguard in a taxable account (non retirement).

Bottom line this is a very bad time to buy stocks or a whole sale basis such as a S&P 500 index fund or a general growth fund so prevalent in 401k's.

One last item for ultra long term types. Lets change the holding period from 10 to 20 years for these dollars invested today. Drum roll please - POSITIVE 2.06% average annual return estimated. How bout 30 years...Drummer please - POSITIVE 3.42% After inflation and fee's Alpo will become your favorite meal in retirement.
What to do for the your stock to bond or your stock, bond, gold allocation. Follow my blog and copy down the math as I'm currently 70 years old (still in good health) but I won't be be around forever.

Till Next Time