Market Falls Again - 4 Fatal Investing Flaws - Update February 5,2010

Marc's Notes:

First of all, let me thank all of you for pledging to KVMR in these times of economic stress. Not only for the station but for me AND YOU as I know the thank you gifts like the newsletter, the consults and the website will help protect YOU and our community from Wall Street stealing our money and going out to eat with our money in New York, or buying mansions in the Hamptons.
We have to keep our money HERE in Nevada County to help Nevada Countians, not pad the pocketbooks of Wall Street crooks.
That being said lets cover the markets.
Dow 10,750 was close enough. Technicians who follow the Dow, called Elliot Wave Theorists tell us 10,500 was the turn point to look for. I mentioned that markets usually never do what they are expected to and IF the Dow got to 10,000 (I thought it would turn in the 9000’s), then my expected turn points would either be 10,250 or 10,750. (See late 2009 updates).
The Dow turned at the latter thereabouts and now is looking more like lower lows and lower highs are in store. (A falling market). Where she stops, nobody knows!

Right now, the Dow is starting to crack DOWN through 10,000. UH OH!
My orange alert may change to RED soon. I sold 10 % of my long positions this week and put orders to sell out another 5 % or so if the market cracks 10,000.00
I also bought SCC, a contrary fund that shorts services and retailers. I still hold a ton of dividend payers so I needed more coverage. I still hold natural gas for a long term play on a beat up market, but realize if the Dow starts to free fall, EVERYTHING will go with it. Gold stocks, oil stocks, foreign stocks, and foreign currencies… you name it, down it will go.
Massive sell off once again. Everything but CASH will be hammered. Oh, contrary stocks will go UP and make money however.
Now the questions becomes “What now”.
Well, that’s a tough one. Fundamentally, this market should go to the 6000’s again, but the FEDS and CNBC spin this so much, investors really can’t get any truth on the markets.
Yes, Money Matters aims for the truth, but we are a very small mouthpiece in a very LARGE world, so relatively few hear us. But you can help by spreading the word and passing out the shows. You have my full permission to pass out the shows and newsletters, sign up others to the newsletter and subscribe to the site if you feel you need the material. Yes, some of it COSTS money, but the money covers the website only. I ‘m not making millions on it.
It barely pays for itself so ITS NOT THE MONEY to me, its educating my fellow humans about the greed and crooks and fools ruining this great nations that your fathers and mothers and my fathers and mothers and sisters and brothers fought and died for. These people are destroying our rights, our freedoms and our futures.

I am posting the main points to last Mondays show about the 4 fatal flaws in investing and advisors at the end of this letter. It is the actual script of the show so it will have changes, mistakes, notes- everything I use to do a show. It was not edited as it is the actual show notes I use. I don’t have time to rewrite it so you get it like I read it. It’s actually quite interesting to those wondering how I do a show. I use these notes. Anyway, look for it at the end of this letter. It has some great points in it and think it is one of my best.
Markets are now in “TEST” mode. Will this be the slide that turns into an avalanche? Or just a temporary set back. One thing is for sure, many investors have their finger on the trigger due to the last time they were burned just last year. That crazy falling market is fresh in their minds. They are ready to head for the exits if an economic market fire breaks out in the form of a fast slide. I am holding my breath. The next fall could be breathtakingly fast. Prepare your stops and contrary funds and keep most of your money safe OUT of the stock market. Buy physical gold and silver always, get money OUT of the USA and have some foreign currencies. I am in talks constantly with EVERBANK about a new NO RISK product where you can own foreign currencies. I will keep you updates as soon as I know more. The DREAM PORTOFOLIO will be update soon and I will post it as soon as it is. The SUPER DIVIDEND PAYERS LIST was JUST updated and is available now on the website. www.moneymanagementradio.com.

All for now.
Show text below.
Marc

SHOW # 85  January 2010 Pledge Drive
This show is about money, as money does matter, and the matters of money effect us all in some way or another. Whether you have a lot of it or a little or it, it controls our economy, our country, our planet and in some way or another controls the very way we live our lives. Its about your money, your lack of it or abundance of it, it’s about our lives and livelihood, in short it’s about you.


This is a special Pledge show, the regular Money Matters show will air  the third week of February. But todays show is a special show. For one we are rounding out our membership drive and I decided to do this show to try and explain just why it is important you pay attention to your money yourself. I no longer want you to allow someone to handle your money, or at least consider the possibility that YOU can manage your account with just a few hours of instruction and guidance. Of the thank you gifts we are offering today, there are 2 that I think that most of you should take of advantage of at least ONE of them, because either of them, depending on your situation will save you probably thousands of dollars over the long run, AND allow you to truly understand how to handle your money and why you should do it your self.
I am going to try and convince you to meet with me by pledging to the station today during the show, OR by at least allowing yourself access to the moneymatters website so you can finally understand why we buy  what we do, what true diversification is, and why most if not almost ALL investors and financial advisors and probably your portfolio got CAUGHT in the market crash and how Wall Street managed to GET YOUR MONEY. What you have been told and taught by all that financial media and what you have been taught and told by your financial advisors and those firms managing your funds is WRONG. IS a lie. For if it was true, you WOULDN’T HAVE LOST MONEY in the last market downturn. And how you are probably setting up to LOSE AGAIN if you still go by what they told you and believe buy and hold what they tell you to buy and hold will fail again, just like it did.If the market crashes again, and there is every reason to believe it will, you will lose another third if not more the next time, and everyone will have that stunned walk around in a numb daze as you watch your life savings disappear again, only this time for good. I am not kidding you. If you thought I was right before, and we WERE, you just wait. You aint seen nothing yet and I am dead serious.
I want to show you, show everyone, that 1) If you don’t pay attention to your money,  it will flee you, and THEY will end up with your retirement. 2) Money managers, investment firms and financial advisors are giving the WRONG ADVICE, and again will fall prey to a market crash with your funds, and 3) that YOU, yes YOU can do it yourself, if your willing to spend as much time as you do on your cell phone bill, on your own money. Its true, most people spend more time looking over their cell phone bill then their account with their life savings in it. You’ve got to be crazy to give all your money over to someone who, very well be a nice guy, but really doesn’t understand in  the least how to maneuver in a market crash, doesnt understand what true diversification is, doesn’t STILL know that buy and hold is useless, and doesn’t understand the forces in the world that affect markets in ways that will devastate most advisors and investors.
I am not telling you this to get you to meet with me for the money, trust me on this one. I am for the most part retired. I care not to do financial consulting full time money managing and wont do it if asked for any amount of money. ITS NOT THE MONEY . I want you to LEARN YOUR SELF, how and why you must manage your own money, your own portfolio, or you will most likely find in a few years there is none there to manage, as your advisors will take you down with the ship, all because THEY don’t understand what is a work here. Indeed, if you lost money during the last crash, I want you to listen very carefully to this show, as it is critical to your financial, indeed your families future. What I am trying to get you to do today is either one of 2 things. I am going to try and get you to schedule a 3 hours consult with me or get access to the website. The website has our plan on how to diversify your money in  way that is unlike any firm or advisor would. If you have over 75,000 or more in your retirement, then I am going to try and get you to call and set up a personal meeting with me. The cost for website access pledge is 250.00. The cost of the pledge for meeting with me is 750.00. Yes those amounts are more then a
60.00 cd pledge, but its also more then your cell phone bill, and if you’ve got that kind of money in your retirement, then the money I will probably save you by showing you how to manage  your money yourself will dwarf the amount of the pledge. To show you I know what I’m talking about, I am going to tell you some information that would have cost thousands from me long ago, but now I am going to tell right here on the air what the fatal flaws in your advisors and most investors thinking is that leads them to ruin in down markets.

Heres the 4 common faults with most money managers and advisors that I see over and over again, the same 3 faults, and I want you to think about either your account or your money manager or advisor as I go thru these.


First all, anyone that tells you buy and hold works or that stock markets go up over the long haul are basically full of crap.
1)
buy and hold works fine in up markets, but so does a monkey with a dart and a wall street journal. Statistically, its been proven time and time again, advisors and the best of money managers don’t beat a dart board or the market indexs ever in an up market. NEVER. IN an up market ALL STOCKS go up. Buy and hold works fine in an up market but in a down market, DOES NOT. Don’t believe me? Look at your statement in the last crash. I saw and have seen hundreds if not thousands of statements. They all hold mutual funds and every kind of stock known to man. In the last market crash, they were ALL DOWN. Buy and hold is like an umbrella that only works in the sun. In the rain, it doesn’t work, and if buy and hold doesn’t work in down markets, IT DOESN’T WORK!  You found that out with millions of other investor. SO if you advisor or firm is like any other advisor or firm, you bought and held all the way down. Buy and hold doesn’t work, doesn’t protect you and is MADNESS in the markets we have today.
2) markets also go up over the long haul. If you believe this you simply haven’t looked at history, nor haven’t studied past markets nor have any idea what US DOLLAR purchasing power is. I can show you decades of US stock market charts that show NO GROWTH over 10, 12  or 15 years. Just look at the last decade for your most recent example. Dow 11750 in the year 2000, DOW 10000 a decade later. TENS YEARS . the most recent 10 years > ZERO GROWTH. Better yet, a 15 % LOSS.  That doesn’t count inflation. Dollar purchasing value loss. ADD that in and you’ve lost 35 % or more in the last 10 years. Use inflation adjustments over the  last century and the  US stock market has done little better then a no risk US BANK ACCOUNT. And the banks account is guaranteed NOT TO LOSE value, and no loss of sleep by you. If your advisor tells you stocks always go up over the long term, he or she is full of crap.
3) Most advisros, believing markets always go up over the long term, and always come back, don’t have an exit point. People always ask me if I can recommend an advisor after I tell them I wont do it. I always answer the same thing. If I find an advisor that can answer one simple question, I would recommend them. But not one of them can tell me my answer to my question. My questions? At what point do you sell me out? Simple .. at what point of loss, either percentage wise or DOW level wise will you liquidate my stocks. The truth is, no advisor that I know of will answer this question. They work like this   EXPLAIN   down 5   down 10  down  etc

They go from your not down far enough to your down to far to sell. Let me tell you one thing right now. Your lucky the markets stopped where it  did. IF the government hadn’t stepped in, and literally poured trillions into the market, your firm or advisor or money manager, believing markets always come back, would have ridden it AND YOU all the way down, until, strangely enough to where most people sell, which is where the wife steps in and says we have to get out with something!  And that point is down 75 or 80 % .. and strangely enough, that’s when everyone sells, its called the climax bottom, and strangely enough, that’s where you should be buying. Like I said, your lucky the market stopped where it did. So I want you to ask your self, did your advisor call you and say sell? Did your firm sell all your holdings somewhere down the slide? Because if they didn’t, he fits the fault to a  T   He or she NEVER HAD an exit strategy, they never had a fire door out, they never really had a plan, and you never had a chance, and that’s where all your money, your retirement was, based on a game of chance, if this describes your advisor, you are EXACTLY what I am describing.

And the final fault, the 4th common misbelief of advisors and investors? That owning a basket full of mutual funds and or bonds or a combination of both is diversified. If your portfolio owns only mutual funds, money market funds and bonds, you are about as diversified as a wall painted white and white only. IF you own a basket full of mutual funds, why is that not diversified? Well what do you all own. All stocks!  And which way does the market have to go for you to make money? UP. And if you own all US stocks, the US market has to go up. And remember, even if you own foreign stocks, ALL STOCKS except contrary stocks, stocks that move in opposite of the market, If you own one stock or one mutual fund or a HUNDRED.. if the stock market falls, ALL STOCKS GO DOWN, no matter what company they are,  no matter country they are in, no matter how big the mutual fund is. In the last market downturn, and indeed in major future market wipe outs, ALL STOCKS GO DOWN. So if you own a zillion mutual funds, if the stock market crashes, YOU CRASH WITH IT. True diversification should be balanced right. If something goes down, something goes up right. After all, diversification MEANS BALANCED. And it doesn’t mean owning a  basket of mutual funds, that all depend on a rising stock market, that all depends on an UP market. If your portfolio from john jones or Merrill lehman or infidelity or John smutx your  financial advisor holds all bonds and stocks, then again, your are EXACTLY in what I am specifically warning you against. You are so NOT diversified, I wouldn’t even put my cat into what you hold.  And if what you hold sounds like exactly what I just mentioned, you don’t have a financial advisor, your have your life savings in someone that not in the least understands what investing is about, what protecting you is about, and you are so much in danger it literally gives me the shakes. And one more fatal flaw in their investing strategy. You know how much I recommend and like dividend payers. Well first off right now I am advisiong you only have a very small portion of your money in stocks, and not because of the market mostly, but because you should not have a big protion of your money in any one asset. True diversification means owning many other things BESIDES stocks. Think of a centipede with many legs. Only one leg should be a stock leg. The other legs are just as easy to own but protect you in so many other ways and don’t listen to nor care about a stock market crash!  You should be in foreign currencies, some savings accounts, some overseas bonds, some gold and silver, real estate yes, but only a another legs worth, you should own some stocks that go UP in down markets, some foreign bonds, some overseas accounts, MANY MANY different areas, and again only a small portion in stocks, but just as important,  when you DO own stocks, almost ALL your stocks should pay you interest … yes   interest .. like a bank account.. interest.. in stocks their called dividends!  Let me ask you, if I own a stock that pays me 10 % interest in dividends, and you own a mutual fund that pays you nothing, like most mutuals funds, they don’t pay anything, which way does the market have to go for you to make money. UP!  Explain what I make….. then explain 18 ‘%  = 4 year double       explain since year 2000    versus no interest.
Same market  I make 2 and half times my money  you sit with zero gains.


And remember, since all stocks move together, mine will up just like yours if the market takes off but I make even more, and if the market goes nowhere , you make nothing, I make 18 % and quadruple my money in 8 years while you sit waiting for the market to go up, Did you double your money in the last 4 years? Did you quadruple your money in the last 8? Again, if your advisor has you sitting in non paying mutual funds waiting for the market to go up, you don’t have an advisor that in the least bit understands what safety and making money really is about.
Their sheep! Their toxic to your money! And they are charging you to boot.

That’s why I am asking you to one of 2 things. Call now and pledge to meet me. Albiet  it is 750.00 but you 1) pay me a ton more if I decided to manage anyones money, like 10 times more, but I wont do it anyway, 2) you will save 10 times that over the course of a few years doing it yourself, and 3 ) most importantly, you are at grave risk in my opinion of falling into the traps of these so called advisors and firms that have NO IDEA what is really safe and diversified. And its your future at risk, and AT RISK in the most dangerous of markets since the depression. Trust me on this one. If you think NBC sent a news crew all the way up here to film my good looks, you haven’t seen me, but know they sent a crew up here because I told you the banking crisis and housing crash was coming because of what I saw, and now I am telling you what I see. I see literally hundreds of folks just like you, at grave risk of flawed strategies from your current firms and advisors. Look at what you lost and what you hold. Ill bet you a pegged it to a TEE. If I described you, then either get access to the website, through a pledge of 250.00 are READ the strategy AND get all the shows that cover it all, or if you have any money at all to speak of in the market, then pledge to meet with me, and after about 3 hours, you WILL be able to get rid of those that could harm you, do it yourself   UNDERSTAND what I am talking about, and for the rest of your life UNDERSTAND your money. Remember, if your not willing to spend two hours a year on your life savings, what do you think will happen. 3 hours with me, then 2 hours a year, that’s all I ask. Now how hard is that. Now I m gonna take a break and you can call now..
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