The Evergreen Portfolio E-Book

Martin Truax

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 488

Veröffentlichungsjahr: 2010

Beschreibung

A practical system for growing and protecting wealth in today's volatile markets Martin Truax and Ron Miller are financial professionals, who unlike others in this field, have made money in today's volatile market. While stock markets have been down fifty percent, they've managed to be up seventy percent. This book clearly explains the highly successful portfolio management system used by the authors to protect their clients' wealth as well as garner substantial gains-by participating in profitable market opportunities when they occur. Divided into several informative and engaging sections, The Evergreen Portfolio reveals how you can use hedges to protect the long portion of your portfolio when the market starts to go down. It covers the tactical and technical methodologies needed to protect and grow your assets at a time when many investors are getting wiped out. * Discusses the keys to succeeding in today's market, including the best ways to invest in gold, diversify with foreign currency, and much more * Contains insights from top minds in the market such as Mark Skousen and Bob Precther * Offers an effective solution to the investment and retirement problems we all now face Written with the serious investor in mind, The Evergreen Portfolio reveals one of the best ways to protect and grow your money in a turbulent financial environment.

Leseprobe

Table of Contents

Title Page

Copyright Page

Preface

CHAPTER 1 - The Evergreen Portfolio

The Long Cycle

Our Future

Asset Placement

Reality

What Can We Do?

Back to Reality

The Investment Plan

CHAPTER 2 - How Did We Get into This Mess? And What Is the Best Way Out?

Question 1: How Did We Get into This Mess?

Question 2: Where Are We Now in the Recovery Cycle?

Question 3: What Is Your Favorite Solution to This Problem?

Question 4: What Is Your Long-Term Outlook for the Market?

Question 5: How Should We Invest in This Environment?

CHAPTER 3 - Know the Signs of the Times

Adam Smith’s Ideal Model

The Return of Depressing Keynesian Economics

The Big Three in Economics

Is the Global Economy Depression Proof or Accident Prone?

Is the Dollar Going to Collapse?

When the Rich Get Poorer, Look Out Below

Investment Strategy in Uncertain Times: Know the Signs of the Times

Ending On a Positive Note

CHAPTER 4 - How Fed Policy Fuels Market Cycles

The Birth of the Modern Federal Financial System

The Five 17-Year Bull and Bear Markets since the Birth of the Fed

What Caused the Mega-Crash of 2008? Fed Panic, Credit Fantasies, and “Guns and ...

Housing: America’s Most Speculative Asset Class?

Conclusion: The Next Move Is Up to the Fed, Congress, and Voters (Like You and Me)

CHAPTER 5 - Investing and Hedging Strategies for a Topsy-Turvy Financial World

Wall Street “Myths”

“Investment Eras” Are Important Influences on Market Behavior

Flexible Portfolio Method versus Modern Portfolio Theory

Strategic Asset Allocations for the Times—Prepare for Boom, Bust, or Muddling Through

Equity Income Investing—the Preferred Core Holding

Hedging Tactics for Portfolio Risk Management

Simple or Complex Technical Analysis—Your Choice

America’s New Role in the Shrinking World

CHAPTER 6 - Conquer the Crash, Condensed

A Myth Exposed

Economic Deterioration During the Final Decade of Wave V

What Are the Signs of a Topping Stock Market?

Historically Optimistic Psychology

When Does Deflation Occur?

Making Preparations and Taking Action

CHAPTER 7 - The Gone Fishin’ Portfolio

The Unvarnished Truth About Your Money

The Road to Financial Freedom

Your Single Most Important Investment Decision

The Gone Fishin’ Portfolio Unveiled

The Proof Is In the Pudding

CHAPTER 8 - How You Can Profit from Chaostan

Geopolitical Threats (from the April 2009 Early Warning Report )

East Europe—the Baltics (from the May 2009 Early Warning Report)

Piracy (from the February 1998 Early Warning Report )

Persian Gulf (from the January 2007 Early Warning Report )

The Coming War with China (from the June 2000 Early Warning Report )

If You are a Speculator (from the April 2009 Early Warning Report)

Closing Thoughts

CHAPTER 9 - The New Global Investing Strategy

American Superiority

Reasons to Internationalize

The Global Approach

Where to Find Bargains

The Balance of Power Shifts East and South

The Decline in the Dollar

Growth from Emerging Countries

Ways to Invest Internationally

CHAPTER 10 - High-Yield Investing in the Shadow of the Big W

Recovery or Relapse

In the Sectors

CHAPTER 11 - The Case for Growth

The Growth Shift

The End of Easy Oil

An End to Easy Oil

CHAPTER 12 - Gold Facts

Gold Facts

Mining and Production

Analysis for Gold, Associated Scams, and Quality Control

Gold as Money and a Measure of Wealth

Outlook for the Gold Mining Industry

CHAPTER 13 - The Rare Coin Market

How to Participate in the Rare Coin Market

Specific Coin Recommendations

What Not to Buy

Two Final Very Important Tips

CHAPTER 14 - Other Currencies versus the Dollar

Currency Investing: Adding an Asset Class with Global Clout

Diversification

How to View Currencies

Which Currencies Should We Consider for the Long Run Now?

The Future of Currencies

CHAPTER 15 - The 2010 Estate Tax Law: Here to Stay or Going Away?

Asset Titling

Formula Clauses in Wills

Gifting

Summary

Epilogue

About the Authors

About the Contributors

Index

Copyright © 2010 by Martin Truax and Ronald Miller. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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Library of Congress Cataloging-in-Publication Data:

Truax, Martin.

The evergreen portfolio: timeless strategies to survive and prosper from investing pros / Martin Truax, Ron Miller.

p. cm.

Includes index.

ISBN 978-0-470-56008-2 (hardback); 978-0-470-89026-4 (ebk); 978-0-470-89027-1 (ebk); 978-0-470-89028-8 (ebk)

1. Investments. 2. Hedge funds. 3. Finance, Personal. I. Miller, Ronald E. II. Title.

HG4521.T694 2010

332.6–dc22

2010018284

Preface

For the past 20-plus years, a group of individual investors, advisors, and writers has been gathering together in the spring for a tradition of exchange of investment outlooks and ideas. Starting in Atlanta, the meeting moved midway to the North Georgia Mountains to a private estate known as Chota Falls. Thus, what started as the Atlanta Investment Conference began to transition into the Chota Forum, where the number of speakers stayed about the same but the size of the audience became more limited. One of the advantages of this revised forum size was the greater ease of one-on-one exchange and interaction.

Over the years, the “elves” from Louis Rukeyser’s Wall Street Week, national political representatives including the former Speaker of the House, Hon. Newt Gingrich, major brokerage firm analysts, investment newsletter writers, and business executives (future billionaires included)—have participated as speakers and presenters. Although not everyone saw the future the same, they gave our attendees a heads-up about what was happening in our country and the world, and an opportunity to perhaps position their investments more advantageously.

At the Chota Forum in the spring of 2009, the speakers were individually interviewed by the Master of Ceremonies after their specific presentations. In each taped interview, Gary Alexander asked them five specific questions:

1. How did we get in this mess?

2. What will the recovery cycle be like?

3. What is your suggested solution to the problems?

4. What is your longer term outlook?

5. How should one invest in this environment?

As you will read in Chapter 2, those speakers participating in that year’s personal interviews were:

• Bob Barr, former Congressman and Libertarian Party presidential candidate

• Robert Bishop, longtime editor of Gold Mining Stock Report

• Roger Conrad, editor, Utility Forecaster and Canadian Edge

• Adrian Day, CEO, Adrian Day Asset Management

• Neil George, former editor, Personal Finance

• Elliott Gue, editor, Personal Finance and associate editor, Energy Strategist

• Dr. Alan Keyes, former Republican presidential candidate

• Ian McAvity, editor, Deliberations

• Rick Rule, CEO, Global Resources Investments Inc.

• Ben Sheperd, editor, Louis Rukeyser’s Mutual Funds

• Mark Skousen, editor, Forecasts & Strategies

• Frank Trotter, president, Everbank.

Soon after the 2009 Conference, we were contacted by publisher John Wiley & Sons about putting these thoughts into book form. Many of the presenters agreed to put more extensive thought and advice into a single chapter for this combined contribution project.

When informed of it, other financial experts agreed to join this project. Robert Prechter and Alexander Green, editor of the Oxford Club, quickly agreed to add their thoughts. In addition, U.S. & World Early Warning Report’s editor, Richard Maybury, gold guru Duane Poliquin, rare-coin experts Van Simmons and David Hall, and estate planning attorney Gary Kashdan agreed to contribute.

The Friends for Autism Foundation, Inc., has been the organizer and beneficiary of the 20-year conference event.1 It will also be the recipient of the royalties of this book. Over the years, all of the speakers have contributed their time, and in most cases, their expenses of being at the conference, in order to help the cause of autism. When the event was first organized in 1987, it was estimated that 1 in 10,000 were affected by this condition. Now the Centers for Disease Control and Prevention (CDC) estimate this number at 1 in 105 (1 in 70 for boys). The Friends for Autism Foundation appreciates the generosity of all the forum speakers and attendees over the years. The Atlanta Investment Conference/Chota Forum has raised substantial sums for the cause. These funds have contributed to an autism center at Emory University Medical School in Atlanta, and toward model schools and training programs. Again, we thank all those who have made this and other efforts benefiting this cause both meaningful and worthwhile.

What you are about to read contains the condensed wisdom of more than 15 seasoned investment pros in a very unique gathering of contributions never before brought together in written form. We believe you will find it a most valuable and useful guide in helping you build the tools necessary to successfully invest and profit even in the most tumultuous times. In compiling these selections, our goal is to help you meet your financial challenges with more of your assets intact and with an appreciation and a better understanding of what is happening, and most importantly, of how to prepare and adjust accordingly.

With our best wishes and expectations, Martin Truax, Conference Co-Chairman

CHAPTER 1

The Evergreen Portfolio

THE BIG PICTURE

Martin Truax

Our planet had a close call with financial fate in the fall of 2008. The dominoes began to fall as nontransparent hedge funds rejected redemption requests and aggressively yielding money funds were about to do the same. As investors’ emotions switched from greed to fear, a classic run on the alternative and shadow banking system began. Some of the most savvy were transferring bank balances to Treasuries only. Complacency had suddenly become concern, and capitulation soon followed. We had a financial panic, the worst in 70-some years. The banking system froze and deleveraging ensued, bringing on a deflationary adjustment in almost all classes of global assets, with the exception of the highest quality of liquidity.

Government financial intervention became the most aggressive in modern times. Liquidity, low interest rates, purchases of doubtful debt, cash to consumers, incentives to buy cars and homes, anything that might slow the speed of the falling dominoes was attempted. Less bad was soon seen as better than more bad. Liquidity went mostly into the financial markets, into stocks and all levels of bonds, from the government’s short-term debt to corporate junk paper. With direct correlation, most of the global financial markets had a significant rebound. The intervention appeared to be successful for the time being.

Now we have what many are describing as a new normal. It’s become a different world with higher unemployment, excess manufacturing and housing capacity, and difficult-to-obtain credit. Consumers hesitate to buy beyond the necessities. Their hopeful expectations for the prime collateral of the world, real estate, are forced to be adjusted. Buyers look for bargains and wait until prices are actually further reduced. It’s a classic deflationary scenario that ushers in a self-feeding deflationary trend.

The Long Cycle

Extending over the life expectation of the average adult, the long-term economic/financial cycle repeats about every 70 to 80 years. Our human errors are revisited as memories formed by experience fade away. The financial lessons of history are forgotten. Beginning the long cycle, from a conservative mindset of debt avoidance, debt steadily is sought and extended until it becomes unmanageable. In the first decade of the new millennium, we arrived at the unmanageable level again. We have employed debt instruments created by financial engineers that are so convoluted that even the engineers aren’t sure what, where, or how much exists. Rules put in place some 70 years ago to prevent recurrences of past mistakes were changed and abandoned. Gone were the Glass-Steagall Act, which separated commercial banking from investment banking; the stock lending rule for shorting; and the uptick rule. Gone, too, were the more conservative bank leverage caps, and the regulation on the largest financial markets—derivatives. These safeguards were all abandoned or ignored to allow to once again overwhelm the system. And the system broke. Can it be put back together once again?