Updated Thoughts of a Former Wall Street Whiz Kid

Posted by on March 15, 2016 - 9:29 am

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On April 2nd, I shall turn 60 years old. Hoping physically and mentally 60 is the new “50,” I hope to use the upcoming “Holy Week” as a time for reflection both personally and on the world today. Sadly, I’m afraid much of what I’ve written and spoken about economically, socially and politically these last couple of years is unfolding before our eyes.  Believe me, I take no joy in being so right about what has become so wrong, but as I’ve stated for many years now:

“There are only two types of commentators on Wall Street; those who say what they think, and those who say what they think you want to hear … and it sells.”

I never want to be part of the latter, even though it does indeed negatively impact my income!

Overall – Throughout 2015 and into 2016, I’ve hammered home a belief that America had entered its worst ever economic, social and political period. I truly believe recent events have clearly shown the social and political aspects of what I spoke of, and we’re just experiencing the crossing of the economic threshold into this upheaval.

I’m personally not a fan of Donald Trump (the one person I would vote for, Ben Carson, has dropped out of the race), but I completely understand and appreciate what many of his supporters feel he represents. Unlike them, I’m not prepares to support someone just because we’re in the same ballpark and all others appear way out in left field.

But I do believe his run for the Presidency has brought to the surface much of the issues I spoke of that were swept under the carpet for years. I often wrote about many of the issues that are now front page news and what I perceived they would lead to. I wish I had to pull a Fonzie; but as each day passes, more and more evidence supporting my stance surfaces.

U.S. Stock Market – First and foremost, I need to point out (mainly to the many new readers of my blog) that yours truly left the “Soothsayer” racket and even added the word “former” to the third edition of his book, “Confessions of a Former Wall Street Whiz Kid.”  My “observations” of markets are just that and should definitely not be treated as investment advice.

Besides coming to my senses and realizing only God truly knows the future, I finally totally bought into what my financial mentor has been telling me for years – the vast majority of money managers underperform low-cost Index Funds (about 80% equity fund managers and 85% bond fund managers underperform). And of the small minority who do outperform one year, almost all don’t do so the following year. So after three decades of being both the needle in the haystack who did, only to fall flat on his face in others, I now comment on financial markets strictly for “entertainment” purposes.

2015 was the year I felt should be used to greatly lower the far too much exposure average investors have to general equities. I expressed a belief that 2016 and the foreseeable future would see below average equity returns due to ever increasing bearish fundamentals and technical reasons.

While the “Don’t Worry, Be Happy” crowd (that makes up the vast majority of those who work in the financial services industry) are making much of the recent rise off the lows of the year, the net results for the year are we’ve gone nowhere fast. At times, people shall give their left arm just for that versus more of what took place at the beginning of the year, IMHO.

U.S. Bonds – No reason to change my view outside of corporate bonds, bonds themselves are the far less evil versus equities.

Gold – I’ve received a fair amount of accolades lately for recognizing the birth of the new gold bull market. Before you or I get trapped into thinking I should go to the pawn shop and buy back my wizard hat, watching this interview of me from back in 2012 should kill any notion of doing such a dumb thing. You could make one heck of a big omelet from all the egg on my face the last couple of minutes in that interview.

Oil – Funny thing, my commentary on oil has been pretty spot-on as well. Perhaps the key to being a successful soothsayer is not to be one.

I spoke about oil this past Friday on my Relevant Radio interview.

And finally, while I always thought my little pamphlet on Kids and Cash was critical for parenting, this short video points out what may have become just as important (if not more).

Please Note – Beginning with Palm Sunday, I try to focus mostly on Holy Week and not work. There shall be no finance-related posting during that time frame and very limited time in the office until Holy Thursday, when we shut completely down until Easter Monday.




Posted in: Matters of Finance
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