This'n'That; May 21st[OneWorld;Orman]

Does It Matter? The KoolAid Media is all giddy about the recently proposed stringent auto standards! This seems to replace or is in conjunction with the "global warming" hoax. Both of these can be added to the housing crisis, banking crisis, economic crisis, credit card crisis, cap-and-trade crisis and whatever other crises the Fluffy obama handlers can invent to keep the public on "the edge of their seats" awaiting a government fix to all their problems. BUT, What Does It Matter?? All this consternation is for naught unless the rest of the industrialized world inacts similar legislation, policies and practices. Socialist America can force legislation and policies to eradicate greenhouse gases, give every resident a house, nationalize the banking system, use statist policies to control the economy and personal credit, blah, blah, blah; IT WILL DO NO GOOD unless the rest of the planet acts in concert!! Industrialized Europe has had many of these policies for years.... to what end? The pollution from the rest of the world just drifts around, allegedly causing havoc while the Europeans have altered their lifestyles to not one jot of good!! I can not believe that Fluffy obama thinks he can control the political or social actions of the Chinese or the Indians!! China, India and countries of the former Soviet Union have the largest populations on the planet and they'll continue doing what they've always done-NOTHING with regard to the planet itself! As an example-Ya know all those "high-fallutin' " teas the "high-brows" buy from China? Ya got any idea of how they're dried and crushed? The tea leaves are picked by peasants for slave wages; they're dumped on a warehouse concrete floor; they're DRIVEN OVER by lead and carbon spewing crappy cars-the same cars driven that morning over dirt roads, through cowshit on their way to work!! Makes for some healthy tea, aye? Until the socialist democRATs and the "do-nothing" republicans are driven from the Congress and statehouses nationwide, we'll just have to play along as "Fluffy-America" joins the European Union in their lock-step over the horizon into one-world government!!

Investors Be Concerned!!

[Many know Suze Orman as the TV financial guru, following her investment advice over the years. I found this interview at http://www.findadvice.com/ . I've cut it severely-just the basics:] Among her fans is Merriman financial advisor Cheryl Curran, who nevertheless believes Orman’s investment advice should not be followed. In the still heavily-male-dominated financial industry, I have been especially pleased to see a woman’s advice accepted and taken seriously by people of all ages and in all stages of life, regardless of whether they have a lot of wealth or only a little. However, I think investors need to be wary of the information and advice she dispenses – and the example she sets. A plus; when markets are down, Suze encourages people to continue adding to their retirement funds, even when it doesn’t feel comfortable. In easy-to-follow language, she shows how to make a written plan to pay off debts. As virtually everybody in the financial services business knows, people who follow written plans are much more likely to be successful than those who don’t.

Suze has made some bad investment calls, especially in the past 18 months, and I don’t know why. Perhaps she is under pressure to become a guru. Or it’s possible that, like many people, she isn’t always able to muster the wisdom, courage and discipline to stick to her own stated beliefs. Suze used to advocate buying and holding only index funds. Then in June 2008, she was interviewed by Eric Schurenberg, who was then a “Money” magazine editor.

Suze told Schurenberg that even though all the evidence indicated index funds outperform 80 percent of managed funds, “Today I think you have to be more active.” She recommended exchange-traded funds specializing in emerging markets, U.S. oil and metals & mining. And what happened to investors who took those recommendations? From the time of her interview in June 2008, these sectors went down 44 percent, 71 percent and 71 percent respectively, through the end of the year. Vanguard 500 Index and Total Stock Market Index, dropped 28 percent and 29 percent, respectively, in that same time frame.

In the same interview, Suze said: “You should invest in bonds only when interest rates are going down.” Now that is a very interesting piece of advice, on a par with “Invest only in stocks that are making money.” I am surprised that a journalist as supposedly savvy as Schurenberg let that comment slip by without any follow-up, as if it were the most natural point of view in the world. She must mean that the only valid reason to own bonds is to buy them at a low price and sell them at a higher price. (As you probably know, bond prices generally rise when interest rates fall.) Investing this way is legitimate if that’s what you are after and if (this is a very big if) you have some system for knowing when to buy and when to sell. Millions of investors own bonds with an entirely different objective: to stabilize a portfolio that also contains equities. By allocating a portion of your portfolio to short and intermediate term bonds, you have a built-in brake system designed to offset some of the losses experienced in a typical bear market. In fact, with periodic rebalancing, investors should buy more bonds when their prices are relatively low. Suze is way off the mark in her recommended allocations between equities and fixed income (including bonds). Her recommendations are so conservative that I fear they could lead many investors to fall far short of their goals or even run out of money after they retire. Suze has stated publicly that less than 4 percent of her liquid net worth is in the stock market.

Suze has a huge income from being a successful author and entertainer. She can easily obtain plenty of spending money for the rest of her life by investing heavily in zero-coupon municipal bonds. But I have to wonder how closely she is in touch with the needs of real-world investors who have limited resources.

Suze’s investment advice has not been good. It does not seem to be based on a good grasp of some important and fundamental concepts. My advice to her viewers, listeners and readers is twofold. Appreciate and learn from her “plain English” explanations of financial products and subjects. But don’t follow her investment recommendations and advice.

Til Nex'Time....