Mad Money Machine

MMM-144 [ 34:28 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to advertise Index Funds Advisors at ifa.com

Topics in this week’s show include:

• Armageddon
• 2008 was financial crisis. 2009 will be economic crisis.
• Using GIMP for images now. Listen to EconTalk discuss open source software.
• My Z.buds were crap. Bought Radius earbuds and they are OK. Use coupon code "buymeaniphone" to save $5. Would have liked the tangle-free cords of the Z.buds, but the wires inside broke. Al  so, their L-R balance seemed off.
• Campaign for Liberty : National Freedom Day
• Money & Inflation
• LEARNING EARNING: IFA Investment Principles # 5. Passively invest, diversify to the maximum, maintain a small and value tilt and keep turnover, costs and taxes to a minimum.
• Arguments against indexing? Specifically , buying the DOW.
• CEF vs. GTU vs GLD vs GDX
• GURU: Marc Faber of GloomBoomDoom.com. "We are at the beginning of the worst economic contraction since the Great Depression ." Recovery in 2, 5 or even 10 years time. The market may go even lower from here. 2009 is going to be a catastrophe, economically speaking. Monetary policy led to the excesses and leverage and debt growth. Rate of inflation will accelerate. Interest rates will increase. Markets will drift lower because they are not compelling on P/E, or dividends, or book values. Commodity prices now, after the huge setback, are relatively low. Also Asian markets are low and stocks are probably OK but could go down more. Investing in gold, gold miners in particular, oil, oil companies. Says US Government is a bigger Ponzi scheme than Madoff. S&P may go up, but we have to look at the underlying currency relatively speaking.
• Perils of Ultrashorts : FXI (China index ETF) was down 46.7% in 2008 but FXP, the UltraShort of FXI, was down 57.2%. "Furthermore, the purveyors simply highlight that these seek to replicate (plus or minus 1 time or 2 times) the daily returns, and that they "do not seek to achieve their stated investment objective over a period of time greater than one day" … despite presumably knowing full well people do not view mutual funds as one-day holds. Indeed, investors are sent a prospectus when they execute a trade, meaning that there is at least three days’ price risk before they even get the prospectus, and that alone is enough to cause damage."
• Mint.com feedback
• How to calculate your portfolio’s Standard Deviation or Sharpe Ratio
• Subscribe in iTunes to "Index Funds Advisors " podcast to hear me do the Quote of the Week!
  
• Got Feedback: Try any one of these methods:
  • email: feedback AT MadMoneyMachine DOT com
  • voicemail: 571-366-7121
  • Comment here on this blog
  • Comment for all to see at drop.io/MadMoneyMachine
  • Twitter me at Twitter.com/MadMoneyMachine
  • Skype me at MadMoneyMachine
  • Take the MMM Survey

Music from music.podshow.com:
Armageddon Boogie – The Defibulators
Armageddon – Andres Osorio
Armageddon – Alkaline Trio
Visions of Armageddon – Adastra
Runaway Train – Under Feather