Thursday, July 11, 2019

My Portfolio “Update”

I sold my GIS, KHC and HAS and replaced them with smaller positions in LEG and BRK.B, basically to replace them with a Dividend Aristocrat paying 4.2% and BRK.B, which I look at as a synthetic dividend stock, figuring it can do better with its cash, about $115B, than I can.

My portfolio, from largest to smallest position.....

PG (Procter & Gamble)
PEP (PepsiCo)
GPC (Genuine Parts Company)
IBM (International Business Machines)
VZ (Verizon)
WBA (Walgreen Boots Alliance)
ADP (Automatic Data Processing)
T (AT&T)
KO (Coca Cola)
MMM (3M)
KMB (Kimberly Clark)
M (Macy’s)
HPQ (Hewlett-Packard)
SYY (Sysco)
K (Kellogg)
XOM (Exxon Mobil)
LEG (Leggett & Platt)
BRK.B (Berkshire Hathaway)

GNMA (6% Bonds)

Saturday, April 20, 2019

My Portfolio “Update”

I sold my GIS. The portfolio, from largest holding to smallest....

PG (Procter & Gamble)
PEP (PepsiCo)
GPC (Genuine Parts Company)
IBM (International Business Machines)
MMM (3M)
VZ (Verizon)
WBA (Walgreen Boots Alliance)
ADP (Automatic Data Processing)
T (AT&T)
KO (Coca Cola)
M (Macy’s)
KMB (Kimberly Clark)
HAS (Hasbro)
SYY (Sysco)
KHC (Kraft Heinz)
HPQ (Hewlett-Packard)
K (Kellogg)
XOM (Exxon Mobil)
GNMA (6% Bonds)

Wednesday, February 13, 2019

My Portfolio “Update”

With the recent market correction, I made some changes and additions to mu portfolio, now, from largest position to smallest and now 33% of my assets....

PG (Procter & Gamble)
PEP (PepsiCo)
WBA (Walgreen Boots Alliance)
GPC (Genuine Parts Company)
IBM (International Business Machines)
MMM (3M)
VZ (Verizon)
ADP (Automatic Data Processing)
GIS (General Mills)
T (AT&T)
KO (Coca Cola)
KMB (Kimberly Clark)
HAS (Hasbro)
M (Macy’s)
KHC (Kraft Heinz)
HPQ (Hewlett-Packard)
SYY (Sysco)
K (Kellogg)
XOM (Exxon Mobil)
GNMA (6% Bonds)


Saturday, August 18, 2018

Portfolio “Update”

I sold my NWL....and took a small position in GOOGL, small because it pays no dividend. I just want great, iconic companies in my portfolio, as I am now in a total hold mode, now with stocks, as I see there is too much worldwide debt. So, I won’t be buying more stock until the next big market drop.

My portfolio, from largest to smallest holdings....

PEP (PepsiCo)
PG (Procter & Gamble)
WBA (Walgreen Boots Alliance)
GPC (Genuine Parts Company)
IBM (International Business Machines)
MMM (3M)
VZ (Verizon)
T (AT&T)
ADP (Automatic Data Processing)
GIS (General Mills)
KO (Coca Cola)
KMB (Kimberly Clark)
HAS (Hasbro)
M (Macy’s)
SYY (Sysco)
HPQ (Hewlett-Packard)
K (Kellogg)
GOOGL (Alphabet)
GNMA (6% Bonds)



This portfolio represents about 30% of my assets, about 15% is a home mortgage, about 2% precious metals and collectibles, and the rest are CDs.

Sunday, April 08, 2018

My Review of “Necessary Evil”

3 out of 5 stars....

First off, I have a problem with the author David Kinley, calling finance an evil. Sure, as the author describes, human rights are too often the casualty, but, as have been said by many others, the arrow of history points forward. Specifically, world poverty has been minimized coincidental with finance, so, likely because of finance; human beings run finance and are neurologically wired overwhelmingly for justice.

That being said, I agree with the author that more can be done to further human rights, like with better regulation and redistribution, and the book does offer many ways to do this.

Throughout history, the wealthy always have had advantages, however excessive wealth doesn’t always bring happiness. There, the author seems to ignore.

Anyway, I do recommend the book because finance is an important topic, especially since the Great Recession, and income inequality is perhaps the biggest casualty of the recovery.

Sunday, March 04, 2018

My Review of “It’s Better Than It Looks”

4 out of 5 stars....

What first attracted me to this book by Gregg Easterbrook, is the testimonial by Walter Isaacson, since I respect his journalism.

The book is a persuasive look at how, despite the dystopian look at America as presented by the 2016 campaign of the new president, things are actually not just pretty good, but are quite an advancement from the past for most, as the author states the arrow of history always points up. And as with all societal advancements, come disruptions to many who either can’t or won’t adapt to the changes, and government is slow to provide help to those disadvantaged by the progress.

Though the progress might be hard to see by many in the US or Europe, the middle class is shrinking because most leaving are moving up, and since 1990, extreme world poverty has declined from 37% to 10%.. Sure, reform is needed along with the changes, and the author addresses the possible reforms needed while also pointing out how the disadvantaged can currently adapt. The author goes into tackling the following.

Are we starving? No, high yield farming has not only solved that, but the world’s population growth rate peaked around 1960, dropping from about 2.3% to 1.4% per year now. Yet popular films like The Hunger Games portray a future of starvation.

Why, despite all our bad habits, are we living longer? Better healthcare, better disability handling like telecommuting, plus there is a strong correlation between better education and longer life expectancy.

Will nature collapse? Mt. St. Helens’ 1980 eruption was equal to about the power of 1,500 Hiroshima nuclear bomb explosions. Some predicted that needed farmland would destroy our forests, yet since 1980 our forest cover has increased about 15%. Plus, replacements for CFC refrigerants have improved the atmosphere, as have smog controls. 3D seismology, fracking and better car efficiency standards have erased dire warnings of peak oil,

Will the economy collapse? No, basically market economics, with its distributed decision making, eliminated the situation of one leader causing a collapse. There never was a time when all jobs were secure, but there never were more US manufacturing jobs than in 2017. Despite claims that our workforce participation is down, it is about 63% compared to the low of 60% in 1966. Plus, those who complain that GDP growth is slowing, ignore that measurements of GDP are less accurate, like surgeries produce better results. The author does suggest GDP growth could improve with less regulation and public financing of political campaigns. Government efficiency and less debt can be achieved by replacing many social programs with a universal basic income or expanded earned income tax credits. And since a person’s intelligence is pretty much developed by age 6, extending paid work leave to parents of young children would improve population achievements.

Why is violence in decline? Murder and war deaths per capita don’t even appear in the top ten causes of death. The greatest deterrent to crime is the more likely chance of being caught, thus just the cellphone has reduced crime. Less colonialism, more treaties and trade have reduced war. And as devices improve, so does morality.

Why does technology become safer instead of more dangerous? Cars, ships, locomotives, etc become not only safer, but cleaner. Smaller and more accurate weapons reduce war deaths.

Why don’t dictators win? Liberated people are more ingenious, democracies spread.

How declinism has become chic. Research centers, government agencies and political interest groups seek funding. The media looks to grab attention with negative events, often overusing the term, crisis. As demographics age, there is the human tendency to glamorize youthful times. Human bodies are good at producing adrenaline and cortisol, thus a human tendency towards anxiety over future uncertainty, recently in the US and Europe when the white majority feels threatened by immigration. New, social media leads to more opinionization, clustering of ideas called the Big Sort, people only having relationships with people who think similarly, thus more susceptible to the Big Lie.

The “impossible” challenge of climate change. Basically, see the above for clues to the future.......the Big Lie works, but there is reason for hope since not everyone believes the Big Lie.

The “impossible” challenge of inequality. Progress does breed income inequality. Moving helps, like rust belt Midwest victims moving south and to the coasts. Again, a universal basic income might help.

We’ll never run out of challenges. The author mentions future challenges like more robots, artificial intelligence and quantum computing

I do recommend the book.

#Amazon

Monday, January 29, 2018

Portfolio “Update”

I just sold my DPS and replaced it with NWL. Ordered by largest position to smallest.....

WBA (Walgreen Boots Alliance)
PEP (PepsiCo)
PG (Procter & Gamble)
GPC (Genuine Parts Company)
MMM (3M)
IBM (International Business Machines)
VZ (Verizon)
T (AT&T)
KO (Coca Cola)
ADP (Automatic Data Processing)
GIS (General Mills)
KMB (Kimberly Clark)
HAS (Hasbro)
HPQ (Hewlett-Packard)
SYY (Sysco)
K (Kellogg)
NWL (Newell Brands)
M (Macy’s)
GNMA (6% Bonds)


This portfolio represents about 30% of my assets, about 15% is a home mortgage, about 2% precious metals and collectibles, and the rest are CDs.

Friday, October 27, 2017

Portfolio “Update”

I sold all of my MAT (Mattel) and took a small position in M (Macy’s). Ordered by largest position to smallest.....

PG (Procter & Gamble)
PEP (PepsiCo)
WBA (Walgreen Boots Alliance)
MMM (3M)
GPC (Genuine Parts Company)
VZ (Verizon)
IBM (International Business Machines)
T (AT&T)
KO (Coca Cola)
ADP (Automatic Data Processing)
HAS (Hasbro)
KMB (Kimberly Clark)
GIS (General Mills)
HPQ (Hewlett-Packard)
SYY (Sysco)
K (Kellogg)
DPS (Dr. Pepper Snapple)
M (Macy’s)
GNMA (6% Bonds)

This portfolio represents about 25% of my assets, about 15% is a home mortgage, about 2% precious metals and collectibles, and the rest are CDs.

Saturday, October 07, 2017

The Next Economic Collapse

Since the Great Recession ended about 8 years ago and the US is near full employment, odds are that we are due for at least a recession in the not too distant future. And since US financial markets are at or near all time highs, even a mild recession could hit our financial system pretty hard, depending on the triggering event or events.

Anyway, I'll list some potential triggering events which I see could happen.

1. China's debt situation begins unraveling. Debt over 2x GDP, ghost cities and China's apparent policy of buying up commodities for future use.
2. Climate Change. Hurricanes and wildfires are already stretching resources.
3. War. Recent vitriol makes war with North Korea or Iran a real possibility.
4. Rising US interest rates. Rates are already rising.
5. US debt. Not just national debt, but stock and bond margin debt, auto debt, student loan debt, pay day loans and mortgage debt. And derivatives, especially ETF’s and leveraged ETF’s. All this with massive deregulation.
6. Underfunded pensions. State, municipal and corporate.


Tuesday, July 04, 2017

My Review of "Prosperity Without Growth:Foundations For The Economy Of Tomorrow"

5 out of 5 stars

What struck me as very consequential in the book, by Tim Jackson, is that in the two decades in Japan of low growth following good growth during the previous decades, life expectancy grew nicely.

Thus, the question the book explores, is GDP growth necessary for prosperity? It all depends on how one measures prosperity. Jackson says there should be a Subjective Well-Being measurement, kind of a middle ground measurement between a totally consumer material goods and totally socially oriented economy. Poorer societies do need more consumption to achieve basic human needs of hunger, shelter, etc, but having achieved those basic needs for most of its people, societies need less consumer goods consumption and more services - all together maybe of lesser monetary economic value.

The book does look at the 2008 financial crash and how it brought the world closer together, as needed, since one of the causes of the crash had been less economic coordination.

Bottom line, the book is excellent in showing GDP growth numbers, alone, can be very misleading in measuring prosperity. I recommend the book......
#Amazon

Thursday, May 11, 2017

Portfolio "Update"

I sold my CAT, CDK and HYH (CDK and HYH were spinoffs from ADP and KMB), while adding some IBM and GIS, basically to narrow down the number of stocks in my portfolio and focus better on my dividend growers. The portfolio is ordered by largest position to smallest....

 WBA (Walgreen Boots Alliance)
 PG (Procter and Gamble)
PEP (PepsiCo)
HAS (Hasbro)
MMM (3M)
T (AT&T
GPC (Genuine Parts)
VZ (Verizon)
KO (Coca Cola
MAT (Mattel)
ADP (Automatic Data Processing)
KMB (Kimberly Clark)
IBM (International Business Machines)
GIS (General Mills)
K (Kellogg)
HPQ (Hewlett-Packard)
SYY (Sysco)
DPS (Dr. Pepper Snapple)
6% GNMA (Government National Mortgage Association) Bonds

This portfolio represents about 30% of my assets, about 15% is a home mortgage, about 2% precious metals and collectibles, and the rest are CDs.

Saturday, March 18, 2017

My Review of "Automatic Society"

Worthy subject, bad thinking....

2 out of 5 stars

The author looks at how work has been de-humanized to the point of being just part of a society structured around, as he calls it, computational capitalism, a system where consumer consumption is the measure of success. And, we are ruled by "algorithmic govermentality."

Sure, automation has lead to less needed human work hours, and there is dignity to hard work, be it manual or intellectual. But, this is the way progress happens. The world is the healthiest (longest life expectancy), most educated, etc. By the way, video games require higher order thinking than reading (parallel vs sequential thinking). Not that one replaces the other, just that most everyone's brain is more capable of the creative and critical thinking the author thinks has been lost.

Bottom line, I think this book is misguided AND masked with words so pedantic, one needs a dictionary to read almost every page.

Wednesday, March 08, 2017

Portfolio "Update"

I sold my Chevron (CVX) and added General Mills (GIS). My portfolio, ordered by largest position to smallest....

WBA (Walgreen)
PG (Procter and Gamble)
PEP (PepsiCo)
HAS (Hasbro)
GPC (Genuine Parts)
MMM (3M)
T (AT&T
VZ (Verizon)
MAT (Mattel)
KO (Coca Cola)
ADP (Automatic Data Processing)
KMB (Kimberly Clark)
K (Kellogg)
IBM (International Business Machines)
SYY (Sysco)
HPQ (Hewlett-Packard)
CAT (Caterpillar)
DPS (Dr. Pepper Snapple)
CDK (CDK Global)
GIS (General Mills)
HYH (Halyard Health)
6% GNMA (Government National Mortgage Association) Bonds

This portfolio represenents about 25% of my assets, about 16% is a home mortgage, about 3% precious metals and collectibles, and the rest are CDs.





Sunday, January 22, 2017

The New Economy

As a new president begins handling the economy, my take on where we stand now....

The US stock, bond and RE markets are near all time record highs, with low inflation, and about 8 years of economic expansion and the world's best economy at nearly full employment. Most importantly, this has been achieved through great innovation - the Cloud, Big Data, Mobility, Robotics, the Energy Revolution, etc. And, geopolitically, a minor amount of American casualties. Thus, a solid economy.

Unfinished business, so to speak, is large income inequality and a high number of underemployed workers. Plus, about $20T of national debt.

As it looks now, the new president offers reduced corporate income taxes including repatriation of foreign income, reduced personal income taxes, reduced corporate regulations, an infrastructure program, a protectionist trade policy, a restrictive immigration policy, repealing/replacing ACA, and cutting federal programs except the military

With nearly full employment and a proposed restrictive immigration policy, there will likely be a shortage of workers for any large, new infrastructure program. Already there is a shortage of low end agricultural and construction workers. It seems the biggest need for whatever slack there is in our workforce is for retraining many for the new, more technology advanced economy. Thus, no short term benefit can be expected from such a new infrastructure program. Plus, with our aging demographics, we should be facilitating greater immigration and legalizing not deporting illegal residents. On top of that, repealing/replacing ACA could throw our healthcare workforce, an important part of our growing workforce, into disarray. So, overall, a questionable worker program.

In conclusion, tax cuts and less regulation would likely stimulate the economy short term, but longer term, they are of questionable worth since there is no certainty how long or how much our economy can expand until the next recession, plus with such a large national debt, we are in terrible shape to handle the next recession. So, seems with a healthy economy, instead of continuing our slow and steady progress, we are introducing massive uncertainty, not to mention a major expected foreign policy reset.





Saturday, August 06, 2016

My Review of "The Fix"

4 out of 5 stars.

The book, by Jonathan Tepperman, excellently looks into the world situation, as many describe as hopeless, but sees many examples of extraordinary success in tackling big problems and presents them as ways which might also be used elsewhere. The common denominator of the successes is using pragmatism, not looking for perfection, but moving positively.

First, he sees the Terrible Ten problems being income inequality, immigration, corruption, Islamic extremism, civil war, the resource curse, energy, the middle income trap, gridlock I, and gridlock II.

As for possible improvements, I will cover these.....

Brazil's poverty.

Rather than lots of social programs, Lula introduced Bolsa Familia, just giving poor families cash  with certain rules, like having the kids attend school so that future generations will have greater chances for success in addition to making the parents better consumers. And being cheaper for the government. Basically combining left wing goals with right wing, Milton Friedman  economics......pragmatism.

 Canada's need for more people, but white resistance, even from existing minorities.

So, rather than an incremental approach to immigration, mass immigration with strict vetting for those most likely to help the economy, resulting in a true multicultural nation. And with strong government support for multiculturalism, it made the nation more Canadian, not less.

Mexican gridlock.

Since the winning party had no majority, it created a plan to have all three major parties participate.

America's shale revolution

It really could only happen in the US because of such things like its bankruptcy laws which encourage risk taking, RE laws which sometimes allow residential land owners also mineral rights thus encouraging investment returns for average people, Wall Street lending/investment, environmental costs effectively managed, lesser population density than Europe, etc.

Other topics include Rwanda's overcoming its genocidal past, Indonesia overcoming terrorism, Singapore overcoming corruption and lack of natural resources and Botswana overcoming conflicts over new diamond riches.

Sure, it takes special situations, like good leaders or just good luck, but all counties or governments could gain insights from the book, hence I recommend it.

Thursday, July 21, 2016

My Review of "California Comeback"

California Comeback

4 out of 5 stars.....

The author, Narda Zacchino, is well-qualified to analyze what is happening in California, both by growing up and having a long, distinguished journalism career in California.

And I, having lived in California since 1973, think she has done a fine job in concluding that this is not just a comeback, but as her subtitle states, a model for the nation.

The book starts with the California Dream beginning with the 1849 Gold Rush and the hope for anyone striking instant wealth, but just story-like until 1963 when CA overtook NY as the most populous state, signaling the Eastern elite better take notice. Governor Pat Brown, inspired by FDR's New Deal, basically had brought about a CA New Deal,

Then CA turns Right, the Reagan Revolution, all leading up to the 2008 crash, where CA was ridiculed.

Enter Jerry Brown, Pat's son, as governor in 2011. Having been governor from 1975 to 1983, plus having served in many positions like Secretary of State, Attorney General and Oakland mayor. Always socially liberal and fiscally conservative, plus with such experience, pragmatic, he set CA on a remarkable path, just passing France as the world's 6th largest economy and distancing itself from the previously heralded Texas model.

The book covers many more details and history, such that I do recommend the book.

Saturday, July 09, 2016

Negative Interest Rates

Negative interest rates spreading around the world are a result of globalization and technology, a unique combination in history, resulting in powerful deflationary effects.

But, rather than the deflationary effects being all bad, not only are many good because of increased productivity, but even many of the bad like reduced income in nations or localities with inefficient economies, can improve efficiencies by investing in things like education, healthcare, technology and infrastructure.

This is a unique time in history in that because of low or negative interest rates, such investments are a no brainer for wise economies.

As for misappropriation of capital, that is possible whatever interest rates are. The US housing bubble behind the 2008 crash was mostly due too poor lending standards and lax regulation on complex new securities and derivatives. Now, Denmark is mitigating a housing bubble by restricting foreign money into Danish housing and other restrictions/regulations.

The resultant large income inequality is an opportunity to redistribute some of the wealth for investments mentioned above, including increasing minimum wages or earned income tax credits. This even helps the wealthy long term.

Friday, June 17, 2016

The Economy

The US Economy

The US economy is doing fine. Financial crashes take longer to recover from, than cyclical recessions. The faster 1980's recovery was not preceded by a financial crash.

We have had the longest consecutive months of job growth in history, with both unemployment and underemployment about 1/2 than before the recovery began. And inflation is contained, while energy costs and borrowing costs are at bargain levels. And wages are starting to increase. We have the world's best economy.

As for presidential candidates blaming trade deals for less well-paying jobs, they are wrong. We are in the middle of the latest industrial revolution, brought on by globalization and technology. It's called progress.

There are plenty of high-paying jobs available, plus, part of this new industrial revolution is an Enterpreneurial Age. Other than professional jobs (doctors, lawyers, even blue collar ones like electricians, etc), starting/investing in businesses is now easier and more lucrative than ever.

Plus, government sponsored infrastructure jobs, with interest rates at historically low interest rates, are an easy way to good jobs and affordable higher education.

As for the "disappearing middle class," that is just misreading economic history. 1950-1970 was an aberration, the result of post ww2 industrial world hegemony.

1970-mid 1980s was both a readjustment of our industry brought on by Japan beating us with manufacturing. Plus, inflation brought on mostly by the 1973 Arab oil embargo.

1990-present started the new Renaissance, the end of the Cold War, globalization and the digital revolution, together meant a growing world prosperity, but our middle class struggling because of foreign competition. Meanwhile, higher wage people in the US grew from about 14% in 1971 to 21%, resulting in record income inequality.

But, with rising wages, ACA, and improving education (Common Core, expanding community colleges, and online learning including MOOCs, and election of the right president, it is reasonable that a new US middle class will emerge.

Saturday, May 28, 2016

My Review of "Age of Discovery"


5 out of 5 stars.....

A must read! The authors, Ian Goldin and Chris Kutarna, brilliantly describe in detail how we are in a new Renaissance, starting in 1990, much like the original one of 1450-1550, initially centered around Florence and Venice, Italy.

A Renaissance, because it affects things worldwide, even seeing parallels with Gutenberg and Zuckerberg, both the printing press and digitization freeing speech. And Columbus discovering the new world with the falling of the Berlin Wall, spreading culture.

This is the most prosperous time in history (% above poverty), literate (estimated more alive today with college degrees than all before 1980), longest average life expectancy, most peaceful (% dying from war), due mostly from spreading of democracy and trade, etc.

And with both come great income inequality and great resistance from established thoughts, seeing parallels between Copernicus' heliocentric proof and today's scientists' proof of climate change. And back then, the Inquisition, now al Qaeda and ISIS, also here in the US, religion based resistance to same sex marriage, transgender civil rights and Planned Parenthood.

So, with all these advancements, come massive job losses and other distresses. The book even uses the Renaissance's Michelangelo's sculpture of David as both an example and metaphor for the advanced skills of a Renaissance versus the dullard brutish Golliath, culminating in our choices now, which will we choose.

The book goes into how there has been a paradigm shift from cause and effect to quantum superposition. Also, nanotechnology and its future are mentioned. Complexity is covered, how it advanced finance, yet also brought new risks.

Etc,etc.

I strongly recommend the book.

Sunday, May 01, 2016

My Review of "5 Easy Theses"

What differentiates this from just being a very good book to what I think is an excellent one, is the background of the author, James M. Stone. Not only does he have an excellent financial academic start, but then in high level government positions, to starting and managing a decent size financial (insurance) company. So, a well diversified background to write about the  challenges America must face, all depending heavily on understanding finance.

He sees 5 main areas to tackle. Following each are some items covered.

 1.  Fiscal Balance

 Fix Social Security (adjust for life expectancy), Medicare (too generous) and Government pensions (defined contribution and matches for new enrollees), eliminate home mortgage interest tax deduction, eliminate corporation debt interest tax deduction.

 2.  Inequality

Both income and wealth distribution need to be addressed, in tax law especially looking at tax dodging by the wealthy and corporations via trusts, etc, also favoring long term investing and reducing speculating. The author also favors an annual tax on unrealized capital gains and also repealing the "step-up" cost basis for inherited assets.

3. Education

More money into poor areas, more use of charter schools and more vocational education - better tracking of kids, also a national service program, increased early childhood education, longer school hours.

4. Healthcare

Lots of changes here - drug negotiating and other things plus a single negotiator, tackle end of life care, single payer and regulator, reduce excessive testing, reduce overuse of specialist doctors, salary more doctors, more use of specialized nurses and physician assistants.

5. Financial Reform

Break up big banks - basically incentivize them to break up, less bank leverage, more disclosure, less use of derivatives, hedge funds regulated like mutual funds, reduce finanialization of our economy - it reduces productivity.

I recommend the book.