2006 December archive at Breaking the Shackles of the 9 to 5

Archive for June, 2007

Week in Review 12/29 - Gold Ends Down Month on Up Note

Published December 30th, 2006 in Portfolio - Updates (all). 0 Comments

Gold finished the week up 2.5% paring losses for the month to -2.3%. For gold as well as with other commodities, it was a story of 2 halves. The first half of the year started off with a bang. As gold, measured in terms of its ETF GLD, was up 18.71%. However, it could only squeeze out a gain of 3.23% in the second half. BHP Billiton, the largest mining company in the world, an excellent barometer for commodities in general told the same story. It was up 28.87% in the first half and down 7.71% in the second half. Oil followed the same first half - second half story. However, it’s second half was so weak that it wiped out all of its gains from the first half. Oil end the year one penny higher than it started the year. So, what was the benefactor of money moving out of commodities - none other than the large cap stocks of the DOW. The DOW added 11.78% in the second half; to its first half gains of 4.04%.

So, what does 2007 have in store for us? I am not sure, but I am sticking with what is working for me. That is commodities and emerging markets.

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Building Wealth One BRIC at a Time: 2006 Results & Plans for 2007

Published December 30th, 2006 in Portfolio - Updates (all). 10 Comments

Using a Goldman Sacks 2003 research paper “Dreaming with BRICs: the Path to 2050″ as a primary source, on July 3, I penned an article “Investing: How to Make Money on the Industrialization of Brazil, Russia, India and China.” It espoused why Brazil, Russia, India and China will rank among the world’s most dominant economies by mid-Century. As these countries industrialize, a tremendous demand for necessities of industrial life such as housing with indoor plumbing, electricity, basic appliances and cars will be created.

To capitalize on this trend, I suggested a direct and indirect investment approach. How did these approaches pan out? If you have been following the “Week in Review” articles - you know that both methods had phenomenal years. If you purchased both portfolios at the open on the morning after I published the article - you have been rewarded with gains of 21.83% (direct) and 8.35% (indirect) versus 10.93% for the S&P 500. For the year, the direct and indirect methods returned 49.2% and 41.2% respectively.

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Real Money Portfolio - Update 12/30

Published December 30th, 2006 in Portfolio - Real Money and Portfolio - Updates (all). 0 Comments

This thread tracks real trades in one of my portfolios. Refer to backgrounder for more info.

Although, I was tempted to add CEF on Thursday and Friday - no trades were made this week. I will enter the new year with 50% of the portfolio sitting in cash. I was quite pleased to outperform the S&P 500 over the tracking period and look forward to more of the same in 2007.

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2007 Year of the Golden Piggy Bank

Published December 30th, 2006 in Investing - Metals. 3 Comments

In my article, “Wealth Building Thru Gold Investing - It is All About Supply and Demand” I stated that Asians have a strong affinity for gold and as Asian investors become wealthier their ownership of gold will increase. The sheer number of potential Asian investors buying small amounts of gold will create an unprecedented demand driving the price of gold higher. The following provides additional support for my position.

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Wealth Building Thru Gold Investing - It is All About Supply and Demand

Published December 24th, 2006 in Investing - Metals and Absolute Must Reads. 6 Comments

I took me a good year and a half to get back into the groove after the pounding I took during the internet implosion of 2000. That was an extremely painful year and I was in no hurry to donate more money to Wall Street. I tried a few of the same old things from 2000 in early 2002 with little success. By late 2002, I discovered Adam Hamilton and the world of commodity stock investing.

Since I worked in high tech, I had seen first hand how tons of money was plowed into anything internet related. Engineers with Power Point presentations had gotten millions of dollars in venture capital money, while capital intensive areas such as mining were ignored. The payback on an internet investment was infinitely shorter than an investment in mining. Mining companies had to find deposits, mine and then sell it. There were environmental and political issues to overcome as well as potential labor problems. With virtually no investments going into mining, it made sense that commodity prices were in the dump.

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Week in Review 12/22 - Chasing Dividends

Published December 23rd, 2006 in Portfolio - Updates (all). 0 Comments

BRIC was clearly the star amongst our portfolios this week. BRIC is composed of 4 ETFs representing the countries of Brazil, Russia, India and China. The Templeton Russia and East European (TRF) led the charge closing up 10.4% for the week as investors chase what amounts to be a 10% dividend.

FORT LAUDERDALE, Fla., Dec 14, 2006 (BUSINESS WIRE) — Templeton Russia and East European (TRF) today announced a year-end distribution comprised of net investment income of $0.9445 per share, long-term capital gains distribution of $7.5995 per share and short-term capital gains distribution of $0.3049, payable on January 16, 2007 to shareholders of record on December 29, 2006 (Ex-Dividend Date: December 27, 2006).

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Real Money Portfolio - Update 12/23

Published December 23rd, 2006 in Portfolio - Real Money and Portfolio - Updates (all). 0 Comments

This thread tracks real trades in one of my portfolios. Refer to backgrounder for more info.

As I stated last weekend, GDX was wobbling. Its wobbling continued on Monday and I sold it at the close. XLE followed GDX’s lead lower and I sold it as well bringing the portfolio back up to 60% cash.

GDX sucked me back in on Tuesday by rising 2.8% on above average volume and I allocated 30% to the trade. It promptly went back into wobbling mode and I made a partial sell on Friday.

Despite the whipsaws I am only trailing the S&P 500 by 0.5% since the beginning of the tracking period. Including the open positions - it’s a dead heat. Let’s see what the next week brings. I am sitting on 50% cash.

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Metals & Minerals Expected to Outperform in 2007

Published December 21st, 2006 in Investing - Metals. 0 Comments

Spend some time surfing these pages and you will find many ways to profit from metals and minerals in the upcoming year.

Source: Scotiabank

Nickel was the top performing commodity in 2006, climbing an extraordinary 159 per cent over the past year. Recent news that Australia’s Ravensthorpe mine will not come on stream until 2008, instead of second half 2007, and that Inco/CVRD’s Goro mine will be delayed until late 2008, has raised concern over supplies, in an environment of strong global demand growth. World stainless steel production advanced by 12 per cent in 2006, boosted by robust demand for oil drilling equipment, electric power expansion and booming aircraft orders. A ’super-cycle’ is expected in nickel, with prices staying strong through 2008.

Uranium was the third-best performing commodity in 2006 and will likely be the top performer in 2007. “Uranium and zinc are our top ‘picks’ for investors in 2007, with precious metals, especially silver, also expected to benefit from further weakness in the U.S. dollar,” says Patricia Mohr, Vice-President and commodity market specialist, Scotia Economics. “Potash fertilizer should yield good gains for investors. Wheat, barley and canola should also perform quite well relative to past experience, linked to new demand for ethanol additives in gasoline and biodiesel, although metals & minerals are expected to retain their leadership position.”

John T. Reed’s Views of Various Real Estate Investment Gurus

Published December 21st, 2006 in Real Estate. 3 Comments

You wake up in the middle of the night - unable to fall back to sleep, so you start flipping through the channels. Undoubtedly, you will come across a station - where a nicely dressed person in an exotic location is telling how rich he or she became selling real estate. Then you hear testimony after testimony from people stating how they too became rich by following the gurus advice. Depending on how your day was at work - you start contemplating calling and giving it a shot. I remember in the late 80’s, I almost signed up for Robert Allen’s no-money down seminar. However, a friend who had attended it in the past talked me out of it. He saved me a few bucks, because then - like now real estate was in a recession.

John T. Reed reviews all of gurus past and present including Robert Allen, Wade Cook, Robert Kiyosaki, Carleton Sheets, Donald Trump and many more.

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Time & Money Group Published on Financial Sense Online

Published December 20th, 2006 in Time & Money News. 0 Comments

Make sure to read my latest article “Mr. Government Will You Keep Your Cotton-Picking Hands Out of the Market: I am Trying to Make a Buck.“

This article was published on Financial Sense Online one of the most popular financial web sites on the internet. I listen to their webcast every week-end without fail. It has some of the best non-mainstream commentary anywhere.

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