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

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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.

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.
You will 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.

FOLLOW ME ON TWITTER @GEORGEDAGNINO FOR MY LATEST VIEWS.