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Investment advice for Ron Paul
Rocky never provides investment advice. But for once he’ll violate this rule and offer some advice to Congressman Ron Paul.
Members of Congress must file financial disclosure forms which show all of their assets and investments. Rocky studied Rep. Paul’s portfolio from 2003 to the present.
http://www.legistorm.com/memberdisclosure/413/Rep_Ron_Paul_TX.html
Ron Paul’s portfolio violates every principle of sound money management. It is not prudent. It is not sensible. It is volatile. It is speculative. And it may give a window into Ron Paul’s perspective on the economy and free enterprise.
From 2003 to the present, Ron Paul’s stock portfolio owned only gold stocks. He owned some real estate. He had some cash. And he owned mutual funds that make money ONLY WHEN the stock market declines. He did not own any gold bullion. And more recently, he purchased more gold mining stocks and added to his bearish bets on the stock market using leveraged bearish funds.
In 2003, the value of his portfolio was between $860,000 and $2,300,00. (The disclosure form only provides a range of values.) In 2010, his portfolio grew to $2.4 million and $5.5 million. (Gold stocks have declined between 15% and 30% in 2011, so his portfolio has declined commensurately. He will declare that loss next year.)
So, over an an 8-year period his portfolio has appreciated by about 12%/year. (And after this year’s losses for gold mining stocks, it will be a bit less than that.)
Not so bad, eh?
Nope!
If, instead of being such a wiseguy, he had instead just purchased gold bullion, his return would have been 55% better — returning an impressive 18.5% per year! (It’s very strange that Ron Paul doesn’t own any bullion. And a skeptic might wonder whether he owns bullion, but failed to disclose it.)
[Disclosure: If one extrapolates the profile of his portfolio, one must conclude that he either nailed the bottom of the gold market, or he has really lousy long term performance. Remember that (even after this 10 year old rally) gold has appreciated at only about 5% for the past 30 years, while stocks have returned about 11%, and long bonds have returned high single digits. More troubling, however, is the notion that a President of the United States would personally profit from a DECLINING stock market and a declining economy! Even Barack Obama's assets include some S&P Index Funds....]
Rocky’s (latest) view on gold
Knowing that he’s been a gold bull for years, Rocky’s friends keep asking: “What you do think of gold, NOW?” (These people actually think that Rocky and certain other TV commentators can predict the future.)
Rocky’s answer: “I have no idea, and have NEVER had any idea about what the price of gold will do tomorrow.”
But does he still own gold?
“Yes, and I also own some stocks. And I own some real estate. And I own some bonds. And I own a copy of last week’s People Magazine. And I have no idea what the price of these will do tomorrow either. My experience has been that pundits who claim perfect knowledge of the future are generally either liars or idiots. (Whoopi Goldberg is the exception to this rule.) What I’m doing is called diversification.”
But when will he sell gold?
“The PRICE of gold is irrelevant. As I’ve written on this blog, I will sell gold when the gold story (or more accurately, the market’s perception of the gold story) changes! Gold’s ascent is a confluence of negative real interest rates; undisciplined central bank behavior; a growing loss of confidence in government policies and financial systems; loss of Swiss bank secrecy; an accumulation of economic wealth by individuals in parts of the world without stable property rights and rule of law. Can gold drop $100 tomorrow? Sure it can! Can gold drop $300 next week? Sure it can! Can gold drop $1000 next year? Sure it can! But so long as these FUNDAMENTAL factors remain in place, the underpinnings and demand for hard assets that are beyond the reach of governments will remain.”
“Almost all of my really smart friends are very bearish right now. They all think this move is idiotic. Many think this is a bubble. And eventually they will be right. But eventually could be a really really long time. And it could include a trip to unimaginably higher prices first. Their skepticism is not predictive of anything. And importantly, they are not betting that gold will decline either. All it tells you is that they aren’t long gold and missed this move. I’ll admit that I get nervous when prices rise quickly. And historically, buying after a sharp rally isn’t a good idea. But why should any of this market chatter affect my long-term porfolio construction/diversification? After all, I’m not afraid to admit that I have absolutely no idea what prices will do tomorrow.”
[Disclosure: Rocky NEVER gives investment advice. He's owned gold for a long time. And he owns some hedges that will protect him if gold drops sharply while he's asleep. And some day, he will sell his gold. But whether it's at $2,000/oz or $10,000/oz is out of his control. It's in the control of millions of other investors around the world, and how they react to the policies of their central banks and governments.]
CPI shows women & children first?
The Captain of the Titanic supposedly said, “Women and children first!” when directing his passengers to the lifeboats.
Rocky, (hardly a chivalrous fellow), thinks recent Consumer Price Index data demonstrate “Women and Children LAST!”
He notes that women’s and children’s apparel prices are declining at a noticeably faster rate than men’s apparel prices. (See the bottom three lines of the chart above.) Although Rocky continues to wear the same ragged grey sweater and chinos, Trophy Wife may find this data to be an impetus for a visit to the shopping mall.
Rocky theorizes that women can wear men’s clothes (which support the price of shirts and pants), whereas most men wouldn’t be caught dead wearing a dress or skirt. However, if this trend continues, Rocky’s miserly nature will prevail, and he’ll try on a kilt or two.
Reduce the deficit: sell the White House
Zillow.Com is a nice website that “values” properties across the country. But sometimes Zillow gets a little too cheeky.
Their “zestimate” for 1600 Pennsylvania Avenue is $251,617,000. For only a monthly mortgage of $1,036,276, you can enjoy 16 bedrooms and 35 baths in this 55,000 sq. foot mansion. (Built 1752). See:
http://www.zillow.com/homes/1600-pennsylvania-avenue-washington_rb/
Zillow says the White House market value declined 25 % since the peak of the housing boom. Hence Rocky believes it’s a great time for value-oriented condo-developers to swoop in. (“Great views, working fireplaces, bullet-proof windows, great yard for the kids and dogs….)
[Disclosure: Rocky continues to shop for a nice vacation home, but he hates DC's muggy summer weather.]
The Billion Price Project @ MIT : A real-time CPI
Inflation, says Rocky, are rising prices for the things that you WANT to buy. Deflation, says Rocky, are declining prices for the things that you DON’T WANT to buy.
Although it uses a more analytically rigorous definition, there are many problems with the government’s Consumer Price Index (CPI).
It’s exciting to announce that MIT has gone live with it’s “Billion Price Project” (BPP) — which monitors daily prices of 5 million items sold by 300 online retailers!
Here’s the link to the Billion Price Project:
http://bpp.mit.edu/
[Disclosure: It costs the Labor Department $234 million each year to calculate the CPI, and it's only reported once each month. For more details, see:
http://www.slate.com/id/2278623/
]
$7.2 Billion — This does not compute!
Mrs. Picower voluntarily agreed to return $7.2 Billion to the Madoff Trustee Recovery Fund. As one of the largest beneficiaries of the fraud, she made the correct moral choice — but what was her real motivation?
Rocky figured this out!
He discovered that Mrs. Picower’s copy of Quicken Personal Finance Software crashed.
Quicken cannot handle dollar amounts larger than $99,999,999.99. Hence the $7,200,000,000.00 sitting in Mrs. Picower’s account was causing her computer to crash!
Rather than rebooting the computer, she decided to boot the cash to the other victims. For technical details, see:
http://quicken.intuit.com/support/articles/using-quicken/reports-and-graphs/483.html
(The technical term is “maximum supported value.”)
[Disclosure: It's difficult to imagine a checking account balance of $7.2 Billion. It's even more shocking to realize that at 1% interest rates, she's accruing interest at $200,000 per day! It's worth noting that TurboTax does not list a "maximum supported value" so Internal Revenue Service Agents can relax...]
Don’t spend that penny all at once!
Real returns turn positive by one basis point.
When Rocky was a little kid, his miserly Uncle Scrooge would hand him a shiny penny, and intone, “Don’t spend it all at once!”
The mathematically-proficient, (but economically ignorant) child would reply, “But Uncle, how do I get change back from a penny?”
After a trip to negative 0.62%, the 5-year Inflation-Index Bond (“TIP”), closed yesterday at a whopping, positive, (drum roll please): 00.01% yield! That’s ONE BASIS POINT positive yield. Break out the champagne! Savers can now retire early! Not.
When Rocky lends money to the US Treasury, he likes to receive more money than he lends (after inflation). He’s excited that Uncle Sam will be handing him a shiny new penny!
[Disclosure: Rocky is less bearish on Treasuries. But he's not bullish on Treasuries. He also notes that his bond market strategy discussed in this post is working nicely at the moment.
http://onehonestman.wordpress.com/2010/11/22/less-exposure-same-return/
]
Less exposure, same return
The bottom green shows the 30yr/10yr yield curve steepness since 1980. It's a 3-sigma event.
For long-term investors with a dedicated portion of their portfolio in bonds, Rocky believes that there’s currently an opportunity to reduce exposure — without reducing return.
The “trick” is to extend maturities with a portion of their bonds, and to put the balance of their exposure in cash. This is called a bar-bell trade (named after the exercise equipment) — and the steepest yield curve in 30 years (see chart) provides a rare opportunity to do this trade.
Here’s an example of the mechanics.
An investor has $100,000 in the Vanguard Intermediate Term Investment Grade Bond Fund. This fund yields 3.1% and has an average duration of 5.3 years.
If the investor sells that fund, and buys $58,000 of the Vanguard Long Term Investment Grade Bond Fund which yields 5.4% with a duration of 12.9 years and puts the other $42,000 in FDIC insured money market funds yielding 1.0%, a number of virtuous things can happen:
1) If nothing happens, the cash yield of his portfolio has increased by a little bit. Before the re-allocation, his portfolio was producing $3100 in income, and now it’s producing $3500 in income.
2) The investor has increased his cash balance, and since no one really knows what the future will hold, it’s always good to have lots of cash. If interest rates rise , the investor will be able to put the cash to work at higher yields.
3) If interest rates rise, the yield curve is likely to flatten (based both on history and standard economic theory). That is, short-term rates ”should” rise more than long-term interest rates. So, even though the re-allocation results in a longer duration (7.48 versus 5.3), in most scenarios this risk is overstated. Also, the risk is lessened due to the 42% cash cushion. So the practical increase in duration should be less than the theoretical increase.
4) The investor has sold the portion of the bond market that is being levitated by the Federal Reserve and purchased a portion of the bond market which is being set by market forces. (Most of the Fed’s purchases are under 7 years in maturity.) So, when the Fed stops buying or reverses its purchases, the re-allocation should have less market risk in the short maturities that usually rise the most during tightening cycles.
5) With short rates at zero, there’s nowhere for rates to go except up. However, if the USA is in a Japanese-style depression, the only yields that can still decline are the ultra-long maturities, and one might experience a “bull market flattener”. (This is a low probability event.) Due to its modestly increased duration and position on the yield curve, the re-allocation would likely outperform nicely during a bull market flattener. Additionally, the stock market will be weak in this scenario, and the 48% cash balance might be useful for purchasing some stocks at much lower prices.
Where does this strategy look worse? If all interest rates across the yield curve move higher by the same amount , then the modestly increased duration can cause an underperformance, and if the yield curve steepens even more, there can be an underperformance. Remember: Rocky isn’t suggesting to just move out the yield curve with the same amount of money… It’s important to tuck about 48% of the portfolio away in safe money market funds . Remember also that when rates rise, bond prices decline. So if interest rates rise a lot, all bond investors will lose money. The underlying theme to this re-allocation is “less exposure — same return.”
[Disclosure: This is NOT investment advice...see the Disclaimer at the top of this page! It's just something that Rocky noticed and investors should think about. It's also an observation that the yield curve is steepest its been in 30+ years. If the 30-year bond keeps rising in yield -- and the Fed keeps rates at 0%, then this strategy will not be attractive. There's no reason to think that today marks the maximum steepness. Lastly, Rocky doesn't have an opinion about when rates will rise; but they eventually will. But as Keynes supposedly said, "In the long run, we're all dead." ]
Bubbles, bubbles, everywhere…
Google Hits on "Bubble"
Rocky noticed that his friends see bubbles in bonds, in gold, in stocks, in cotton, sugar and grain prices. In fact, his friends see bubbles EVERYWHERE!
It appears that there may be a bubble in bubbles. And a look at “Google Trends” confirms this bubble. However, this bubble-in-bubbles popped early in 2010 — on the 50th Anniversary of Bubble Wrap!
See:
http://www.washingtonpost.com/wp-dyn/content/video/2010/01/25/VI2010012500977.html
[Disclosure: Rocky never gives investment advice. When asked if or when the current "bubbles" will burst, he started foaming at the mouth.]
Gold-plated arbitrage
Rocky found some fool’s gold buried in today’s Producer Price Index data.
The year-over-year change in “Karat Gold Jewelry Prices” was 12.1% Whereas the year-over-year change in “Costume Jewelry Prices” was a modest 0.9%.
According to Wikipedia, “Costume jewelry (also called fashion jewelry, junk jewelry, fake jewelry, or fallalery) is jewelry manufactured as ornamentation to complement a particular fashionable costume or garment.”
Since the Government sees fit to include the “all important” costume jewelry price in the PPI, Rocky smells an arbitrage for an upcoming Trophy Wife birthday present.
Rocky currently owns gold in his investment portfolio, but this price discrepancy suggests that he should consider a “short gold / long fake gold” swap for Trophy Wife’s jewelry box portfolio.
[Disclosure: As they say on TV: "We're trained professionals. Don't try this yourselves at home!]
Gold: Manic Parabolic Blow Off Time
As regular readers know, Rocky has held a bullish speculative position in gold for many months. If today’s behavior continues for a few more days, Rocky believes that gold may be finally entering the Manic Parabolic Blow-Off Phase “MPBOP.”
The MPBOP is the most profitable phase of any bull market, and despite what experts on CNBC say, it’s impossible to know how long it will last — nor how high prices can go during the terminal stages of a MPBOP. Rocky speaks from experience having been on the wrong side of the internet MPBOP. (He was an avowed hater of the Pets.Com puppet, but he got revenge when the stock eventually went to zero.) This experience means Rocky wouldn’t scoff at $1500/oz or even $1800/oz gold by year-end.
Sadly, after the parabolic blow-off phase comes the “gravity still exists” phase, where people re-discover that gold is just a shiny piece of metal that makes an excellent dental crown. Which means prices will decline. By a lot.
Many people party on New Year’s Eve without worrying about how they feel on New Year’s Day. But not Rocky! Rocky remains long gold, but he’s beginning to think about his ultimate exit strategy. Parachutes? Ejection seats? Hari Kari? Here’s his latest thinking (posted on the blog Daily Speculations):
http://www.dailyspeculations.com/wordpress/?p=5344
[Disclosures: Rocky really has no clue what gold prices will do tomorrow or the days after tomorrow and his ruminations are not investment advice. He does, however, believe in the Laws of Gravity and the First Law of Rocky: In every “macro market” (indices, bonds, commodities), all prices WILL be seen at least twice. The only unknowns are: (1) how long it takes and (2) how far prices go, before the price is re-visited. Additionally, while Rocky currently remains long gold, he also owns hedges against the proven risk that he's more-than-occasionally wrong.]
No dis-inflation on Wall Street?
A spaghetti speculation scandal
While the US CFTC aim their regulatory cannons at crude oil speculators, their Italian cousins have their daggers out for “spaghetti speculators.”
Roberto Sambuco (aka “Mr. Price”), Italy’s so-called Guarantor of Price Surveillance launched a fresh investigation into manipulation of the dry spaghetti market. See:
http://www.google.com/hostednews/afp/article/ALeqM5ioX0WHXK0S5zq2_cm4sIs-Sos_PQ
“The price of pasta is a scandal and the result of speculation,” Bloomberg News quotes Italy’s National Farmers’ Association. Bloomberg says Italians eat an average 62 pounds of pasta each year.
Rocky has been known to “throw around his weight” in the crude oil market, but if the spaghetti scandal heats up and boils over, he’ll be forced to start watching his carbs.
He also added an Olive Oil (EVOO) / Marinara Sauce “spread” to both his Bloomberg monitor page and a loaf of Italian bread.
Lest the speculators and collusionists drive prices even higher, Rocky’s “Plan B” will be a switch from Linguine #7 to Capellini #9. Alternatively, he may purchase the Ronco Pasta Maker Kitchen Appliance. (As seen on TV.)
Is there a housing-like bubble in the spaghetti market?
No. But there’s bubbles aplenty in Rocky’s boiling pasta pot.
[Disclosure: From the Ronco Pasta Machine User Manual: "With a powerful yet quiet motor, this incredible machine also makes sausage, cookies, and small bagels." Trophy Wife notes that Rocky's fagottini already resembles a day-old bagel with cream cheese.]
The Federal Reserve and Elvis Presley
Homebuyers will face a new and important “development” in the next 90 days — and anyone thinking about buying a house (and even a bank CD) should pay attention:
As part of “Quantitative Easing,” the Fed purchased $1.02 TRILLION worth of “Agency MBS securities” (aka home mortgages) in the open market. The Fed will complete their purchases within the next 90 days. As the chart above shows, they will have purchased a total of $1.72 TRILLION of securities including $1.25 TRILLION home mortgages.
Putting this in perspective:
In 2009, home buyers borrowed a total of $1.01 Trillion. ( See:
http://www.sifma.org/research/pdf/Mortgage_Related_Issuance.pdf
for the data.)
The Fed has purchased EVERY new home loan made in 2009, and they pegged mortgage rates at an entirely arbitary yield !
Ladies and Gentlemen: The Federal Reserve has left the building!
Once the Fed steps back from the mortgage market, the “free” market will re-price home mortgage rates…presumably at higher yields. Rocky doesn’t know if the upward move in mortgage rates will be violent or gradual, but it will happen — and it will dwarf the effect of Congress’ homebuyer tax credits. It behooves homebuyers to bear this in mind when they consider when to lock in a mortgage rate.
[Disclosure: Rocky acknowledges that the one Elvis reference in this post was weak. So he'll add a second one: Elvis said, "The only thing worse than watching a bad movie is being in one."]
Getting married in India & the price of gold
The Central Bank of India announced this morning that they purchased 200 metric tonnes of gold from the International Monetary Fund. See:
http://www.imf.org/external/np/sec/pr/2009/pr09381.htm
This is ostensibly bullish for the price of gold. But is it bullish for Blue Nile stock? (NILE)
Rocky does the math:
1 Tonne = 32,151 Troy Ounces
1 Troy Ounce = 31.10 Grams
This fashionable Blue Nile wedding ring contains 1.6 grams of gold:
http://www.bluenile.com/wedding-ring-gold_6673
Rocky’s X-22 computer calculates that the Indian Central Bank just bought enough gold for “only” 125 MILLION wedding bands. Since the population of India is 1.1 BILLION, the Indian Central Bank is sensibly planning ahead.
[Disclosure: Rocky has been, is, and may continue to be, long gold bullion. But he may change his mind if he reads that scientists have finally succeeded in turning lead into gold.]
GM takes on Hertz & Avis with FREE cars
For really great Super Bowl parties, Rocky’s neighbor would ”buy” large-screen TV’s at Circuit City on Saturday, and then return the TV’s the following Monday morning for a full refund. No questions asked. No cost. (Except that Circuit City eventually went bankrupt.)
This morning, GM announced a similar no-questions-asked, 60 day full refund on its cars. The promotion is called “May the Best Car Win,” and GM Chairman Whiteacre coyly “declined to put a price tag on the overall promotion.” That’s probably a good thing, since US Taxpayers are paying for this.
Click here for the full story from the NY Times:
http://www.nytimes.com/2009/09/11/business/11gm.html
Forget about free toasters for opening new bank accounts. Forget about value meals at fast food restaurants. For consumers with a chunk of cash in their checking accounts, this is the largest giveaway in recent history. (An even better deal than “cash for clunkers.”)
Although the exact details have not been disclosed, here’s Rocky’s arbitrage analysis:
1. Money market funds are yielding approximately 0%, so there is no cost of money.
2. Buyers empty their savings accounts and purchase a new GM car. They pay cash.
3. Title and registration (non-refundable) will cost about $250. Sales tax will be refundable if the transaction constitutes a “return.”
4. After 60 days, the car gets returned to the dealer. (And GM has lost 10%-15% of the car’s value.)
A Hertz rental car for 60 days will cost about $3,000. A GM “rental car” for 60 days will cost about $250.
[Disclosure: Rocky has no position in Hertz Group (HTZ) or Avis Group (CAR). He does have a position as a citizen and taxpayer in the USA.]
A bonfire of two-by-fours
Goodbye: Gasoline. Hello: Lumber.
Rocky today bid adieu to the last of his position in the June gasoline crack spread. He entered the spread in January (click here) when gasoline prices were below the marginal cost of production (“a free lunch”). Since refineries are ineligible to receive TARP funds, they needed to produce less, raise prices, or go bankrupt. All three things happened, and his position returned an improbably successful unleveraged 765%.
(As a humble speculator, Rocky admits that he didn’t buy the exact low, or sell the exact high — and he admits that anyone who bought the exact low in Bank of America did nearly as well!)
Rocky now sees a similar situation unfolding in Lumber. Lumber currently trades at its lowest price in 25 years — below its marginal cost of production. The US and Canada are locked in a bitter tariff dispute, and Weyerhaeuser, among others, are closing mills and curtailing production. This interview with the CEO of the world’s largest lumber company summarizes Rocky’s view. (Rocky hopes this CEO’s clairvoyance is better than Ken Lewis’ at Bank of America.)
Rocky is confident that lumber prices will eventually rise…and perhaps double or triple from the lows. But he’s less confident about his timing and entry point because the recently shuttered lumber mills are dumping their excess inventory into the wholesale channel. Once this inventory clears (30 days or 300 days?), he expects prices to gap importantly higher — and because lumber has a tendency to gap violently, there probably won’t be a graceful entry point.
[Disclosure: Rocky NEVER gives investment advice, and he is frequently wrong on the price direction, the timing, or both. If Rocky is wrong on lumber, and oil prices continue to rise, he'll replace the oil furnace in his home with a wood stove -- and will heat his house next winter by burning two-by-fours.]
Here’s a 25 year picture of lumber prices:
Lumber prices since 1986
Mastercard, moths and a sore butt
The right rear pockets of Rocky’s trousers always wear out quickly. Since wool-eating moths cannot tell left-from-right, the explanation is “friction” from Rocky’s over-sized wallet. [For a thoughtful discussion of "market friction" or "vig," visit Jeff Watson's excellent post at DailySpeculations.com.]
It’s not cash that stuffs Rocky’s wallet. It’s the numerous “cash rebate” credit cards. There’s a card that gets 5% back on gasoline. Another gets 5% back at drugstores. A third gets 5% back at grocery stores. A fourth gets 5% back at the Home Depot. He even carries a discount card for McDonald’s which Trophy Wife gave him for his birthday. (Rocky always pays his bills in full at the end of each month, and “pockets” the 5% in cash rebates.)
Rocky shamelessly acknowledges that he’s an arbitrageur 24/7, and even Trophy Wife joins in this orgy of merchant arbitrage. (However, Trophy Wife carries a large purse, hence the “friction” of her specialized card use is less).
This morning Mastercard (MA) reported disappointing sales, and the stock got whacked by 10%. It’s easy to blame the recession, but Rocky has an alternate theory:
He’s noticed more merchants (and especially gas stations) posting a “cash” price and a “credit” price. Depending on the cash discount, it may be cheaper to use cash than even a 5% credit card. If this trend persists and grows, it may pose serious problems for Mastercard and Visa.
[Disclosure: Rocky has no position in Mastercard or Visa stock, but he's noticed a recurring soreness in his butt. If the aforementioned trend continues, he'll jettison the credit cards and buy a bill fold.]
Inflation and Growth: The data don’t lie
This morning’s GDP data had dismal negative AND positive numbers. The dismal negative number was -6.1% real growth. The dismal positive number was 2.9% inflation.
This table [click here] illustrates the phenomenon. The top line of numbers is inflation. The bottom line of numbers is growth. Inflation continues to dwarf real growth.
Rocky’s conclusion: Printing money creates inflation not growth. The Fed’s current trajectory will ensure a dangerously high inflation rate once the economy heals (whenever that occurs). US Postage Forever Stamps, TIPS, commodities and other investments that protect real purchasing power continue to be an essential part of any portfolio.
S&P-500 Target: ZERO on 11/1/09
S&P500: Extrapolating the trend
The above chart is clear and succinct. If the current trend continues, the S&P-500 will trade at ZERO on November 1, 2009.
Rocky calculates that a disciplined investor who put $100 into the Vanguard S&P-500 fund every month for the past twenty years, now has a negative return on his entire investment (including dividends). This is a stark measure of the severity of this bear market, and it obviously shakes the confidence of many folks who responsibly “dollar-cost-average.”
Rocky (who believes in long-term-reversion-to-the-mean) finds this information to be bullish for the next 10 to 20 years. Folks who extrapolate perpetual losses today are repeating the same mistake as folks who extrapolated 15% annual compounded gains in the 1990′s.
Rocky continues to contently nibble at stocks. If the stock market reaches zero on November 1st, Rocky will happily own 100% of the US stock market. Noone knows whether the S&P will actually reach zero — but if it does, Rocky will savor firing the irresponsible CEO’s — who like Slim Pickens in Dr. Strangelove rode their companies into oblivion. (As Major Kong’s navigator says, “The Target is in sight.”)
