10/19/14

Observations

This is an idea that has been flashing in my brain for some time. Probably since I have reached maturity, for lack of a better word.

The most obvious thing is people fight, preach, talk, elect new leaders, but things, really, do not change much. Markets take us where we need to be.

I find it particularly interesting how we have the same objectives such as helping the needy. This is a marvelous priority. It is like the Mezzoggiorno (the South) of Italy. Italy and now the EU have committed huge amounts of money for decades to that area, but little has changed the Spanish influence of 300 years ago.

What really changes is the size of the bureaucracy which has to administer the efforts. Bureaucrats travel in first class to reach the needy. The purpose of bureaucracy is to transfer power from us to them. Marx had a good idea. We are all equal. Great! What he ignored was the nomenklatura gained too much power. And the markets won. The CCCP collapsed. Extreme power is bound to fail. The markets always win.

No matter what we plan or how good our intentions are, if the idea is a bad one, the markets have a wonderful way of teaching us a lesson. Always.

Now our government makes a big deal about energy (industrial dirigisme) and gives lavish sums of money to “farmers”. The bureaucracy strives in transferring money from us to them. The more ideas they get, the more powerful they become. At our expense. The markets become distorted, planning becomes more difficult, and the economy slows down. The markets win.

The Treasury is getting record revenues (more than 19% of GDP). Yet taxes have to be changed. Why? To help the needy. The government already has the money and cannot get more of it because the market system cannot produce tax receipts of more than 19% of GDP.

The markets will solve healthcare. A socialized system of poor quality and one for those with means. There have been and will always be two systems. The only way to beat the markets is to raise the standards of the population as the Swiss have done. There is no easy way. There is no free lunch. The markets always win.

(This Observations appeared in the 7-09-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

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A long-term S&P 500 investment model - currente position and historical performance

From January 3, 2000 to October 17, 2014  this model produced a total return of 257.3% (S&P 500: 79.8%).

The maximum loss of the portfolio was 17.3% (S&P 500: -55.2%).

The model is still on a buy signal

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

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5/25/14

Observations

We spent the evening in Oxford, MD. We anchored in a nice creek. A delightful place I have been going to for the past 25 years. We had dinner at the Robert Morris Inn, a business established in 1710. We went back to the boat and enjoyed a late evening drink looking at the green and red lights flashing to indicate the entrance of the channel.

We got up early the following morning because our plan was to sail to St. Michael – a long trip. The winds were from North-East. After motoring 30 minutes we decided to sail. That was the reason we were there.

As we reached the Bay we decided to keep sailing although the wind was coming from the North, against us. It was a pleasant sail. The wind was close to 10-12 kts, sunny, and the temperature was a cool 70 degrees.

Eventually we realized we could not go to St. Michael. We were sailing too slowly. It was time to find another destination – Annapolis.

After lunch we noticed some clouds north of the Bay Bridge. Not to worry said Richard. They are too far away. Ron agreed. I am a strategist. This is my mindset. I started looking for alternative destinations – just in case. We decided it was wise to think about going into a creek in the West River, one hour away. And we had to motor going south.

The wind was behind us and becoming stronger. The clouds were not far away and were biting our stern. Waves were becoming increasingly whiter, suggesting winds were picking up and were stronger than 20 kts. Our instruments confirmed it.

Eventually winds became 40-50 kts strong. The boat, a Sabre 38’, was handling it well. But to reach our destination (a protected cove) we had to go through a narrow channel in very shallow water.

Now the winds were gusting up to 73kts. I decided to go in. The winds were to port. The boat was healing with the starboard rail almost in the water. But I made it. Safely. The boat handled well. We anchored in 50 kt winds and waited for the storm to blow away drinking a Scotch. The rain stopped. All is well what ends well.

(This Observations appeared in the 6-25-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

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4/30/14

Smile

Smile though your heart is aching
Smile even though its breaking
When there are clouds in the sky, youll get by
If you smile through your fear and sorrow
Smile and maybe tomorrow
Youll see the sun come shining through for you

Light up your face with gladness
Hide every trace of sadness
Although a tear may be ever so near
Thats the time you must keep on trying
Smile, whats the use of crying?
Youll find that life is still worthwhile
If you just smile.
Thats the time you must keep on trying
Smile, whats the use of crying?
Youll find that life is still worthwhile
If you just smile.

4/26/14

Selling in May and go away: the historical record

Source: ZeroHedge (click on the chart to enlarge it)

Annual seasonality and second year presidential cycle

Source: ZeroHedge (Click to enlarge)

Observations

Jerry asked a good question at our latest “coffee group” session. We were looking at a chart showing the price pattern of some commodity-sensitive stocks and financial stocks. The message was obvious: commodity sensitive stocks have been outperforming the financial stocks. Questions: “What should we do now?” And SNS added: ”This is history”.

Charts, as in sailing, are an aid to navigation, part of the process of planning your trip, managing your money. Managing money is a process involving continuous decisions which have to be taken at the frequency suited to each investor. Every week, every month…you decide.

The first step is to determine the investment scenario and evaluate which asset classes are most likely to benefit. The outcome of this step is usually a multiple set of scenarios. Start with the one with the best odds. The lower probability ones will also be used.

The second step is selecting stocks for each scenario. If the main scenario reflects a strong economy, then a high percentage of your portfolio should be in commodity-sensitive companies. If one of the scenarios is a slower economy, then some money should be allocated to, for instance, financial stocks.

The third step is allocating money to each stock reflecting the odds of success assigned to each sector. A chart showing the graphs comparing the price of all the stocks is an invaluable aid. Capital should be allocated according to the relative strength and financial appeal of each stock as it compares to the S&P 500.

The fourth step, probably the most important, is to evaluate the performance of your portfolio by looking at the change in the balance of your portfolio and at the chart showing the relative performance of your stocks. You have to decide how often you want to do it.

Are you making money? Is most of your money in the strongest sectors and the strongest stocks? What are the scenarios you are considering? You need to change your portfolio according to this new evaluation.

The answer to Jerry and SNS is: The graphs of your stocks are part of the process. They give an idea of where you have been and where you are going.

(This Observations appeared in the 6-11-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

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Currencies, Inflation, and Foreign Investments

Inflation is the cancer of the economy. Rising inflation is a sign that the economy is operating less efficiently, it means that business is allowed to raise prices rather than improve productivity to improve its profitability. Rising inflation has a negative impact on productivity as business finds it easier to raise prices rather than investing to improve productivity in order to increase margins. Rising inflation means that people who rely on fixed income have their source of livelihood depleted by external forces and they are forced to live with smaller resources. ,p>Rising inflation creates discontent in the economy and in the population as people see their money worth less and less. The quality of goods purchased declines as business cuts cost to improve profitability and raises prices. The whole economic process becomes distorted.

The financial markets, as inflation rises, reflects this uncertain state of affairs and they act very poorly as they did in the 1970s. Rising inflation is really a cancer of the economy and that's why the Federal Reserve and the central banks around the world are committed, at least on paper, to keep inflation under control and achieve price stability. Price stability really means that with prices growing slowly, business is forced to improve margins by increasing productivity and this increased productivity creates a stable business cycle, sound growth and high real income as wages rise above the inflation rate.

Rising inflation also is usually associated with an overwhelming role of the government in the workings of the economic process. A definitive example is what happened in the 1970s in the United States. Inflation soared from 3% to 15% as the federal government aggressively expanded social programs and at the same time was fighting the war in Vietnam without raising taxes. Spending was funded by keeping very low interest rates relative to inflation, causing inflation to soar, thus indirectly raising tax revenues as income was artificially inflated by inflation. This influence forces the economy to operate at inefficient levels. It is not a coincidence that the Soviet Union, where the bureaucratic apparatus was 100% of the economy, collapsed because of the inefficient Soviet economic system. Other countries in Europe have shown that the more socialistic governments have been associated with an economy growing more slowly. This is the reason why Europe grew slowly in the 1990s. Japan itself was in a long recession in the 1990s due to the close control of government and cartels on the way their economy operates. The United States has proved that by maintaining some freedom in the marketplace, one can achieve solid economic growth and a low unemployment rate. As we have seen in chapter five, rising inflation is eventually associated with high unemployment rates as business cuts employment and recessions are usually the rule, not the exception.

Of course as inflation rises, interest rates also rise. Lenders ask for a higher return for their money being lent to keep into account the inflation risk. When inflation rises, everything seems to be going wrong. On the other hand, the 1960s and the period following the 1980s showed quite clearly low inflation is accompanied by stable economic growth. The currency of a country reflects this state of affairs and is a delicate mechanism measuring the imbalances of one country relative to the others. A strong dollar reflects the fact that the US economy is performing well, with stability and low inflation. A weak currency reflects a country that has economic problems, inflation problems, and productivity problems - a country that lacks stability and conviction to solve the issues.

Currencies, over the long term, reflect the inflation differential between two countries. It measures the relative efficiencies between two countries. A country with low inflation is more efficient and more stable than a country with higher inflation. Therefore, the country with a weak currency reflects a country that is relatively worse off than the country with lower inflation. This is an important fact to recognize because when investing in foreign stock markets or in foreign assets, one has to assess the impact that the currency has on the performance of the investment.

For instance, if one invests, let's say in Japan, and the Japanese market rises 20 percent, it provides the investor with a 20 percent capital gain. However, if the Japanese Yen declines 20 percent, the total gain for the US investor is zero. Although the investor has a 20 percent profit from stocks, it takes 10 percent more Yen to buy dollars to repatriate his investment, therefore, net net the gain is zero.

Foreign investments should be made in countries with a strong currency to avoid the currency risk because a currency loss takes away from the gain of the investment in that foreign country. Since the long term trend of a currency is determined by the trends of inflation in that country, before investing, one should do a cursory check of the level of real interest rates for that country. It will provide the investor with a very simple way to recognize what the currency risk involved is in that investment. Inflation in a country depends mostly on the level of real interest rates.

For instance, in 2000 South Korea had short-term interest rates of close to six percent and inflation of one percent. Clearly, South Korea monetary authorities were following a sound monetary policy. Short-term interest rates were low, close to the norm of 5-6%, real interest rates were high with short-term rates higher than inflation, and inflation was low by many standards. Clearly, all this information suggests that South Korea is a country that has a firm or strong currency.

However, let's say the United States has short-term rates of five percent and inflation of two percent, and for example Venezuela and Mexico have short-term interest rates close to 35 percent and inflation of 30 percent. In this example, the currencies of Venezuela and Mexico offer a currency risk. The first reason is because high short-term interest rates well above the five percent norm tell the investor that the country has serious structural problems. The second reason is that real interest rates are extremely low relative to the US. In this example, interest rates are more than two times inflation in the U.S. However, in Venezuela and Mexico real interest rates are only 1.2 times the inflation rate. This means that monetary policy in Venezuela and Mexico is conducive to a weak currency relative to the U.S. dollar since monetary policy in these two countries is likely to produce higher inflation than in the US. Therefore, these two countries offer a very high currency risk and should be avoided. By the way, these numbers are available on the Internet or any weekly edition of the Financial Times or The Economist.

(From Chapter 7 of my book Profiting in Bull or Bear Markets. Published also in Mandarin and on sale in China. The book is available at Amazon.com).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

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4/16/14

Observations

Richard was driving and talking to Jim. I was sitting in the back with all my reading material. Finally I had the time to catch up. Three articles caught my attention.

The first one was unfavorable to the ethanol craze going on right now in the US. This is an industry buoyed by 51 cents per gallon government subsidies to a few major companies such as ADM.

This market interference by the government is creating distortions as farmers and speculators take advantage of the bonanza. The ensuing misallocation of crops will increase the price of commodities not produced because of the emphasis on corn and soybeans. There will be a green effect because corn and soybean require large amounts of fertilizer, pesticides, and fuel.

The second article dealt with the new shape of the global balance of power. As other countries grow faster, their relative economic weight increases.

Asia (mainly China and India) is creating its own organizations and excluding the US. The US, on the other hand, is trying to bring all the countries in the existing global structure to keep control of what is happening. China, meanwhile, is opening aggressively to Africa. Russia is increasing its ties with China and Asia.

The power structure of the world is evolving and everybody is positioning to gain most control.

The third article dealt with the world demographics. People spend progressively more money until the age of 48, after which spending slowly decreases as they save more for retirement. You can tell what is happening to a country by looking at the number of new born 48 years ago!

The outcome is countries with the youngest population will grow faster such as India will assume power. Those with older population (Japan) will grow very slowly. Europe, Russia, and USA are “middle-age” countries and are entering the slower growth phase.

China, with its one child policy in 1979, had plunging births. It will grow rapidly until 2015. It looks like China will grow old before it grows rich!

(This Observations appeared in the 5-28-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

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Observations

Lee Kuan Lew, minister mentor of Singapore, created a prosperous city nation. He is recognized as a major statesman. I read excerpts of a speech on Foreign Affairs and he made interesting points. Given his standing as a global statesman, I thought to share with you some of his ideas. Very different from what you read in today’s press.

He compares Iraq to Vietnam, but not in the usual way. He noted that conventional wisdom in the 1970s saw the war in Vietnam as an unmitigated disaster. But that has been proven wrong. These are his words.

“The war had collateral benefits, buying the time and creating the conditions that enabled noncommunist East Asia to follow Japan’s path and develop into the four dragons (Hong Kong, Singapore, South Korea, and Taiwan) and, later, the four tigers (Indonesia, Malaysia, the Philippines, and Thailand).” [Ed. note: by stopping the spreading of communism]. ,p>The conventional wisdom now is that the war in Iraq is also an unmitigated disaster. However, he suggests, a stabilized, less repressive Iraq can be a liberating influence in the Middle East.

He concludes that this overall new order can only be achieved by bringing all of Iraq’s neighbors into the process of achieving this objective. The latest diplomatic efforts of Dr. Rice seem to follow this direction.

I would like to add another dimension. The awakening of China is engaging the world politically, economically, and diplomatically. Its power around the world is astounding through its financial commitments, which include a plant in South Carolina and Oklahoma and a $500 million loan to Pakistan. India is feeling the pressure and is mimicking the successful Chinese model of enterprise zones.

China is moving west. The Middle East and Islam will find themselves sandwiched between a successful Europe and burgeoning Asia. History will probably say that the war in Iraq was an unmitigated disaster. But Mr. Lee Kuan Lew may be right. Time will tell.

(This Observations appeared in the 4-30-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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4/5/14

Observations

It was cold, but I decided to go to Annapolis to check if my boat was still floating. It was an excuse to leave my usual habitat and regain some perspective on how the world works. I brought along my laptop. It is my umbilical cord in case of an emergency -- my ultimate connection.

The marina has wireless internet and the temptation was too great. I needed to review what was happening. The connection worked and I was in business. Technology never fails to amaze me. It was exactly like in my office. But this time I was sitting at my nav table with the water sloshing against the hull. In my cocoon.

I called my uncle in New Zealand using Skype and I could see him because he used a web cam. And all this was free. Incredible. I also caught up with some of my reading. The first item was the low productivity of the European countries. I expected these issues to become a problem since the inception of the EU. See my previous observations.

Spain and Italy cannot compete with Germany. In a normal environment they would devalue their currency and/or lower interest rates. But this cannot be done in an economic area with one central bank and one currency.

The outcome is capital flowing from low productivity countries to higher productivity ones such as Germany. Life becomes very difficult for low productivity countries in large economic areas with one currency. Similar problems are being faced by Ohio, Michigan, and West Virginia here in the USA.

“China welcomes ideas on how to improve its economy” I read on the Xinhua web site. “The hard evidence is that China’s soft power policy is working”, a Financial Times columnist penned a few days ago.

It is interesting to compare the two approaches to diplomacy. We are the strong guys, bashing the world to understand that democracy is the way to go.

China’s leaders go around the world totally unnoticed. Africa, Asia, the Middle East, Russia, …. They are weaving a web of common business interests. Who is going to be right? Confucius or Calvin?

(This Observations appeared in the 3-12-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

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Observations

It is 10:00 am on Sunday. They are already there, sitting around a table sipping their cup of coffee. Talking about the news of the past week. Dr. R always greets me by singing a few lines of an Italian song. Sometimes I join him. People look at us, smiling. Buy EWL, he told me, immediately writing the symbol on a napkin. It is a strong ETF and is going to remain strong. Great, I answered.

SNS was not there. Cruising to Hawai. He finished his big project of renovating a plaza and leasing all the stores. A great personal and financial success.

Dr. H did not come. Probably he had the remnants of the cold he gave me the previous Sunday when I shook his hand. Oh well, it was too late when he told me.

I like EFA, Dr. M told us with a solemn tone. You should also look into EWG, EWO and EWS. They are strong, I added. Hillary, we concluded, cannot be trusted. Besides, she is too much to the left. Oh, well, what about Obama then? Silence. He is even further to the left.

Just do it. A long-time ago Dr. R recognized a new advanced procedure in surgery. He went to England to learn it. His career grew rapidly after that. Just do it. Do not waste time was his message. He likes art. Often he flew to London to buy pieces he liked. He is now selling them at a nice profit. When you like something … buy it. A good investment idea.

The art market is soft, he added. I am not surprised, I suggested. All prices have the same cyclical turning points from housing to copper to art.

The 1700s were a major turning point for the west. The English empiricists (Locke, Hume, Berkeley) and the continental rationalists (Voltaire, Rousseau). And Adam Smith and Turgot. They anticipated the French revolution, romanticism, and communism. But how do you make big money? Not through diversification. You are doomed to perform like the averages. You need to take big bets on a few trends.

Sunday, the time to exchange ideas. I look forward to it.

(This Observations appeared in the 2-26-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
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3/13/14

Observations

The industrial revolution in England took place between 1750 and 1850. I read the book Ed gave me, but I was puzzled. As I read it I was asking myself some questions. Why in England? Why in the 18th century? What triggered the “revolution”? Or was it an “evolution”?

Trying to put together the pieces of the puzzle was challenging. Writers (historians, economists, philosophers) look at the subject from their viewpoint.

Inventors were stimulated to make new inventions. Why? The law protected and rewarded inventors and inventions through a well managed property rights system. Education was superb in England and it allowed the spreading of knowledge. Commerce flourished. The English markets were homogeneous and compact. Railroads and canals were developed to ship minerals and goods. International trade was supported by an unchallenged navy and a large commercial fleet.

Max Weber insists that the protestant ethics was the major reason for the dedication to work and produce wealth. The comparative freedom of the people allowed vertical mobility. In France, for instance, the guilds (as in Italy now) were against the laissez faire attitude in vogue in England and conceptualized by Adam Smith.

The introduction of a Central Bank and the management of the national debt created efficiency in financial transactions unsurpassed in the medieval age.

England and the English speaking people dominated the world for more than 300 years because of:
a) property rights that were rewarding risk-taking;
b) a superb educational system which spread the new knowledge;
c) excellent transportation (navy, roads, and canals);
d) a financial system that allowed the efficient financing of business transactions. ,p>This is the legacy of the industrial revolution. Any deviation from this legacy will produce a country doomed to under perform its competition.

(This Observations appeared in the 2-12-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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3/8/14

This is not the way to run an economy

[Low interest rates] has been a key element in the equity bull market, allowing quality companies to borrow billions for next to nothing, which they can return to shareholders as dividends or share repurchases, or use to make mega-acquisitions. Think Verizon Communications' (ticker: VZ) recent purchase of Vodafone s' (VOD) stake in Verizon Wireless, which was funded in part by the biggest U.S. corporate bond offering ever last year, totaling some $49 billion.

To be sure, financial engineering abetted by the Fed's QE also has had real effects. Steven Ricchiuto, Mizuho Securities U.S. chief economist, notes that the central bank's actions allowed auto makers to resume offering cut-rate car loans, which has boosted auto demand to precrisis levels. Institutional investors' access to inexpensive debt helped them scoop up large numbers of single-family homes to rent out, while individuals with top credit scores could avail themselves of record-low mortgages rates, helping to clear the housing market. (Barron's)

My thoughts? It cannot end well. Too many distortions. The pricing mechanism has been distorted in a crazy way.

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
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3/6/14

A very informative article about the housing industry and the unintended consequences of our housing policies. A must read.

According to the Census Bureau, 65.6% of households owned a home in 1980. More than three decades and trillions of dollars later, the needle hasn't budged—it's still about 65%. Subsidized mortgages did create three things, none of them good:

Read more by clicking here.

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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3/5/14

Observations

I am having fun. I am very lucky. I love what I am doing. I like the challenge. I like the frustrations. Being wrong. Being right. The psychological effort to bounce out of bad moments gets the adrenaline flowing.

As when I was playing tennis. The opponent was getting ahead. What was I doing wrong? Should I change strategy. How? Slowly I was winning more points than losing them. Great! Keep doing the same thing.

I get the same feeling in my job. My brain has to keep working and be challenged. Lou has now started a blog for me and showed me how to keep it updated. It is really exciting. More on peterdag.blogspot.com.

As I go through my research and readings, it is not unusual I react to the news and to what analysts are saying. I always have the need to share with someone what I think. But I had to keep it for myself.

Now I have a venue. An outlet. My blog. This is where you can find my off-the-cuff reactions to what is happening. Or interesting news. Some examples.

• Are energy stocks close to a buy point? This is a reaction to watching some eye opening charts.
• Are commodity prices controlled by cartels? I did not agree with a Financial Times article.
• Is the market trying to prove all those bears wrong about the economy? The market is too strong to expect a recession.
• How is the housing market impacting the start of new businesses? A unique point of view.
• Do I like the Chinese stock market? Yes, of course. But there is something making me feel uncomfortable. What is the outlook for China?
• The UK central bank keeps tightening. It is a pattern quite common in the global space.
• The dollar is strong, as I predicted. What does it mean? What are the implications?

I hope you will find my comments on peterdag.blogspot.com helpful and interesting.

(This Observations appeared in the 1-22-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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Observations

I started my first issue of 2006 focusing on the relationship between short-term interest rates and stock prices. This has been my most reliable indicator.

History is quite clear on this: rising short-term interest rates have been followed by sharp market corrections. Latest example: short-term interest rates bottomed in 1999 and rose until 2001. The market peaked in 2000. You know what happened next. The same pattern repeated itself over and over again in the past.

2006 was definitely different. Short-term interest rates started rising in 2004 and by 2006 they reached 4%, up from 1%. The market ignored the tightening cycle and had only a short-lived correction in May-June. Quite frankly I was surprised – and I still am.

In the first half I was cautious about the market and I was correct in calling the bottom in June-July. I underestimated the strength of the economy in the first half of 2006. The outcome was that I was wrong on the bond market. I am still baffled why the economy was so strong. Some suggested the reason was the huge amount of money printed to repair the damage of the hurricanes. Possibly.

Since my objective is to minimize risk and volatility, the reduction in commodity sensitive stocks was correct as the economy started to slow down.

But the market was at a transition (and I still believe it is), and it was difficult to find sectors that dominated the market. In retrospect I should have reduced more aggressively the cash position when I called the bottom in June. The lack of a precise leadership made me more concerned about risk than opportunities. I was too cautious.

Because of this mindset I ignored emerging markets. Their lack of liquidity just scares me. See what happened to the market in Thailand – down 20% in one day because they announced restrictions on capital flows.

2007 is opening with my forecast of a top in short-term interest rates, commodities and stocks as the economy keeps slowing down. There is no question the market leadership is at a transition. Read on for details.

(This Observations appeared in the 1-07-2007 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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2/26/14

Timely advice?

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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2/12/14

If he is right about high-yield bonds then the stock market is in trouble because high-yield bonds are closely related to equities.

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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2/7/14

Observations

The Soviet Union collapsed because the nomenklatura – their bureaucratic apparatus – eventually caused it to become completely inoperative.

I wrote in the past how the growth of a country depends on the number of power groups. A country grows rapidly when there are many power groups. They want the pie to grow quickly to share its wealth. Countries controlled by a small number of power groups grow slowly. There are few groups involved in sharing the wealth generated by the economy.

In economies with an autocratic, socialist, dictatorial regime the bureaucracy is in control and the only way to survive is to be part of it.

Italy is collapsing. It is the canary in the coal mine. I know the Italians. I was born there. I was educated there and I decided to leave. Italy chose an economic planning system first mentioned by Rousseau and modified by Mussolini. Some crucial industries need to be protected for the good of the country. This is the fascist credo. The industries to be protected are the big ones. What is left is organized in guilds to protect their members from the big fish and hinder new entrants in the business.

The bureaucrats love it. They control the money and how it is spent. The management of these industries rotates to gain status and money. Example. The Italian government is “trying” to find a buyer for Alitalia, a bankrupt airline. They cannot find one. Why? Because those gaining from it would rather sink than salvage it.

This is the Italian legacy of fascist economic policies. Italy is sinking because there is only one major power group in charge: the bureaucracy. And they tax and spend, totally unconcerned about how fast the economic pie is growing. Their priority is their pocketbook.

The bureaucracy becomes a major power group as it gives to its citizens what they want. Everything sounds fine. What countries like Italy forget is to ask themselves who will produce the wealth to finance the glorious and populist social programs?

(This Observations appeared in the 3-03-08 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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Observations

Why do we think the way we do in the western world? A few years ago I read a delightful book – Sophie’s World – which introduced me to philosophy. When I was a young student I disliked philosophy. But this book changed my mind about philosophy and led me to explore why we westerners think the way we do.

It took more than two thousand years for the western world to develop and focus on concepts that are driving our political, religious, financial, and many other aspects of our life. There are many books about philosophy and philosophers. They are a menu of what thinkers said and who they are. Ed and I are looking instead for something else.

We started this project a few years ago. We meet on Saturday for about a couple of hours. We talk about business for a few minutes. Ed is a banker. When we are ready to get “serious” one of us reads a few pages about the philosopher we are studying. Then we discuss what impressed us, trying to understand the main points of the philosopher’s thoughts. I take notes. We follow a chronological order. By doing so we have the incentive to study also the economic times and how and why the philosophers said what they said. This is very important for the concept I am following.

I think, after more than two years, that I am beginning to have a picture of the historical thinking transitions. I must confess it is an exciting one. It is not perfect, but I am beginning to see some light.

We think the way we do because times change. We must change to find ways to cope with these changes. We must find new solutions to familiar problems, but each time they have a different level of complexity as science tempts us with new innovations. Right now the main branches of philosophy are logic/artificial intelligence, psychology, and economics/political science.

Well, I wanted to tell you how we got here, but I will have to try another time.

(This Observations appeared in the 2-18-08 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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1/30/14

Observations

I left a few things to do on the boat. It is a great excuse for me to go there and escape. Annapolis is a great place with a myriad of good restaurants.

Akron is not the place it was several years ago when the city was the “tire capital of the world”. The four major tire companies were in town and they added some excitement (and $). Now the major employers are healthcare and government. This is what happens when lack of state leadership fails to attract new businesses and scares them away with high taxes. Oh, well, higher taxes are needed to give people what they want. The consequences are grim

Last time I went back to the boat to install the de-icer. This is a propeller you put close to the bottom of the bay and it pushes the warm water to the surface, thus avoiding ice formation around the boat. Ed decided to come with me. With Ed we are studying the history of philosophy. An interesting project. We are now studying Schopenhauer.

Ed tried to find out what is my forecast for 2008. Is it important? After digging deep into my brain I was surprised by the answer.

The forecast is not the most important step in an investment program. The investment process is what makes the difference between success and failure.

The first and crucial step in the process is to measure the portfolio performance. You are trying to maximize returns. The keystone of the process has to be the reduction of the poorly performing positions and increasing your investment in the strongest ones.

The forecast fits in the process, but should be taken as an assumption. It helps guiding your decisions. However, a forecast is always wrong, by definition. The performance of the portfolio tells you if your assumptions were correct. Right now my main “assumption” is that the economy is going to slow down. This trend will drive all asset classes. We will focus on the strongest ones.

(This Observations appeared in the 1-7-08 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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Observations

First of all, before anything else, I would like to wish you happy and joyous holidays. I would like to say “I appreciate your business”, but I do not like the way it sounds. I simply want to tell you: thank you for following and using my ideas. Thank you! Many times subscribers ask me how I prepare each issue. This is it.

On Friday I start concentrating on the next issue, on what has happened, what is really relevant, and taking the “noise” out of the news.

On Saturday I make a list of the data released since the previous issue. Then I start to collect the data, focusing on the revisions and what they mean. On Saturday afternoon I enter the data.

Sunday is the most creative part of the process. I analyze hundreds of charts and relationships. They provide me with clues on what is happening. I make notes as ideas go through my mind.

On Monday I review my notes and start writing the content which starts on page 5. This is when I let my mind go and I nail the major trends. I define the relationships between leading, coincident, and lagging indicators and their impact on the financial markets.

On Tuesday I finish writing the first four pages and most of the issue, making sure my ideas flow correctly and always keeping an eye on recent market developments.

Wednesday is devoted to the stock sector analysis and the review of the many graphs I have developed. This is a very intense day because I study the many investment ideas I collected in the previous days.

Thursday is the day when all comes together. I make sure I have the right recommendations, strategies, and market timing conclusions. I constantly review my market indicators and finalize the timing.

Friday and Saturday are devoted to preparing the final format to be posted on the website. At the end of this process my brain feels completely empty. But I love what I am doing, knowing very well next Friday I have to start all over again.

(This Observations appeared in the 12-26-06 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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Observations

Our world has not changed in 500 years. All this time and our basic human, political, and religious issues are unchanged. In 1500 the Spanish were the first to move to South America. They did not want to colonize. They wanted to ransack the region because they heard they could find gold, silver, and spices. They destroyed and killed to amass wealth.

The Spanish king did not care. He wanted the gold. The human sacrifice was ignored. For him South America was a gold mine. No more. No less. All the efforts spent by the conquistadores were measured in the weight of gold they were bringing back to Madrid. Spain was obsessed with becoming a military power. Fewer and fewer people were left to work. This was especially true after the Jews and moriscos were forced to leave because of the Inquisition.

The same Spanish feudal system with the nobility at the top and servants/slaves at the bottom was kept in the lands conquered by Spain where the laws were dictated by Madrid. The Church followed the conquistadores and established the secular (by supporting the Spanish rulers) and spiritual power it had in Europe.

The development of North America was quite different. The Puritans (Calvinists) were the first to arrive. They wanted to build a new world. Those who followed had the same spirit and courage. Success came at the expense of very hard work.

A spirit of solidarity and brotherhood kept them together. Freedom (political and religious) was an important issue because they all left as a result of persecutions and the tight feudal and monolithic European system. It was not gold. It was freedom.

After 500 years we still have the same major regional differences in the world. a. Where Spain and theocracy reigned (Latin America, Mediterranean countries, Middle East); b. North America, northern Europe, Australia and New Zealand (Protestants); and, c. Asia.

500 years and nothing has changed. We still think and act as then. What has happened, and why, is obvious. And yet, we refuse to change after 500 painful years!!!

(This Observations appeared in the 12-4-06 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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1/13/14

Observations

Kathi, my Swiss wife, and I were having lunch. She prepared a typical Swiss dish – bread slices, smeared with mustard, topped with Gruyere, grilled in the oven, and dusted with pepper. A glass of Shiraz-Cabernet. Sun coming through the windows. The setting was relaxing.

We talked about a “Travel” channel documentary showing Zurich, a wonderful city, full of great stores (expensive and very elegant), tea-rooms with delightful patisserie, private banks without names on their doors, exquisite and cozy restaurants, and an attractive lake framed by awesome mountains.

Yet, nothing is perfect in paradise, where a well educated population has made a mark in the world economy with their productivity and innovation.

In the 1960s Italian workers from the south migrated to Switzerland. Because of the shortage of labor they would work nine months and then go back to Italy to their families to rest and enjoy their earnings.

The Italians were followed by the Spanish. The conditions were harsh, but the pay (in Swiss Francs) went a long way in their country. Workers were well organized by the local authorities. Medical assistance and schooling was provided and encouraged. Swiss discipline in the behavior of the guests was expected.

The Swiss are always prompt in helping countries around the world where there is need of financial and medical assistance. It was natural to open their well guarded frontiers to the refugees of the Hungarian revolution in 1956.

However, things have changed. Immigrants from Eastern Europe and Asia are flooding Europe. Switzerland and Europe do not have the infrastructures to absorb all these poor people. Besides, work is difficult to find for so many persons. Even the tranquil and bucolic Switzerland (and other European countries) is experiencing crime and violence because survival demands it.

These people are desperate. We have to deal with them. We cannot brush them aside. We have to find solutions. The alternative is horrible crime and civil wars. Wars and hate will not do it. What are we doing about it?

(This Observations appeared in the 11-20-06 issue of The Peter Dag Portfolio ).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
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1/2/14

Inflation and your investments: Wages and Inflation

The growth in wages is closely related to the behavior of the business cycle. As the economy strengthens, the growth in wages tends to increase as unemployment declines. As unemployment declines, confirming a strong economy, the tighter the labor market becomes, the more pressure there is on wages to rise. A slowdown in the economy close to or below the long-term average of 2-1/2 to 3 percent, creates an increase in the unemployment rate; and with more availability of workers, growth in wages is likely to stabilize or decline.

The growth in wages has the same turning points as inflation as inflation because its behavior is that of a lagging indicator. The outcome is that turning points in wages follow turning points in coincident indicators both at troughs and at peaks of the business cycle.

The process can also be visualized as follows:
• A peak in the growth of the money supply is followed by
• A peak in the growth of the economy and employment, which is followed by
• A peak in the growth of wages, which is followed by
• A trough in the growth of the money supply, which is followed by
• A trough in the growth of the economy and employment, which is followed by
• A trough in the growth in wages, which is followed by
• A peak in the growth of the money supply
And the cycle starts over again.

Because of the cyclical relationship between wages and inflation, it is generally believed that a tight labor market, a strong economy, and rising wages are inflationary. There is not necessarily a relationship between wages and inflation. In other words, growth in wages may not be inflationary.

In the 1960s and the 1980s the US economy experienced strong growth in wages but very low inflation. In fact, in the 1990s wages were growing at three to four percent, while inflation was close to two percent. In spite of this evidence, policymakers, including some members of the Federal Reserves systems, believed in the Phillips Curve. The Phillips Curve relates the simple fact that a higher unemployment rate is associated with lower inflation and a lower unemployment rate is associated with higher inflation. The policymakers' conclusion is - let's not let the unemployment rate fall too far down, otherwise that could be a signal that inflation will start rising due to higher wages. Again, this is a fallacy because the facts have shown quite clearly that wages in the 1960s and the 1990s were rising faster than inflation and inflation remained under control. The only thing that the Phillips Curve shows is the obvious truth that as employment growth declines, wages accelerate. However, the experience of the 1960s and the 1990s shows quite clearly that an increase in the growth in wages is not necessarily inflationary.

So how is this dilemma solved? The dilemma is solved by looking again at real short-term interest rates. High real short-term interest rates increase the cost of borrowing and business is forced to invest in higher rate of return projects. Consumers on the other hand are also discouraged from overspending due to the higher cost of borrowing.

Let's look at it from a business viewpoint. The higher cost of borrowing forces businessmen to invest in projects that have a higher rate of return. But higher rate of return projects are usually projects with a high technology content, higher rates of return, and higher productivity. This is what is the missing link - productivity growth. High real short-term interest rates force businesses to be efficient and therefore increase their productivity. As productivity increases, the higher growth of productivity allows business to absorb the higher increase in wages. For instance, if wages are increasing at four percent, and productivity is also increasing at four percent, the unit labor cost to business is zero.

Wages are not the elements that create inflation. The element that creates inflation is low productivity growth. However, with high real short-term interest rates, by keeping prices down, by keeping the inflationary process low, it forces business to improve productivity. Since business cannot raise prices in a period of low inflation, they have to improve productivity to improve efficiency and improve margins. Wages are not inflationary unless productivity slows down dramatically. But this can only happen in an environment of very easy monetary policy with very low real short-term interest rates at or below the inflation rate. For instance, although in 1999 workers compensation was rising at a very strong 5.2% pace because of a very strong manufacturing sector, unit labor costs, that is labor cost-adjusted for productivity, were actually down 1.7% because of strong productivity growth of 6.9% in the manufacturing sector.

Investors should look at the trend of unit labor cost which is a quarterly release by the Bureau of Labor Statistics that ties productivity to workers compensation and also shows the unit labor cost index. Unit labor costs are also lagging indicators. Unit labor costs typically tend to rise after the economy is growing very rapidly, is in the upswing and slows down following a slow down in the economy. However, if - and this is a very important point - real short-term interest rates remain high, one should not expect a strong rise in unit labor costs - if any at all. The main reason is that high real short-term interest rates keep inflation low. As a result, business cannot raise prices. In order to improve profitability, corporations have to increase productivity, which keeps labor costs down. We will see later how this information regarding trends in commodities, trends in unit labor costs, and trends in inflationary pressures impact decisions concerning investment in bonds.

(From Chapter 7 of my book Profiting in Bull or Bear Markets. Published also in Mandarin and on sale in China. The book is available at Amazon.com).

George Dagnino, PhD Editor,
The Peter Dag Portfolio.
Since 1977
2009 Market Timer of the Year by Timer Digest
Portfolio manager

Disclaimer.The content on this site is provided as general information only and should not be taken as investment advice nor is it a recommendation to buy or sell any financial instrument. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

STRATEGIC INVESTING FOR UNCERTAIN TIMES.
Learn how to manage your portfolio risk and sleep comfortably. Improve the certainty of returns by taking advantage of business cycle trends. Learn to use simple hedging strategies to minimize the volatility of your portfolio and protect it from downside losses.
Receive your user id to access 4 FREE issues – and all the previous ones - of The Peter Dag Portfolio. Email your request to info@peterdag.com. New subscribers, please.

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