That Was The Week That Was-4th Week December

The Mayan Calendar predicted the end of the world on the 21st of December. What we didn’t know was it all could have been a Mayan practical joke or just a scribbled opinion. Today’s economic soothsayers have little in common with their Mayan counterparts but sometimes toss in a few guesses of their own just for fun. Lately many scribes have been predicted a global recession if  a certain group of gas-bags in Washington don’t compromise on a tax and spend plan. An opinion or guess on the future is just that no matter the millennium. I am lately reading that a lot of bloggsters are pushing hard on the Emerging Market sector to lead in 2013. Robert Powell, everyone’s favorite economic doomster, reports on an overarching trend that includes investing in the emerging markets as it benefits from investments for the 65 plus crowd. I like the sector for other reasons which include fixed income and non-correlation with U.S. stocks. Health Care Mutual Funds should also do well as fund companies have broomed those companies that are in contrast with Obama Care. Home Builders and associated industries look to perk up in 2013. We’re seeing values in certain zip codes as a lack of good new housing is getting scarce. Still there are bargain spots such as Las Vegas for those looking to buy a condo on The Strip, or an entire subdivision. MarketWatch sooths slipped on a turban and gazed into their crystal ball and suggested that investors steer toward the following as they are considered poised for a strong 2013:

• MegaCap Companies- Dividend, cash plus growth equals stability.
• Dividend growth again and again.
• Europe goes up.
• China breaks out
• Gold =  $2000
• Real Estate Builds
• Industrials steam ahead – including building products, remodeling etc.
• Technology = Qualcomm and Apple mentioned.
• Finally…Dogs of The Dow. And if truly confused the writers at MarketWatch say stick with 2012 winners.

On NY Eve 2012 Still No Deal! Huffington posted Republicans would agree to a compromise only if a re-jiggering of COLA on Social Security would be included in the deal. A compromise on farm bill stalled a doubling of the cost of milk. Huff didn’t know if a vote had time on a new five year farm bill. Still there are huge gaps between parties on issues of food stamps and crop subsidies.   

Let’s Get The Silliness Over! Markets were all over the place this week. Some days opening slightly higher, dropping like a manhole cover and then staggering up to close off their lows. It could have been worse. The fact that unemployment numbers came in at surprising better than expected and housing continued to climb showed that the U.S. economy is poised to generate some serious growth. Retail sales were initially reported slightly less than last year after a glorious start. Still those numbers get re-examined as retailers count gift cards and after Christmas shoppers. Gold is way off its feed, closing last Friday at $1655-below support. Oil, in the meantime, has stealthily climbed over $90.00 a barrel. The 10-year bond has slowly charged to 1.73%, while the 30-year is less than 3%. Now the economy is in the hands of the politicians. Individuals and businesses are moribund waiting for direction- any direction. Until then Individual investors will be sitting on their hands.

 

   Speaking of Silliness…The 7 worst Predictions of 2012: (1) Facebook Rocks! (2)The Supremes will kill ObamaCare. (3) Brand damage Chick-fil-A will hurt sales by opposing gay marriage. (4) Housing has no headroom. (5) President Romney! (6) Mortgage Rates are Jumping! and the bestest       (7) The World will End on December 21, 2012.

 

StockAuthority Investor David Sterman blogs his choices for commodities in 2013.

• Copper
• Oil
• Silver
• Farmland Ag chemicals such as fertilizer and also farm equipment

CNBC Christmas Eve on Squawk Forecast A Decade of ‘The Nifty Fifty’. Large Cap stocks that pay dividends. These as a bond income replacement. A slight dip in assets in bond funds precipitated this insight. 

It’s All Politics…dumb politics… ‘Over the Holiday I re-watched the Ron Howard film, ‘Frost/Nixon’, and the words spoken reminded me of what a politician put us through and what politicians as a group are now putting the nation through, ‘…utter agony.’

Here’s where they were before the Holiday break…and they couldn’t make a deal because of politics!

The best deals agreed to are those that both sides feel they’ve lost.

Christmas Eve Markets Moved Down Slightly. A rally on Asian Markets on banks and realtors.  Gold closed $1659. Domestic automakers surged on news of better than expected sales.

My Home Office Sent Me a Memo From The Hartford…They’ve sold their individual Life Insurance Biz to The Prudential. We’re seeing more of this. Life Companies bailing from their primary business because of low interest rates. If you own an annuity or life policy under the Hartford label and cannot get in touch with your agent- call or e-mail me.

Most People My Age Didn’t Start Investing Until 1987.   A lot of them bought US Saving Bonds, CDs and insurance policies long before they’d put a penny into a mutual fund or common stock. Savings and Loans were even considered risky. Mom and dad bought income stocks like utility companies. If you worked for an auto company you also  bought stocks in manufacturing companies.  Grandparents owned real estate. The one thing they all had in common was no one taught them what to do with their money once they earned it. There was no school or education program for saving money. There was no computer, no tout sheets, no real place you could study what the markets were about. In 1987 the wheels came off the stock market. It was a real crash- with about a 25% fall. Some hard lessons came from that market disaster. Here are a few from Wallace Witkowski of Dow Jones:

• Don’t Lose Your Head. If Exxon Drops 50% in One Trading Day it Doesn’t Mean Anything Really Changed in 24 Hours.
• Buy on Fear, Sell on Greed.
• Make a Crash Shopping List.
• What Goes Up Fast Comes Down Faster.
• There is No Such Thing as ‘It Can’t Happen.’
• Tune Out The Daily Noise.
• Don’t Bail.

 

 

Morningstar Reported…The stock, fund and ETF evaluation service gave a three point analysis that sums up where we are and going forward in 2013:

• The Market is Fairly Valued.
• Market Volatility Will Be A Way of Life as Europe woes continue and China remains closely scrutinized.
• The Fiscal Cliff, contrary to the press, will end up being a non-event.  More Like a slide than a cliff. Unemployment will be cut plus payroll withholding on social security will go back to 6%-  biggest hurt those in lower income classes.

Gold

2012 Production

A scarcity caused by lower production may impact price in 2013.

Here’s Some More Picks, Opinions and Buys by Professional Investors. These could change but if making a potential buy list you could do worse.

• Mark Holder likes Seagate and Kohls.
• Chad Brand finds Apple dirt cheap.
• Thomas Lott likes Alliance Resource Partners
• Eddy Elfenbein puts Microsoft and Wells Fargo on his Buy List.
• Amit Chokshi updates his opinion on shorting Jarden.

Short or Intermediate Bonds Kaput…

Ignoring fundamentals some investors stayed away from the markets for the entire year. They preferred losing money in bank savings or money market funds. Others have pulled their money to the sidelines for the last four years. James Paulsen, CIS at Wells Capital Management, said, ‘Our biggest liability in the stock markets has been the total destruction to confidence.’ The loss to investors by sitting out the last four years, according to Bloomberg, was a whopping $200 billion as the markets moved higher.’

 A Happy, Healthy and Well Deserved Prosperous New Year to All!

Questions call Paul @ 586 783 7080 or email him at pstanley@westminsterfinancial.com. Share this blog with someone who is serious about their money.

That Was The Week That Was-3rd Week December

  This is a story about unforeseen consequences with joint investment & savings accounts when relationships sour. Before the markets went boom in 2008, and while I was doing my radio program, a married couple came to see me. They had a lot of money sitting in a bank account doing very little and after a few discussions a joint investment account, funded with mutual funds, was decided by both and opened. On this account both the husband or the wife could make deposits or withdrawals without the signature of the other. Things went well for a few years until one day the husband called and asked, in not so polite terms, what I did with fifty thousand dollars of his money? After a few questions and phone calls it was determined that a month earlier his loving spouse had called the mutual fund company direct (circumventing her representative) and had them send her a check for fifty  thousand dollars and  was able to deposit it in her separate individually registered bank account, even though the check was made payable to both her and the husband. The husband finally admitted that he and his lady love were in ‘sorta’ conflict and trying to work things out. She, believing in a bird in the hand a lot more than one promised, decided to split marital property before a judge did. This story had a happy ending but for many people this could have been a disaster- for either spouse. Agreeing to have both party’s signatures on any withdrawals is something that a couple with a joint account should discuss before things get ugly. Aged parent with an adult child jointly on their saving or investment account should also be aware that kids sometime steal and prevention is worth…tens of thousands of dollars. Instructions to the broker or bank can pay dividends. If you cannot trust, or even suspect a possible problem with the other ‘joint’ party, or if conflicts arise, than separate accounts with named beneficiaries on each will do the job of protecting, keeping harmony and affording liquidity. Got Qs Call or E-Mail Paul…586 783 7080…

Bank of America Merrill Lynch suggests a moderate investor allocation for 2013…

• 65% stocks
• 33% bonds
• 2% cash

This for the next 12-18 months. Also, Fifth Third chief investment officer Jeff Korzenik said that he thinks we have another year or two of low rates. He said not to chase yesterday’s winners. High quality bonds especially. And, he also suggested and concurred with BofA BFF’s increasing allocation in international and emerging markets bonds and equities.

My Predictions For 2013… I’m one of these guys who now wears a belt with suspenders, looks behind my truck before I back out of the garage and checks the cholesterol content on everything I eat. It wasn’t always this way. Back in the day I thought if folks owned one mutual fund company they could do all they had to do and get great allocation and returns. The crash of 2008 taught me different. Fund companies did predict a Democrat for President in 2007 but they couldn’t foresee the coming global calamity in products their kinsman created, packaged and sold. I sometimes wonder about that because if you’re in the business of buying and selling individual stocks and fixed securities and rubbing shoulders and knees with other folks who are also buying and selling individual stocks and fixed securities at other companies who in turn know of and are rubbing knees and elbows with…well, you get the picture- why was it that most everyone didn’t know what was going on in their own industry? Certainly Joe and Jane knew, or had an inkling, that something was amiss when radio ads were announcing all the free mortgage money that was theirs for the asking. That off my chest here’s a few thoughts for the coming year. 

• The Federal Reserve is at the end of it’s tether.
• Let Ben Bernanke trade the Federal Reserve into eliminating our national debt. He borrows at 1.65% and buys long-term mortgages paying a tad less than 4%. You do the math.
• Multi-national companies – yes. European or China Only- nyet. Not for awhile.
• Long-term fixed for another 12 months.
• Inflation a coming.
• Home builders. Real estate. Yup.
• Refinance anything and everything.
• Dividends are still important. (Make that a Very)
• Large Caps Have The Cash- What’s Not to Like About Google, Apple, McDonalds, Coca Cola, Starbucks and Disney
• Defense is a game we should all play with our investments-You May Leave Money On The Table But You’ll Sleep Better
• Bottom line: Markets will muddle through and up in 2013 no thanks to the politicians and the lack of leadership in Washington. Win both with fixed and equities in 2013.

Did You Check Your Portfolio Stock Overlap? If you have all your money in one fund family with different mutual funds chances are you own the same stock in different funds even though the funds have different investment objectives. This would explain why your accounts go up and down all at the same time. There is a computer program that you can use and find out how bad your stock overlap is. If you don’t have the resources to do this call or E- me.

  Apple Downgraded by Citi to Neutral. The slide of the stock price from a high of $700+ was just too much to ignore. Morningstar evaluated the shares on December 6th and maintained their  fair value price of $750. CNBC Heads on Friday talked up the stock saying they’d be all over it after the first of the year.

Monday- All Indices Up. Dow 100 points as noise from Washington on a deal circulated to investors. The talks between the President and the Speaker came as the nation is fed up and the pain of Newtown, Conn is just the worst.

Working for a Family Trust the Trustee Asked if I was an Investment Technician…? Technically the answer is no. But the following chart from Michael Gayed is very interesting and you may want to use it going forward. It’s the relationship between Gold and Copper. Gold is the ‘safe’ haven investment while Copper is the ‘risk’ on investment. Gayed’s conclusion is that when Copper outperforms the risk is on and he suggests that now the risk is on for investors.  You can create this chart on StockCharts.com Gold was up $14 an ounce Friday as markets fell.

The laughing you hear is from the halls of Morgan Stanley. The firm was fined $5 million by regulators for its handling of the Facebook IPO. Let us not forget that the firm had a $2.4 billion short on the stock. Plus all the fees acquired along the way. ‘Five million? Let’s have lunch!’ Those meanie regulators!

Yelp is a public company. What it does is allow anyone, including the crazy lady with the twenty cats, to go on their web site and give an opinion on places they’ve done business with including restaurants, pet stores and hair removal shops. Loads of folk visit the site- some 33 million a month. Andrew Zimmerman, the chubby host of his Travel channel show about eating anything, took umbrage with an amateur review and essentially said in a podcast that our opinions are those of ill-informed morons. Getting back to the story. Yelp stock took a hit Monday last because Facebook will be encroaching on its territory. Still other analysts think the stock is worth more and Scott Devine of MS gave Yelp a neutral rating but a $22 price. There are lots more places to grow since the company has only a fraction of the country under its website. I visited the site out of curiosity and saw little banner or pop-up advertising. Perhaps it is that that is holding the share price down? 

February 16th- Date of My Inflation Breakfast Meeting. It will be at Sycamore Hills Golf Course- Saturday Morning at 9 AM. ‘Call me now for reservations.’

 

Here’s a chart above that illustrates even the most conservative investors have to ‘bail’ on bonds eventually and embrace dividend paying stocks, ETFs or mutual funds. If not now- soon…

Tuesday Markets Up Across The Board. Very nice day as hope for a deal sprang from the bosoms of traders…Gold closed $1677. Dow broke 100 points and Naz was huge as Apple found traction. Wednesday Markets took back almost all what went up. Thursday up 1/2 of what was up Tuesday but down Wednesday.

 

Kirk Spano at Dow Jones reminds us that the markets are either forward or backward looking and rarely does the performance indicate ‘what’s happening now.’ He also pens reasons why we’ll see more inflation in the near future: Central banks globally have printed trillions of dollars, there are more mouths on the planet every new day and the food and energy supply is flat.

U.S. Treasury Sells GM Stake. GM agreed to buy-back 40% of the US shares and pay $400 million more than it would have had it bought those shares in the open market. GM shares spiked 6% on the news. Ford was up Friday as all auto manufacturers publically traded was slightly down.

Libor is the London interbank offered benchmark. This is the long winded way of saying the Libor is what interest rates bank charge when borrowing from each other. The Libor is also used as a ‘global’ benchmark to calculate everything from Government bonds to mortgages and credit card rates. And because of the amount of money involved (trillions and jillions) a small move in the Libor means big profits for banks. The calculation is done by using the average interest rate charged by and from a consortium of banks. UBS instigated a rigging of the Libor that was a global confidence game. Fannie Mae and Freddie Mac are thought to have lost $3 billion because of the rigging of rates. Regulators say this game continued from 2005-2010. The UBS was investigated, admitted guilt and fined $1.5 billion by regulators with No Criminal Charges. Don’t we just love banks?

Thinking of Investing in China? Growth @ 8 1/2%, huge population, increasing personal income, etc. etc.? Zacks sez buy multi-nationals that do biz in China and not the Chinese companies. Loads of companies that do including KFC and GM.

Gold closed $1652 Thursday.

Not a Big Fan of Groupon = not an investor or user be. But JP Morgan announced that they are buying a smaller version of Groupon called Bloomspot. The cost a measly $3 million. Why, you ask? Because JP has a credit card base and this is a good place to gain extra income. The company will structure discounts on client’s credit card bill. Mastercard is already in the biz with its own acquisition called Truaxis. And you thought there was only one way banks could skin you?

Cody Willard is 40 something, an investor, writer and talking head. Cody sez ignore the fiscal cliff. If it happens make sure you have your shopping list ready to snap up bargains.

No Deal- Republicans and Republicans Disagree. Boehner has little clout with his own party. ( No confidence seals The Speaker’s fate. But to give the man his due I doubt if a Rayburn or Gingrich could corral this bunch.) The difference between what Dems want and what Republicans demand is a drop in the ocean. CNBC discussed a U.S. downgrade; not because of fiscally irresponsible but because we’re politically irresponsible. At the same time the Euro is trading higher and the U.S. dollar is still a safe haven. Joining the EU was also discussed as the primary political agenda of the President. Reasons given: Global trade, health care, and social benefits all point to the end- game favored by the Democrats and the President.

 Republicans kicked the House Speaker aside and investors showed their displeasure Friday with a modest pullback.

Good News the World Didn’t End…! Good, ‘cause I still got shopping to do…

Merry Christmas! Remember if you have a little extra then help families in your neighborhood by giving to a local shelter or church.

Questions call Paul @ 586 783 7080 or write him at pstanley@westminsterfinancial.com Share this blog with someone who is serious about their money.

That Was The Week That Was-2nd Week December

Retirement Planning is something most people can’t, won’t or don’t do. Or, if they do do- they do it once and then forget about it. Most of the time people just don’t know where to start. But the big thing is that things change from the time people start their plan to the time when the plan comes to fruition. In between then and now  people get divorced, lose their jobs, earn less, make bad investment choices, give money to kids, support a sick parent, get sick themselves, injured or lose their home. Then there are the folks that plan and ignore guarantees and die too soon. Rarely does life work in a straight line where the rules are clear and if you do this then you get that. In other words ‘retirement planning just doesn’t work for most of us.’ But, I’m singing to the choir and you know all this. In last week’s Dow Jones’ MarketWatch there was a piece that reported the ten numbers that could change your life. It was about retirement planning.  Here’s the numbers they say you should know:

• Calculate Inflation now
• Inflation later
• Needed income at retirement
• How much money you’ll need to get that income
• Taxes now and taxes tomorrow
• How much you have today, less the home you are living in 
• How much you have to save to get from here to there
• How much you can afford to save (that wasn’t one of the numbers but it should have been)
• The annual return you need to get each year to get from here to there

All of those numbers are subject to change. That includes how much money you have now. Tomorrow you could have more…or less. That makes retirement planning impossible; but still there are seminars, software and financial professionals that swear they can guarantee a life of retirement freedom. Yes, you can take a snapshot on where you are, where you want to be and what it’ll cost you to get there. But to be even semi-accurate one would need to keep on snapping pictures from now till the day of retirement to keep up with stuff that happens to you. Even then things won’t be guaranteed.

When I started in the biz I was promised that if I kept my nose to the ‘grindstone’ and did all the right things I could retire on the princely sum of $10,000 a year. This was in the day when a postage stamp cost three cents and chicken sold in the supermarket for nine cent a pound. You can see how well that plan turned out.

The Conclusion is to know what the above numbers are, where they fit, how to calculate but don’t engrave them in stone or elevate those that are selling ‘the concept’ to some sort of financial gurus.

The Most Important activity in the planning process is to pay yourself first, manage your money prudently and earn more on your investments than the combination of annual inflation and your personal marginal tax bracket. Do that and you have a reasonable chance of financial security.  Got questions, call or email me.

Over the Weekend A Growing Chorus That Washington Won’t Get It’s Act Together & The Nation Plunges Like Lemmings… and only then will some sort of a deal on taxes take place….you would think locking them into a room they’d come up with something by now, wouldn’t you? They just don’t want a deal!

The Ben Bernanke Made It Clear…Bonds are safe from destruction until unemployment falls to 6 1/2% or inflation heats to 2 1/2%. The Fed Chief made the announcement that the Fed would not raise rates unless one of the above conditions occurred. This is meant to allow businesses and individuals to dig in, take advantage of low rates; and hopefully the politicians will do their part too. The Federal Reserve, never in its history, has ever given such an insight to its future plans on raising rates.

Monday Markets Edged Up a Tetch…across all indices. This included gold closing over $1704.  McDonalds same stores in November up 2.5% when ‘experts’ cautioned for more losses. Big seller was their  breakfast onion/sausage/cheese sandwich. China ramped up production of industrial materials dispelling worries over lingering economic malaise. This included copper and oil. Beijing’s introduction in September of a $160 billion infrastructure stimulus package provided the catalyst and encouraged mills to restock, said analysts in the WSJ.

Chuck Jaffe at MarketWatch with his sack of coal to hand out to fund companies included Vanguard on this year’s list. Within annuities the money market subaccount funds are utilized for conservative deposits. The Vanguard Variable annuity semi-annual report illustrated that their money market fund earned 0.07%. This did not include, The Jaffe wrote, expenses and fees. When factored in this safe haven that the fund company titled, ‘ helped investors preserve capital’ had a net return loss of 0.08%. and still no one gets fined, loses a job, goes to jail or is sued…

Watch For My Inflation Breakfast Meeting Coming Soon. Those that should attend are those that believe all the current and past government spending will create an inflationary economy where the cost of goods and services will rise and personal income lag. The Question and Answer will provide answers to what investors should do with their money and how to prepare.

 

From JP Morgan Asset Management  This Recovery is the weakest since the Great Depression.

In 2013 you could do worse betting on home builders or those ancillary businesses that support home building. Eight years later but better than never…

Tuesday Markets soared…sputtered…but closed safely up on the possibility of some sort of a happy conclusion on taxes. Up across the board, and this wasn’t window dressing. It was sincere better buy bargains. Asia was also up on our domestic political hopes. The Federal Reserve absolutely positively discourages Big Banks from Getting Bigger. The Bigs have today almost 44% of all deposits from 37% in 2007. The Fed, according to the WSJ, has made it clear to The Bigs that they will discourage any attempt at new acquisitions.

They’ll wait until the political climate changes…that’s the scary part.

Ten Stocks For 2013- …Barrons Picks:

1. Apple
2. Barnes & Noble
3. BlackRock
4. General Dynamics
5. JP Morgan
6. Marathon Petroleum
7. Royal Dutch Shell
8. Novaritus
9. Western Digital
10. Viacom

Are The Markets Rigged Against The Small Investor? Tadas Viskanta wrting for MarketWatch explains that the lost decade in equities has caused many people to turn their backs on investing. He also writes that many active managed funds have not been able to beat their indices; and if the pro’s can’t what chance the average Joe or Jane? Most investors cannot make money in the market for a few reasons: (1) Lack of time (2) Lack of knowledge (3) Lack of adequate money. And many funds are not in competition with the indices. Those that are able to beat an index have outstanding management and lots of luck. Consider that money is constantly coming in, most all funds hold some cash and the index doesn’t plus- fund allocations usually don’t match up to an index dead solid perfect. So the argument about active funds not matching up to an index are bogus and a smoke screen for Index Investors like Bogle to snark at. This argument is old and deserves a proper deep six.

Today’s Wealthy Will Get Hit With Obama Tax…and then you will…

It’s important to note that the Threshold amounts are not indexed for inflation. There’s going to be trouble down the road for millions of people as inflation heats up incomes. I only have to remind one and all about  the alternative minimum tax! We went after the so-called rich with that one and the middle-class got bit…

Wednesday was an ugly day for the markets. There was a nice bounce in the morning and then it fell apart and the Dow and Naz closed negative. The S&P had a small partial teeny decimal placed gain…Dish Networks Green-Lighted to be able to use a slice of air- used specifically for satellite transmissions- for more cellphone use. The FCC okayed the deal on Wednesday and some analysts say the air could be worth an estimated $12 billion. No one knows and Dish isn’t talking exactly how they plan on using this extra air. DISH closed at $36.67.

By the Time I write this Friday Morning Washington May Have Smelled The Roses and Compromised on Taxes. But I doubt it. Thursday Markets Fell. China was up huge! The Shanghai index up 4% on manufacturing news. Domestically gold fell below support. All indices down- S&P streak snapped. The President acts like he’s gotten a mandate rather than a second chance. Boehner suddenly develops a love affair with small business. Pelosi awakened from a deep snooze and said that a political deal had to be engineered; and the CEO of Honeywell is acting like a go-between in shuttle diplomacy between the White House and Congress, reminiscent of a scene from a John le Carre novel. In the meantime the public is demanding both sides to compromise. Stocks will continue to fall as long as this continues. 

TCB – Elvis =Taking Care of Business. It was real simple for The King- Take Care of Business. Seems politicians (you can’t call them law makers) have forgotten why they’re there. Seems like everyone knows it except them.

Pssst…Contrarian with a love for Dividends? MarketWatch’s Matt Andrejczak suggested investors look at McDonalds, Intel and Microsoft. Two pay 3% dividend and the other a touch better than 4%. All are off their highs (Yes, as is Apple) with McDees slipping over 12%, Intel close to 30% and Microsoft is off 17% plus. Total debt for each is less than 60%. You can also put it on your shopping list, watch the chart and daily action. Need more info on how I watch a stock? Call or write me an E…

 

I was talking to a real smart guy yesterday and he suggested that people do two things in the next few years-(1) Buy Real Estate (2) Remortgage their existing real estate. Even if you have a 5% mortgage you’re paying too much. Call your mortgage company. And, according to another friend, Bill Minor, his monthly real estate newsletter sez home sales were up 2.1%, a 10.9% increase from last year. You can get his latest real estate market update newsletter by emailing him at Billminor@kwrealty.com  

Once Upon a Time, last week, there was an IPO (initial public offering) called SolarCity that was too expensive and so the investment banks and issuing company reduced the share price ahead of the offering. Everyone thought that would be the kiss of death since the company was also in the solar panel business. It doesn’t make the panels, it installs them. But investors were infatuated with one of the big backers, a Mr. Elon Musk, who developed PayPal, sold it to EBay and  a huge backer of Tesla Motors. Even though the business model and industry seemed iffy to investors they all thought the world of Elon Musk and so piled on and drove the stock price to where it would have been before the company and bank reduced it. And, we don’t know whether anyone except Elon, the bank and organizers, will live happily ever after but we’ll watch and report….shares closed down Friday to $11.72

Merry Christmas to All. Have A Safe and Wonderful Holiday. Today, more than ever, make sure a few of your giving dollars go to those local charities, churches that can brighten a bit those families in our neighborhoods not as fortunate.

 Prediction Season… Bank of America, Merrill Lynch peers deep into its crystal ball and sees…

• Global Equities top performing sector
• Dollar & Euro rally on global recovery
• High Yield & Emerging Market Bonds outperform in fixed
• Government Bonds should rise- but not much
• Gold hits $2000

All this is is an opinion….nothing more…

Finally- tune in next week for more predictions and what a moderate asset allocation portfolio should be.

Questions call Paul @ 586 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.