Posts Tagged Dr. Lacy Hunt

Reviewing my Predictions from Last Year

Posted by Preston Poulter in Investing and Financial Doomsday on January 8th, 2010

So here it is, another year. “Another year over, and a new one just begun,” as John Lennon said before Yoko added her cacophonic voice. I just it’s time to look over last year and see look at some of the predictions I made. Specifically at the start of the year and in May, I said:

  • That we would see the end of all of this deflation talk. In terms of the major media, we more or less have. It don’t see anyone talking about deflation in the mainstream media today, but I expect that to change. I think we’ll see a resurgence of deflationary talk as the stock market loses ground. Deflationary talk seems to follow stock market collapses the way flies swarm to carrion, and this stock market seems prone for another leg down. When it does, get ready for more talk of deflation.
  • I also said that long-term government bonds were not a good place to park your money last year. Well, let’s look at the benchmark of Hoisington Long Term US Treasury fund. It opened last year at around $19.50 and went straight down the whole year to end at around $14. OUCH. Of course, this hasn’t stopped Dr. Lacy Hunt from yammering about what a great investment government bonds are, but it’s not everyday you can lose a third of your investment on government bonds. Way to go, Van Hoisongton investors.
  • I said that Barrick Gold was a good place to put your money, and I made a good a good 30% or so off of trading that stock on the way up. Look ma, no doctorate in Ecnomics!

Well, I’m feeling pretty smug about last year. As for this year, I’m thinking Barrick should hit $50 a share or so on the next 90 days, which will make me a fair amount of money. I’m also thinking that we’ll see another significant stock market decline, so hold onto your hats stock investors. This years going to be really hairy.

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Signs of the Times

Posted by Preston Poulter in Investing and Financial Doomsday on June 18th, 2009

Here’s some interesting news that has hit the wire in the last couple of days:

  • A new hedge fund dedicated to hyper-inflation is being created. Personally, if you really believe hyper inflation is coming, wouldn’t you just buy gold? Why on Earth invest in a hedge fund that can go broke on its big leveraged bets?
  • Speaking of leveraged bets, Obama is speaking of giving the Federal Reserve yet more authority in order to regulate the financial system to make sure that the kinds of crashes don’t happen again. Let’s review folks. It wasn’t until the Federal Reserve was founded in 1913 that we had depressions in the first place. Up until then, we had plenty of downturns and panics, but never a depression. Since the founding of the Fed, we’ve had the Great Depression and, now, this. Clearly, the solution is to just keep giving more authority over to the private banking consortium known as the Federal Reserve and hope that they clear up things. That ought to work great.
  • The people who followed Dr. Lacy Hunt’s advice and bought long term US Treasuries are down quite a bit. Holders of the 30-year Treasury are down roughly 25% since the start of the year. That’s gotta hurt.

The world has been going on it’s merry way the last few months. The dollars been gradually decreasing month after month much to the chagrin of the those predicting continued deflation. Gold’s been near its high and the stock market has just meandered about. Nothing truly Earth shattering has been occurring of late, just a lot of what was expected, including the State of California going broke. It’s projected that June is the last month for California’s budget. After that, that state’s out of money.

I find it bizarre that the state with one of the most onerous tax burden’s in the one going broke first. The state has a 10% income tax tacked onto a 9.25% sales tax. In addition, the state taxes corporations that do business in its state a minimum of $700 even if they didn’t declare a profit. How did these guys go broke again? Oh, yea, excessive government spending. That’s the funny thing about budgets, they expand to fill whatever money is available for them. The state ended up spending too much on things like prisons as it the three strikes law caused more people to spend their lives in jail and their “Health and Human Services Department” (which chews up 28% of the budget. What exactly does the Health and Human Services Department do, you might ask? I’m not sure, let’s check.

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Checking My Scorecard

Posted by Preston Poulter in Investing and Financial Doomsday on May 18th, 2009

Every now and then, I make predictions in this blog. Today seemed as good a day as any to take a look at my prior predictions and see how they faired. As a life long Cassandra, I can’t really say that I hate to say I told you so. Honestly, I love saying I told you so.

Specifically, I told you:

  • In November I told my readers that the bonds of Genworth Financial seemed like a good buy. I took my own advice and bought some. They paid over the weekend, realizing me an annualized 20% or so.
  • In January, and many times since, I have repeatedly warned that Dr. Lacy Hunt’s advice to plow money into long term US Treasury obligations was a recipe for disaster. So far this year, the 30-year US Treasury bond is down 20.9%. Ouch!
  • That Barrick Gold was a screaming buy in October of 2008. I loaded up on Barrick at $20.85 a share in November. Last week I sold my Barrick stock for $35.50 a share and took the money and put it straight into GLD. Extra credit: Since that date, GLD (gold bullion) has appreciated and ABX has fallen. Sometimes I just get lucky!
    • That we had witnessed the end of deflation and that this year would see the start of a rampant inflation that would last for years.

    Now, for the longterm prediction that’s the real clincher. Read the rest of this entry »

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