Newsletters - Past Issues

Update March 16 2025

Damn, it keeps going down!

Recent weeks have brought pain and suffering to both investors and their portfolios. By how much depends on what time frame one looks at and what indexes.

It’s safe to say the latest statements from your advisor or brokerage firm for most investors may have been pretty ugly.

The whole mess started right around February month-end and continued almost without respite for two solid weeks. We had a little bit of encouragement Friday the 14^th, but we have to see whether that holds or if back down we go.

Continuing inflation expectations along with new tariffs and the threats of more have dampened investor enthusiasm.

Many investors may have seen their balances fall more than they have in a long time. To put it mildly, the selloff has been relentless.

There were very few bright spots. Gold held its own and is pressing up against new highs but Bitcoin didn’t fare so well. Even bonds got hit, which makes this recent sell off a bit rarer than most.

Whereas the run of the mill stock correction usually leads to bonds rising in price, when the bloodletting bleeds over to the bond market and bonds fall in concert with stocks, it means it’s getting more serious.

When market routs cause you to wring your hands and furl your brow as you see balances drop, remember that markets never go up in a straight line. It’s more like a stair step pattern with an occasional steep drop here and there.

The question becomes WILL it stop or will it go down forever. Although going down forever in reality seems a pretty foolish prognostication, the mind wanders that when you see hard earned money evaporate.

The evening news anchor and your financial advisor will offer up a calming voice and reminders that markets always come back. But that can be little comfort as money evaporates day after day.

Advisors are not allowed to say what markets will do nor offer any guarantees of any sort outside of FDIC insured products. But even FDIC insured products like bank accounts and Certificates of Deposits are guaranteed by a Federal Government entity and not the advisor.

Advisors offering any guarantees on market direction may be in violation of regulations that prohibit such statements. But in a weird way there seems to be an exception.

In my half century or so of being in the business, I have heard probably thousands of statements by licensed professionals everywhere that the markets always come back. Regardless of the exact words used, the inference, or should I say the insistence is, that markets will always continue to rise and surpass previous highs given enough time.

Although the regulations are clear that offering any guarantee or even stating the markets “always” comes back is an implied guarantee by using the word “always”, this seems to be an exception. Simply put, the idea that the market always comes back and stating that draws no ire from authorities that I can see.

I think the idea and the permissions to say such a thing comes from the historical fact that if one looks back at the history of the Dow Jones Industrial Average and indeed, all the other stock markets like the NASDAQ, the S&P 500, the Russell and all the other exchanges, they are indeed higher than they were at inception, no matter what that inception date may be.

It is an historical fact that the markets HAVE always come back. But “HAVE come back” does not technically allow us to say “WILL come back”. Remember “past performance is no guarantee of future results”.

Sure, I am splitting hairs here, but it’s odd how licensed financial professionals and even the news outlets are allowed to say such a thing that is obviously an implied guarantee and prognostication that is in direct violation of any regulation that prohibit such statements.

That said and using the reasonable man theory, which means lets be reasonable here Marc, historically the markets, at least OUR stock markets, have always come back and gone higher over time.

What is also important however is how LONG it might take to do so.

Consider that most markets did not recover fully from the 1929 stock market crash for close to a decade, and it took 15 years for the NASDAQ to recover from the DOT.COM 2001 crash. I know they say for us to hold for the long term, but I really don’t know how much LONG I have left in my TERM.

In conclusion, we never really know what lies ahead in the stock market. No one does. The market COULD recover tomorrow, next year, in ten years or even never recover.

After all, anything is possible right?

That said, it’s best to plan for all possibilities and never rule anything out. But the way I see it, the markets will eventually get it together and start to rise again.

How long that takes however, is another thing all together.

“Watching the markets so you don’t have to”

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(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance services. Email: news@moneymanagementradio.com

Markets got you down?
Call me (530) 559 1214

CAN BITCOIN REPLACE THE US DOLLAR UPDATE FEB 22 2025

BITCOIN VERSUS THE US DOLLAR

Crypto currency comes in many forms. Bitcoin being the most notable, there are many others that go by names like Ethereum, Ripple, Stellar Loomis, EOS and Lightcoin to name a few. There are an estimated 10,000 crypto currencies now in existence.

The idea behind crypto is it is anywhere and everywhere there is internet access. Not controlled by any one government, crypto is “mined” by using mathematical formulas called block chain technology. Wikipedia describes it as: “A cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets”.

As a currency, crypto currencies meets some of the characteristics a medium of exchange must possess. A currency must be hard to replicate, be divisible, recognizable, have uniformity, be portable, have acceptability and maintain a store of value. On the first six characteristics, crypto coins could be argued fit the bill nicely. My objection is having issue with the last characteristic, maintaining a store of value.

Its goes without saying that at times, the price of crypto currencies can vary tremendously. Lately, that has been an understatement.

Stories of skyrocketing prices and subsequent roller coaster like plunges are common. Bitcoin itself briefly breached 100,000.00 a coin just a few weeks ago.

Although a rising price may convince some investors to believe crypto might make an acceptable currency replacement, the very fact it often moves so violently violates the store of value characteristic a useable currency must possess.

Store of value means both the buyer and seller of the currency must have faith in its stability. Stability meaning it doesn’t go up or down much. Certainly the buyer of crypto relishes the meteoric rise when it occurs, but like all things money, there is always someone else on the other side of the trade.

If a buyer of crypto makes an overnight fortune on a price spike, the seller of that very same crypto lost an equal amount in value.

For to buy crypto, one must have exchanged something else for it.

For example, if it is another currency that is exchanged, the person who sold the crypto now holds a currency that has fallen in value by an equal amount.

Given the recent price instability of Bitcoin, the very definition of maintaining a store of value is almost nonexistent and therefore, at this place in time, Bitcoin cannot be considered a usable currency replacement.

Another attraction of crypto is the fact no one or no one government can shut it down. Again from Wikipedia: “It is a decentralized digital currency without a central bank or single administrator…………”.

Since the internet is worldwide and unstoppable, the thinking goes that crypto coins can’t be confiscated by meddling governments.

However, governments of the world don’t have to confiscate crypto currencies to stop their usage. All they have to do is shutdown the exchange websites that trade them. Sounds unlikely but many countries have already done so.

Quite simply, if your country of residence decides it doesn’t want you trading crypto, it can shut down all the ways you can access it.

Internet workarounds are certainly possible, but to the average Joe, cyber space backdoors may be difficult to access.

Central governments will always strive to maintain strict controls over their respective currencies to insure their viability.

A country’s currency is the lifeblood of their economy so controlling it insures the ability to use the government check book, which means the ability to deficit spend without restriction.

History has proven time and time again a government will insure its currency remains valid and is not usurped by another. This would obviously include curtailing the use of Bitcoin or any other currency whose ownership becomes too wide spread.

That said, to say central governments aren’t fully aware of the threat crypto coins may present to their specific currencies would to be more than naïve.

The U.S. government is already looking into issuing its own version of cyber coin called the Central Bank Digital Currency (CBDC). President elect Trump has also indicated the U.S. government is looking to expand its control of the Bitcoin market by establishing a Bitcoin reserve of its own.

The U.S. is not alone. The issue is being discussed among central banks worldwide.

That said, in this analysts opinion, it’s only a matter of time before governments bring down a harder hammer on the entire cyber coin phenomenon in order to insure continued control of all things money.

MEDICARE OR FIRE INSURANCE NEEDED

HOW ABOUT LIFETIME INCOME ANNUALY INTO THE DOUBLE DIGITS?

CALL ME

(530) 559 1214

MARC CUNIBERTI

CALIF INS LIC#OL34249

Video home insurance self inspections Update Feb 20 2025

Home Insuarance Inspections

Home owners in high fire risk areas probably already know they have a good chance of being routed to the California Fair Plan for the fire portion of their homeowners insurance. Having covered Cal Fair in many articles, I won’t go into the specifics of what those policies cover, but it’s safe to say the fire risk and a few related ones are what Cal Fair insures.

The liability part of the homeowners policy along with a few other different risks such as water damage, theft, and falling objects to name a few are addressed with a companion policy called a Difference in Conditions (DIC) policy, also nicknamed by some a “wrap” policy.

Interesting enough, the Cal Fair policies are easy to get and coverage is seldom refused. What is next to impossible to obtain is the DIC policies.

Since the DIC doesn’t cover fire, why would that policy be hard to get and why are the DIC companies pulling out of California en masse?

Without journeying into the weeds too far, just know that the DIC covers falling objects while the Cal Fair covers windblown objects. Since a tree, or even the fire itself, could be argued as to what caused what and what preceded what, therein may lie the problem. Additionally, when whole towns are obliterated by a wildfire, the lawsuits fly everywhere. The insurance companies that could write the DIC policies probably don’t want to be anywhere near the many lawsuits and claims that follow.

When you obtain a Cal Fair policy, you can expect an inspection of your property at some point. You may not even know when or if it occurred. On the DIC policy, if you are lucky enough to get one or keep the one you have, an inspection may also occur. Once again you may or may not be notified.

Recently, a few DIC companies are requesting video/photo inspections by the homeowners themselves. A fairly new method of obtaining the information they need to confirm a policy, the self-inspection video has requirements homeowners should be aware of in advance so one does not video tape him or herself out of coverage.

Once notified a self-inspection is required, you will receive detailed instructions by a web link `system` and questionnaire. Making sure your video will meet with approval, prepping and servicing the areas that will be filmed will not only give you a better chance at keeping your policy and/or keep premiums low, it will likely make your home just a little bit safer for both you and the insurer.

They will require all sides of the home be filmed or photographed, including the siding and the roof, your furnace and HVAC systems, fireplaces, visible plumbing in and around all applicable areas, the electrical panel with manufacturer label, the water heater, the kitchen, living room, and other rooms, the appliances, and any outbuildings, structures, pools or other systems or features they deem necessary.

Obviously you want the video to show a well-kept home, free of debris, with well serviced appliances and good housekeeping. It is suggested you photograph/video graph in daylight and have good lighting indoors.

In conclusion, the self-inspection option and the guide they will provide you assists both you and the insurer. Doing what is required will also provide a video/photo record of many things in the home which will help with any claims you may have should an event such as a wild fire occur.

“Watching the markets so you don’t have to”

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(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

Need new fire insurance ?
(530) 559 1214

Call me ~

Cuniberti Money Matters update Feb 1 2025

Nvidia and Apple are worth HOW MUCH?

Too big to fail is a term that hatched back during the bank and real estate blowup in 2008/09. It referred to the size of the major banks that controlled so much money, the Federal Reserve would have no choice but to bail them out. Not doing so would have, so they thought, brought down the entire financial `system` of the United States and possible even the entire civilized world. We will never know if that premise holds true as the government is convinced of such and will has lived by that mantra since 2008 and will likely continue to do so.

Enter today’s Money Matters article and I dare to use the “too big to fail” theory on another financial entity, that being applicable to an individual stock. Or possible even many such company stocks whose value has ballooned to previous unimaginable heights.

A company’s total value, which might also be thought of a company’s worth, is arrived at by taking the number of shares in the stock market multiplied by the current price of an individual share. For those wondering what a “share of stock is”, think of it like the pink slip of your car. Whereas you only have one pink slip for your car showing ownership, companies have many shares showing ownership. Your car can be said to have one share, and thereby one owner. Companies however create many shares so the ownership of that company can be distributed and traded back and forth with many owners.

For example, XYZ company may have 1,000,000.00 (one million) shares out in the public markets being actively traded every waking minute the stock market is open. If at any one time the share perhaps trades at two dollars, it could be said one million shares at two bucks apiece would put a value of the company at two million dollars.

Fast forward to last week in the stock market and semi-conductor chip market suffered a major blow to their stock prices on news a Chinese company had found a better way facilitate the hot artificial intelligence (AI) market.

The largest chip maker NVidia, who arguably led the AI market, lost 600 billion in value in one day. Prior to the crash that hammered many chip stocks, the value of NVidia stood at 3.5 trillion. That’s with a “T” mind you.

Keep in mind, the entire value of all the money exchanged for all goods and services in one year (GDP) in the United States stands at about 27 trillion. Doing some quick math, the previous value of NVidia before last Monday was about 12% of GDP. NVidia’s one day loss of 600 billion was about 2.2% of GDP.

Does anyone see a problem with this?

Now understand that a company’s value rising and falling does not immediately affect the overall economy such as a default or bankruptcy of a large financial institution would. We saw how something like that can and did cause market upheavals back in 2008 when a firm called Lehman Brothers collapsed which started a chain of financial implosions that almost brought down the global financial system.

But when we see just one company’s net worth being the equivalent size of 12% of the entire U.S. economy as well as a one day sell off the size of almost 3% of that same economy, you have to wonder just how much air has been pumped into the stock market balloon by the professional gamblers of the world also known as “investors” in more polite company.

Nvidia slipped under APPLE, whose market cap sits at 3.54 trillion, about where NVidia was prior to the crash.

Considering Bank of America is only valued at about 350 billion (only right? LOL), and Lehman Brothers was valued at 111 billion when its collapse shook the entire world, you have to wonder with a company, (or actually a handful of companies) valued at 35 times larger in today’s market place, should anyone feel a sense of calm in the company of these financial behemoths?

Whether the market value of a company can actually cause a financial implosion should something happen to the valuation, the amounts in question would likely cause some upset somewhere. Just how much damage an event like that would cause however, remains to be seen. And my guess is we will probably see what happens at some point.

“Watching the markets so you don’t have to”

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(As mentioned please use the below disclaimer exactly) THANKS (Regulations)

Markets and Wildfires Update Jan 26 2025

The 2024 December jobs report came out last Friday and it showed an increase of 256,000 jobs following a 212,000 gain in November. Analysts expected 165,000 created jobs for December so saints be praised, the country seems robust!

Not so fast said Wall Street and the Dow subsequently shed a whopping 696 points on the day sending traders into the local bars at closing to gulp down a couple of double martinis to ease the pain of it all. So good economic news causes the market to crater?

How can that be you say?

Let me explain.

I miss the olden days. Back when sanity ruled Mr. Market, good economic news meant positive market movement. That was before the governmental money guys tried to harness the winds of supply and demand that drove the market in the direction it wanted to go.

Which is to say let it freely meander to and fro in response to a healthy and vibrant U.S. economy that was the envy of markets everywhere.

So the question becomes what happened since then where now good news on the economy causes the stock market to bleed red and bad news might cause a market rally?

What happened was the repeated interventions by the Federal Reserve (the FED) nearly every time the markets got a cold. So many times has the FED intervened, messed with, manipulated and basically tried to steer the market with monetary (money) injections, the knee jerk reaction by investors has now become what will the FED do in response to any economic news that comes out.

Bad news might cause the FED to juice the market by lowering interest rates, making credit easier, and bailing out a bank or two. Good economic news might cause the FED to do the opposite and tighten up on the money spigots causing markets to pull back.

Investors now seem more concerned with FED response to a positive or negative economic statistic than the actual health of the economy itself. What an odd investing world we now live in.

In other news, the Los Angeles fires no doubt will mean higher insurance rates for us homeowners.

Just last month, I penned an article discussing the solvency of the California Fair Plan insurance entity and how they might be, self-admittedly, one large fire away from insolvency. Well, the news is out the latest fires in Southern California might be the costliest insurance event in their history. I have seen social media chat suggesting Cal Fair is in shambles. I can say as a Cal Fair agent, they are still up and running and, at least now, seem no worse for wear. I have no way of knowing their current financial picture, but they continue to communicate and operations continue, at least from an agent’s point of view. In the article, I mentioned Cal Fair may have to instigate assessment charges on policies throughout the state to cover shortfalls. Much like a property tax bill where you get an invoice for a new road or what have you, a fire assessment would send you a bill out of the blue to help cover costs.

In the middle of the crisis, it’s difficult to tell how this will all wash out. But my guess is the Federal and or state governments along with the insurance companies will all have to contribute massive amounts of money to cover the costs of these fires. A bail out by somebody is in the cards.

A bail IN, where you and I will be asked to contribute is also a possibility.

In conclusion, whatever happens, if you thought insurance rates of all kinds were high now, it’s not rocket science to foresee even higher rates are in our future.

For now, let us offer our prayers and support for those victims and their families, our first responders and all those involved in bringing this horrid event to a close.

“Watching the markets so you don’t have to”

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