I know your eagerly awaiting an entry point for the market. My advice is to be patient, you'll get one. We came close with the very short lived 3.6% swoon in the last two weeks but waiting a bit will give you a great outcome.

Here's a little trivia to ponder about the length of historic, long lived BULL markets,
---December 1987 to March 2000; 4494 days
---June 1949 to August 1956; 2607 days
---October 1974 to November 1980; 2,248 days
---CURRENT BULL MARKET, 2, 210 days as of 3-16-2015
---July 2002 to October 2007; 1,904 days

We are ripe for a pullback and major equity purchases are problematic in MHO. That being said I do nibble a bit in my personal account on what I think might be special situations; I recently bought a round lot of VISA (V) because its balance sheet is sterling, It signed a contract with Cosco to replace Cosco's present card (American-Express) and it has announced a 4 for split effective on March 18th, 2015. The stock pays close to a 2% dividend and is 90% held by institutions I.E. mutual funds, ETFs and such.

I know that splits do not add value but the fact is that most stock splits increase the stocks NAV by 20% in the year after the split because when you lower the per share price from $200 plus to say $50 you bring in a bunch of retail investors who haven't the cash to buy at the higher price. I know it sounds hooky but it works, I've ridden this train before.


Take it slow and wait for the right opportunity.
Murray

Statistical Investment facts to ponder

There are many divergent facts that swirl around the investment world. Many of them are useful to spot trends while some are just smoke masking the reality. It is always useful to look at these stats / facts before forming your own decision. As Joe-Friday said, “just-the-facts,-only –the facts.”

----Only 54 percent of American adults own stock market investments in 2014 versus 67 percent in 2000 per a “Gallup” poll.

----401K participation of eligible adults is 80% but this stat masks the fact that many small company and minimum wage service employees simply aren’t eligible.

----The Society of Actuaries currently estimates that the average 65 year old man will live to 86.6 years, up from 84.6 years. The average woman will live to 88.8 years old, up from 86.4 years. Are you ready for more?

----The average US investor realized a 3.69% average, yearly gain for the last 30 years.

“We have gone too long without a 10 percent market correction.”

We’ve all heard these kinds of statements to justify doom & Gloom predictions for 2015. I think it’s all BS. This kind of background noise is always with us and is rarely correct. My fearless prediction for 2015 is that we will enjoy 8 percent return in the overall market for the year based on the S&P-500.

We actually had a 9.83% sell-off at the end of 2014. Note that there is indeed a difference between a pullback / correction and a crash. The generally-accepted ranges are: 5% = dip, 5-10% = pullback, 10-20% = correction and +0% = crash. There's more to it, but the guidelines are pretty universal. So, is it really reasonable to argue that a 9.83% sell-off (0.17% shy of 10%) doesn't qualify as a 10% correction? Yes, I'm aware that the 9.83% bottom was only intraday, but my point remains the same, in that perhaps the purpose of a correction was still served. An attorney might refer to this as a question of "the spirit of the law, versus the letter of the law."

Yes, our Bull-Market is middle aged but historically we’ve experienced many market runs that went beyond a single decade. The 1982-2000 Secular Bull Market (18 years)---The 1966-1982 Secular Bear Market (16 years) and the 1949-1966 Secular Bull Market (17 years). Our Price / Earnings ratio stands at just a wee-bit over the historic mean and the last batch of earnings reports had 71% of the company’s reporting meeting or beating their forecasts.

Advertising Words, Listen with great care.

As always, an investor must be ever alert when an investment is being presented to him. We’re all adults so we are aware of “weasel” words that are less than definitive like may, might, should, could etc. That’s all good but lately advertisers have become ever more creative.
Have you heard the ad selling silver that’s playing constantly on network TV? It says “buying silver is the smart move since right now you can buy silver for less than its all-in-cost of production.”

What they have found is a clever way to say is that Silver is cheap now because it has been a remarkably lousy investment. Let’s review why you can presently buy silver at less than production cost.

“SLV” is an ETF that mirrors the spot price of silver. It’s annualized return for 5-years is minus (1.9%) and it is down (19.5%) for the last year. Silver peaked at $48 an ounce in the first quarter of 2011 and its chart shows a steady downtrend to today’s price of $16 an ounce. “Selling below the price of production”, indeed. I suppose that buying Radio-shack today at $.09 a share as they enter bankruptcy could easily be reworded as an opportunity to buy-low to allow selling high!

Whether “Retail” Investments ?

The Retail sector is in a state of flux that will last many years. We’ve recently experienced big investor problems with retail companies as diverse as Circuit City, Sears, Barnes & Noble, J.C. Penney and Radio shack. All retail is changing; Brick and Mortar stores are struggling to compete with internet sales.

Simply put, there are way too many stores and in general the large Malls are rapidly losing ground. Even the Internet sales giant Amazon can see a problem building with Alibaba. The little investor wanting to avoid excess risk in this sector might consider Home-Depot or Lowes but they hover close to their historic high prices. I think that our retail community of companies shrinks by half in the next decade. Of course some retail will prosper but picking the gold out of the dung will not be easy. If you don’t think that retail is changing ask the nearest 20 year old what percentage of their purchases are through the internet.

By the way, As I write this on August 5th 2015 Radio Shack went into bankruptcy. The CNBC coverage of this expected event stated that Radio Shack had 4063 stores and it was questionable if they would attempt to exit bankruptcy; wow, over 4K stores and they may just fold up as Circuit City did. The CNBC coverage then went on to say that Amazon was interested in buying the stores from Radio Shack.

You don’t have to be a Business Major to see where this might be going. Just picture an Amazon showroom for TVs or Refrigerators. The customer would pick out an appliance and pay Amazon. The Fridge would simply ship from the Whirlpool factory and Independent Contractors working for the Amazon store would install it. The item would be in Amazon’s inventory for at most a couple of days to delivery. Think about it, the largest expense of an Appliance store is inventory and Amazon has the money in hand before the goods hit their books as inventory. That would be pricing power.
Ok, so what are the general types of investments with less risk? I like companies that are able to plot their profits because they are part & parcel of modern life. The credit card titans like Visa, Mastercard and American express come to mind. They have pricing power and have kinda a troika of profit. Insurance companies and some banks also qualify due to our very cheap money supply.

I guess that established “service” companies that occupy the upper tier of their industry qualify. If your company has no inventory and essentially takes a commission on a sale then by definition it is a transfer agent incurring cost only when booking a sale. Disclaimer, I currently hold positions in Aflac, P&G, Altria, Merck, AT&T, Bank-America, Visa, Lowes, Pfizer, Brinker International, Wells-Fargo and Walgreens and am well into the money with them all.

MARKET TURMOIL YTD February 1st

Week end January 30, 2015
The word Turmoil according to the Dictionary means, “a state of great disturbance, confusion, or uncertainty and its synonyms are confusion an turbulence; this pretty much sums up the US Stock Market results YTD.

We ended the week with major Equity indexes off over 3% YTD. The DOW is off 3.69% and the better representative index S&P-500 was down 3.06% since year end 2014.

A few facts need to be reiterated.
---The Dow Jones highest closing price thus far was recorded on 12-26-2014 at $18,054
---The Dow closed on 1-30-15 at $17,165 down $889 from the December all time high or 4.92%.

We are now in the reality of the law of high numbers; when the market is up or down a couple of hundred bucks a day our mindset is “Gee, what a huge move” and you’re scared or euphoric because in your memory these moves were unusual. Get over it, at Dow %18,000 a 10 percent correction is a down move of $180,000. That 10 percent down move from the high would take us to $16,200; that’s a very normal move that will scare a lot of people.

My view is that the market goes down another 3% or so before heading back to its highs. I’m buying NOBL, SPY, DGRW and if your into only Mutual Funds Fidelities FUSEX tracks the S&P-500.

Google presents the Business concept of “FREE”

We all know Google; it’s a part of our lives and one of those strange words that is both a noun and a verb. What isn’t as often noted is how they have pioneered an entirely new Business concept that could be called “Free” stuff for all.

Google started in 1998 and 16 years later it enjoys revenues of $17Billion mostly be giving their products to the ultimate consumers for free; a business plan that has put fear into the Big-business community.

It is very easy to understand how Amazon and Apple make money. They sell books, computers, software, apps, electronic gadgets, consumer goods, electronic books, music, video and so on to their customer base.

In contrast, Google spends vast sums of money developing products then gives them away for free. Some examples are,
1. Their Search engine, the verb / noun “Google”
2. Google email (Gmail) Do you remember when AOL wasn’t free?
3. Operating system Software, Chromecast
4. Operating system for PCs that stores in the “Cloud” , ChromeOS
5. Maps (Google Maps) on cell-phones and computers.
6. Cloud-based apps (Google Docs)
7. Video hosting and sharing (YouTube)
8. Matrix, The Google way to find cheap air flights
9. Photo sharing, editing and organization (Picasso)
10. RSS reader (Google Reader)
11. Photo storage in the “Cloud” with Picasso
12. Free Blogging sites & tools (Blogger)
13. Language translation (Google Translate)
14. 3D modeling software (SketchUp)
15. Operating systems (Android).

In addition to these “Free” to the consumer programs and apps they are pouring research and development cash into driverless automobiles, lifespan expansion and their own wireless phone company (think Verizon).

They are a serial disruptor of established Business plans. They give away a Computer operating system that challenges Microsoft and things like Google maps on your cell phone have upended the various GPS unit manufacturers. It is very difficult to beat a competitor who is happy giving away his product. AT&T and Verizon must now contemplate viable competition to the near monopoly they have enjoyed for years.

Google, in contrast to the way businesses have been structured, believes that all information should be freely available and abundant. They make great effort to ensure that information remains free.

Microsoft has long been the Darth-Vader of tech innovation but even they seem to sense the change. Their business plan is essentially an annuity-like charge for everything, but in the last few years they have introduced “Bing” a search engine that mirrors Google and in January 2015 they announced that their new Windows-10 would be free to past customers. I think they see Google in their rear-view mirror and we all know that “objects in mirror are closer than they appear.”

So, how does Goggle make money? To understand the paradox of essentially gifting your products, you have to understand what exactly Google is selling. Google is so dependent on free and abundant information that if info becomes scarce, Google’s business model will collapse. That means that Google, unlike Microsoft, Amazon and Apple, et-al is not in the business of selling information. So, what are they selling?

To understand exactly what Google is selling, there is a crucial point to understand; in Google’s ideal universe, information is free and abundant, but consumer attention is scarce. This is a positive feedback loop that attracts the attention of the consumer. This info loop forces businesses to give more and more information away, which in turn causes information to be more abundant (collectively), which in turn makes consumer attention even more scarce (for each individual businesses), which forces businesses to give yet even more information away. And by the way, the fact that you are reading this for free is testament to the fact that I’m trying to attract your attention.

And here is the crux of Google‘s business model—it sells access to consumers’ attention (access to you BTW). By using Google’s free products, your attention is totally captured by Google. Then it sells your attention to businesses in the form of advertisements (e.g. paid advertisement in search engine results page, blogs, your emails if you’re using Gmail etc). It’s kinda a very sophisticated kind of “Shopper-Tabloid”

That is why Google is so busy giving away wholly integrated sites of interesting products and services. The whole purpose is to capture your attention which they then sell. To put it simply, Google, at its core, is an advertising company that has discovered that creating interesting products to give-away captures the eyeballs that advertiser’s prize.

That’s why Google will never charge for the free stuff that it is giving away. If they do charge you can bet they will lose a lot of the attention of their consumers. As a result, they will then have less attention to sell.

This is beyond wonderful for the consumer but the source of much angst in boardrooms around the globe. The business world greatly values predictability and Goggle’s business plan is the anti-profit predictor.

As you use the free to the consumer services of Twitter, Facebook, Snapchat or any of the hundreds of free apps for your phone, thank Google as the pioneer of “Free.”

Disruption in your business or investment is not just possible but now it's probable; If you think I'm kidding just Google it.

let’s be careful out there!