Mad Money Machine

MMM-105: Tons of Pennies

April is a bad month to speculate. Proof that past stock prices don’t predict their future price. I’m asking you to delete that picture. Tons of pennies. I love Portal. Review Lazy Portfolio Smackdown.

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MMM-105: Tons of Pennies [ 29:14 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to be
sponsored by Index Funds Advisors at ifa.com.   

Topics in this week’s show include:    

• April is a bad month to speculate on stocks. I list the other bad times also.
• Jim Cramer has to be right 4 times to beat the market: Which stock & when to buy, which stock & when to sell. Multiply that by 10 years. Crazy.
• Our Tool this week is Inspectd.com which helps prove to yourself that you can’t pick a winning stock based upon its past stock price.
• IGotCramered.com is back in action now.
• Law enforcement official “asks” you do do something?
• Some guy stores tons of copper pennies in his garage.
• I loved playing Portal. Definitely recommended!

Amazon.com: Portal ASIN: B00140P9G0

Bohemian Financial Rhapsody

Is this the real price? Is this just fantasy?
Financial landslide No escape from reality

Open your eyes
And look at your buys and see.
I’m now a poor boy (poor boy)
High-yielding casualty
Because I bought it high, watched it blow
Rating high, value low
Any way the Fed goes
Doesn’t really matter to me, to me

Mama – just killed my fund
Quoted CDO’s instead
Pulled the trigger, now it’s dead
Mama – I had just begun
These CDO’s have blown it all away
Mama – oooh-hoo-ooo
I still wanna buy
I sometimes wish I’d never left Goldman at all.

(guitar solo)

~~~

I see a little silhouette of a Fed
Bernanke! Bernanke! Can you save the whole market?
Monolines and munis – very very frightening me!
Super senior, super senior
Super senior CDO – magnifico

I’m long of subprime, nobody loves me
He’s long of subprime CDO fantasy
Spare the margin call you monstrous PB!
Easy come easy go, will you let me go?
Peloton! No – we will not let you go – let him go
Peloton! We will not let you go
(let him go !)
Peloton! We will not let you go – let me go
Will not let you go
let me go (never) Never let you go – let me go Never let me go – ooo
No, no, no, no, No, NO, NO ! –
Oh mama mia, mama mia, mama mia let me go
S&P had the devil put aside
for me
For me, for me, for me

~~~

So you think you can fund me and spit in my eye?
And then margin call me and leave me to die Oh PB – can’t do this to me
Just gotta get out – just gotta get right outta here

Ooh yeah, ooh yeah
No price really matters
No liquidity
Nothing really matters – no price really matters to me
Any way the Fed goes…..

• Matrix Rhapsody & Bohemian Matrix
• Economic Stimulus? Can we please get the gobmint out of the business of “managing” the economy?
• Can we please get back to using REAL money?
• I review the results of the 2008 Lazy Portfolio Smackdown sponsored by Index Funds Advisors. The bears are leading the charge, so far…

Music from music.podshow.com (and from YouTube.com):
Runaway Train – Under Feather
Money – Theory in Motion
Bohemian Financial Rhapsody – Geoff Smith

Email me: feedback at Mad Money Machine dot com, or comment, or Call me on the Mad Money Machine voicemail line at 206-734-4763

March Lazy Portfolio Smackdown Results Updated

I have updated the Lazy Portfolio Smackdown page to show the March results for both the game entries and the professional lazy portfolios. I’ve moved the composition breakouts for the Professional Lazy Portfolios and the Game Entries to two new pages to help make the results page more readable.

A reader at Diehards.org/forum asked me to add Harry Brown’s Permanent Portfolio to the professional entries. His portfolio is made up of 25% each of the Vanguard Total US Stock Market (VTI), iShares Lehman 20 yr Treasuries (TLT), Cash or short-term Treasuries (I used ticker symbol VFISX), and Gold (GLD). The portfolio is up 1.58% YTD.

You can see graphs of the all of the portfolio results for several different time periods by going to Foliodex.com. One group is for the Lazy Portfolio Smackdown Game Entries and another group holds the Professional Lazy Portfolios, although it is polluted with more portfolios than I am currently tracking.

Total return leaders YTD for the Professionals is Harry Browne (up 1.6%) and Scott Burns Five Fold (down 0.8%).

Total return leaders for the game entries are mudfud, with his 2X China Bear fund, up 25.5% and Tex Williams with his UltraShort funds up 14.6%.

Note that the leading YTD return portfolios are not the kind of buy-and-hold portfolios that are most frequently recommended by the sages at the Bogleheads Forum.

It seems to me that if someone is in the accumulation phase of their long term investing career that these times where stock prices are significantly off of their highs may make it more appealing to continue to add to their portfolios.

MMM-104: Finding the Lost Decade

What lost decade? A novel of financial collapse. Fed comic books. Another guru says buy gold. Say goodbye to pennies, nickels, and quarters.

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MMM-104: Finding the Lost Decade [ 31:07 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to be
sponsored by Index Funds Advisors at ifa.com.   

Topics in this week’s show include:

According to the Benchmark Your Portfolio tool at IFA.com, while it may have been a “Lost Decade” for the US Large Cap stocks, turns out it was a “Boss Decade” for a broadly diversified portfolio of index funds such as the Index Portfolio 100.

Results are adjusted for inflation.

• You got Rickrolled!
• What lost decade? Indexfolio 100 is up 130%
• I read “Full Faith & Credit” a novel about financial collapse.
• Reading now:
• The Creature from Jekyll Island by G. Edward Griffin
• The Dick Davis Dividend
• The Disciplined Investor by Andrew Horowitz
• From Wall St. to the Great Wall by Burton Malkiel
• Gold: The Once and Future Money by Lewis
• Check out the Index Funds Advisors quote of the week.
• Find me at Twitter: MadMoneyMachine
• Our Tool isn’t IGotCramered.com because it apparently got Cramered.
• Our Tool instead is a series of comic books about the Federal Reserve.
• The musical interpretation of Step 3: Stock Pickers
• I review the Fox Business panel’s stock picks for 2008
• We went to the Dollar store and got 22 things. Will it go the way of Motel 6?
• Penny Dreadful says they talked about rounding to a nickel. Bogus! Round to the dime by simply dropping a decimal place. Then eliminate production of pennies and nickels (and quarters).
• Lost faith in Capitalism yet? Read Ten Days that Changed Capitalism.
• Our Guru says the price of gold is a reciprocal of confidence in Ben Bernanke and folks like him.

Music from music.podshow.com (and from YouTube.com):
Never Gonna Give You Up – Rick Astley
Runaway Train – Under Feather
Money – Theory in Motion

Email me: feedback at Mad Money Machine dot com, or comment, or Call me on the Mad Money Machine voicemail line at 206-734-4763

See? They Say the PPT *WAS* at Work Last Week

Here’s a post from Naked Capitalism just now proving that yes, in fact, the Plunge Protection Team did act last week:

 Are the Feds Manipulating the Stock Market?

from naked capitalism by Yves Smith

This message came from an investor who has provided me with some very useful research from time to time:

"Mike Belkin, who writes a weekly technically-based look at lots of markets—the only technical service to which I subscribe—notes today that last week equity fund flows netted to a $22.9 billion inflow, broken down as $3.3 billion of mutual fund outflow, and $26.2 billion of ETF inflow. His inference is that the Fed/Treasury is buying ETFs. Just so you know, Mike is an ultimate insider, although he views things with a very jaundiced eye, and views them from Seattle. He ran a Salomon prop desk for years, and is the opposite of a conspiracy theorist or a perma-anything—he’s very good at noting crosscurrents and catching shorter term countertrend moves within broad longer term trends."

The reason I consider this credible is that I was told back in 2000 by my derivative trading buddies that the Fed, known as the Turk, would place orders in S&P futures. Note that the Fed has no responsibility for the health of the stock market despite what its actions would lead you to believe.

I find this all rather hard to believe. Surely neither the Fed nor the government would intervene in the workings of the free market. What would they do if their bet lost? Who would pay?

Fox’s Cramer Bash Ad

Hahaha, Fox Business channel took out an ad in the NYT and WSJ that bashed Cramer on his Bear Stearns call. Pretty funny. Hat tip CrossingWallStreet.com

MMM-103: Plunge Protection Team

Did the Plunge Protection Team save the markets this week? Our Guru says active investors spend $100 Billion per year trying to beat the market. Our Tool measures the implosion. Cramer’s recommendation on BS.

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But, if you just cannot deal with that then go ahead and
Play the new show right now

MMM-103: Plunge Protection Team [ 29:00 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to be
sponsored by Index Funds Advisors at ifa.com.   

Topics in this week’s show include:  

• How are you doing? What a wild market. I think this one has more uncertainty in it than the dot com crash.
• Perhaps not paying attention to the market is the best idea? These are indeed interesting times.
• I detail my active trading failures.
• EconTalk was great this week. Catch the interview with Tyler Cowen about the Fed and the gold standard. Good stuff. Russ needs to read up about why gold makes good money though.
• Christopher says to say hey to Rikard in Japan.
• If the market prices in all that is known about the markets, why does it keep going down?
• I don’t think Jim Cramer was saying stay in Bear Stearns stock, I think he meant to keep your account there if you had one. Nonetheless, people are up in arms.
• And don’t forget to visit the Cramer Crap auction.
• Ron Paul asks John McCain about the Plunge Protection Team. John sounds like Miss Teen SC. Read the article about the PPT in the WaPo. Here’s someone saying the PPT bought stocks last Tuesday. Here’s an article refuting the PPT as an urban myth.
• Our Guru says active investors are spending a whopping $100 Billion per year trying to beat the stock market. Mark Hulbert takes up the story in the NYTimes.
• I read the Kindergardner’s Guide to the Credit Crisis
• Our Tool helps you keep track as the popcorn kernels pop.
• Check out the Index Funds Advisors quote of the week.
• Find me at Twitter: MadMoneyMachine

Music from music.podshow.com:
ALTA PLAZA – XRAY DOGS
A Rush of Air DiscoBalls Mix – monotommy

Email me: feedback at Mad Money Machine dot com, or comment, or Call me on the Mad Money Machine voicemail line at 206-734-4763

Mad Money Liquidation Auction

Got an email from Jim (not THAT Jim) saying they are auctioning off some of the props used on the Mad Money show. Since I’m a statesman like Cramer, I won’t call it "Cramer Crap." You can see video clips of the props being used on the show and then put in a bid on the auction to buy them. Got some golden bobbleheads, got some bulls, the hazmat suit, and a Rembrandt.

Interesting how the auction works: If a bid is submitted within the last 5 minutes of the auction, the auction is extended another 5 minutes. That’s what eBay should do to shut down the snipers!

MMM-102: Whip Inflation Now

Inflation… or DEflation? Shutting down the FED. Where to invest now. Guru says go for the gold. Tool helps calculate worth of money. Gold inches toward sextillion.

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But, if you just cannot deal with that then go ahead and
Play the new show right now

MMM-102: Whip Inflation Now [ 29:21 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to be
sponsored by Index Funds Advisors at ifa.com.   

Topics in this week’s show include:  

• Is it time to Whip Inflation Now? I actually remember having one of these buttons. I didn’t know at the time, nay, I didn’t learn until about 30 years later, that inflation was caused by the government creating more money and not buy greedy businesses, as was told to us all along.
• Are we headed for inflation? OR Deflation? OR BOTH AT THE SAME TIME?
• According to the Resource Investor podcast, gold does good during both inflation and deflation.
• Jim Rogers says if he were Fed chairman, he would shut it down and then resign. I wish I would have listened to him and bought commodities.
• So, where do we invest now?
• One thing is for certain, picking individual stocks won’t beat the market. Instead, buy the WHOLE market using low-cost index funds.
• Our Guru said that a gold standard is the only way to protect us against the welfare statists.
• Congress is taking up HR 5512 to try to modernize our coins. They instead should just eliminate them.
• Our Tool helps you calculate how much your cash is worth today.
• Stock pickers don’t use the proper benchmark. They compare themselves to cash instead of to a portfolio of index funds. And even then, they don’t calculate the risks they are taking.
• Relax and listen to some music.
• Gold goes over $1000.
• Warren Buffet says our country is experiencing widespread pain.
• He also admits a mistake in his investments.
• But, he says America will still prosper.
• How can someone who becomes a state governor be such a fool? Isn’t there any good politician?
• Don’t join the fool’s brigade. Take the Risk Capacity Survey and fight for your financial freedom.
• Find me at Twitter: MadMoneyMachine

Music from music.podshow.com:
ALTA PLAZA – XRAY DOGS
Good as Gold – Admiral Twin
The Fools Brigade – Admiral Twin

Email me: feedback at Mad Money Machine dot com, or comment, or Call me on the Mad Money Machine voicemail line at 206-734-4763

Jim Rogers: Abolish the Fed

Here now for a self-fulfilling prediction: I said you’d be seeing more of Jim Rogers in 2008 as commodities and China take the headlines. Here now is Jim on CNBC the other day in an interesting (sometimes funny!) interview in which he says the Fed is doing a poor job, throwing gas on a raging fire. The other central banks around the world are doing much better. At least they *acknowledge* there is inflation.

If you want to take his advice and buy agriculture and currencies, you may want to do some homework on DBA, FXY, FXF, and FXA. Possibly DBC as well. Oh, and SKF!

Prediction 5 (and its update) Realized

Gold reached $1000/oz today, as I predicted.

Write Your Congressman About Our Coins

It’s really easy to write to your congressman these days. Simply go to house.gov, enter your zip code, and click on the send email link (at least it was for MY congressman). So, here is what I wrote to mine this morning. Please join me in calling for the elimination of the penny, nickel, and quarter.

Congressman Wolf,

HR 5512 is considering coin modernization. Instead of merely replacing zinc pennies with steel pennies, I recommend eliminating the production of pennies, nickels, and quarters. Then continue production of dimes and half dollar coins.

Eventually, retailers will drop a decimal place from prices, such as from $14.95 to $14.9, and the penny, nickel, and quarter coins will be undesirable.

By discontinuing production of pennies, nickels, and quarters, we will save hundreds of millions of dollars each and every year.

Thank you,
Paul Douglas Boyer
MadMoneyMachine.com