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INFLATION Continues Reducing the POWER/VALUE of Your Money

Wednesday, March 27th, 2024

INFLATION Continues Reducing the POWER/VALUE of Your Money

The latest INFLATION report from the Bureau of Labor Statistics showed the cost of living increased by 0.4% in February (2024). That is the same rate of increase we saw in January (2024).

If this keeps up, INFLATION will go back UP to 4.8% in a year. I’m sure your wallet doesn’t need me to tell you… That’s the WRONG direction.

INFLATION is constantly reducing the purchasing POWER/VALUE of your money. BUT, with the right investments, YOU, ME, WE the ATWWI FAMILY can keep up with – and even “BEAT” – INFLATION to maintain our “ECONOMIC LIBERATION and the “LIFESTYLE” WE DESIRE!!!

In today’s “WIZ” DAILY JOURNAL, I will show you why you need put your money into investments that produce a “GROWING” INCOME to “BEAT” INFLATION… and protect the POWER/VALUE of your money.

According to The Economist, the average price of a “BIG MAC” – just the burger, no fries or drink – in the U.S. today is $5.69.

Ten years ago, the average price was $4.24 – about 25% cheaper.

The “BIG MAC” has gotten a little more EXPENSIVE every year. Over the past decade, the average price has risen by $1.45. If you average it out, that comes out to a 3% INCREASE per year.

BUT, don’t be fooled. More than half of that INCREASE happened over the past three (3) years alone!!!

BEFORE the pandemic, we had years of LOW INFLATION below 2%. Then in 2021, the price of a Big Mac INCREASED 3%. In 2022, it INCREASED another 6%... AND, in 2023, it had another 6% INCREASE!!!

The HIGH INFLATION we have seen recently will quickly REDUCE your buying POWER/VALUE. Especially if you are RETIRED and living on a ”FIXED” income.

Think about it this way…

If you had invested $10,000 into long term 30-year U.S. TREASURYS a decade ago, you would have gotten a yield of 3.55%. That means you would collect $355 each year in INTEREST.

Ten (10) years ago, that would have been enough to buy 83 (Eighty Three) “BIG MACs” each year. Today, it would only get you 62 (Sixty Two) “BIG MACs)… AND that number would keep DECREASING each year.

BUT, FIXED INCOME is not the only option for “INCOME” investors…

What if you had invested $10,000 into McDonald’s stock a decade ago instead???

You would have 103 shares, which paid DIVIDENDS of $3.24 per share in 2014. Ten (10) years ago, that would have given you an income of $324.

That’s slightly LOWER than the income from the TREASURYS. It would buy 78 (Seventy Eight) “BIG MACs” in 2014. BUT, here’s the difference 10 (Ten) years later…

McDonald’s has INCREASED its DIVIDEND every year since. Today, that investment in McDonald’s stock pays $6.68 per share in DIVIDENDS.

So those 103 (One Hundred and Three) shares would give you an income of $688 – enough for 121 (One Hundred and Twenty One) “BIG MACs” this year (2024).

That’s not all…

Over the past decade, McDonald’s shares have nearly TRIPLED in value. Meanwhile, the TREASURY BONDS will still be worth just $10,000 when they mature.

So even though INFLATION means the cost of goods keeps INCREASING, your INCOME can INCREASING, too.

That’s the “POWER” of INVESTING in “RELIABLE” companies that INCREASE your INCOME and COMPOUND your WEALTH!!!

NOTE: I am NOT recommending you invest in McDonald’s right now.

The company has a fantastic business, but its stock is not on sale. It trades at 23x earnings. That’s about 10% ABOVE it’s HIStorical average of 21x earnings.

That’s why I’m staying away for now. But when McDonald’s stock (MCD) price makes it back onto the “VALUE” menu, I’ll be sure to let you know…

 

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

A “PERVERSION” of Finance…Monitor Japan

Tuesday, March 26th, 2024

A “PERVERSION” of Finance…Monitor Japan

The following news headline is why you would have to be “STARK RAVING MAD” to keep your savings in a bank:

“Japan Raises Interest Rates for First Time in 17 Years”

Now, by itself, that isn’t noteworthy. The Federal Reserve and European Central Bank have both been “HAWKISH” over the past two (2) years. Besides, RISING interest rates are good for savers.

The issue is that Japanese rates are STILL “ZERO”. Or to be precise, Japan’s equivalent of the FED FUNDS RATE now has a targeted range of 0% to 0.1%. 

How is it that Japan could RAISE interest rates and yet still have a targeted rate of zero???

BECAUSE, since 2016, Japanese interest rates have been NEGATIVE. Rather than being “PAID” interest, Japanese depositors were “”PAYING” banks to take their money!!! 

NEGATIVE INTEREST RATES are a “PERVERSION” of finance… 

INTEREST is the “PRICE” of money across “TIME”. The compensation you get from delaying gratification to save and investing rather than frittering it away on current consumption. Setting interest rates BELOW zero punishes “VIRTUE” and rewards “VICE”. 

It’s “IMMORAL”!!!

It’s effectively placing a “TAX” on citizens by UNELECTED/SELECTED central bank “TECHNOCRATS”… 

I remember learning about a “WAR” being fought against “TAXATION WITHOUT REPRESENTATION”, but then, that was about 250 years ago.

Indeed, Japan is a world away, and we thankfully never had NEGATIVE ITEREST RATES in America. BUT, we have had the same kinds of people pulling most of the same stunts with the U.S. DOLLAR. 

NOTE: ZERO INTEREST RATES, QUANTITATIVE EASING and, virtually every other “TERRIBLE” idea put into practice over the past 20 years happened in Japan FIRST!!!

“THE LAND OF THE RISING SUN” is an experimental training ground for “BAD” monetary policy, but that hasn’t stopped the Federal Reserve from trying it at home. 

The one thing that BoJ has done this week by essentially keeping conditions ultra-loose with significant wage pressures looming is establish a catalyst for a global systemic risk event. Japan sends a lot of investment dollars out into the world with rates hovering near 0%. If Japanese wage growth eventually spikes inflation, which in turn spikes interest rates, it’s reasonable to think that a lot of those Japanese investment dollars could begin flowing back home and out of U.S. markets. One of the things that severely destabilized the markets in 2022 was the slow response of central banks to rising inflation. It looks like we could be heading down a similar path now in Japan.

When Japanese rates were NEGATIVE, Japanese savers didn’t suddenly decide to blow their nest egg at the mall. Japan’s aging population still saved its cash… BUT they had every incentive to put it ANYWHERE ELSE BUT Japan. Naturally, a lot came across the Pacific Ocean and ended up in the U.S. market, contributing to the “BUBBLE” in asset prices. 

It seems that central bankers have a “POOR” OVERSTANDING/UNDERSTANDING of unintended consequences. 

When ALAN GREENSPAN flooded the market with “LIQUIDITY” following the implosion of hedge fund Long-Term Capital Management in 1998, he set the stage for the mother of all tech “BUBBLES”… which finally burst in 2000. 

When GREENSPAN slashed rates to a then unprecedented 1%, he sowed the seeds of the HOUSING “BUBBLE” of the mid-2000s. 

When that ”BUBBLE” burst and led to the 2007-08 FINANCIAL CRISIS, Greenspan’s successors BEN BERNANKE and JANET YELLEN LOWERED rates to ZERO and introduced the words “QE INFINITY” into our collective vocabularies. 

That set the precedent for the pandemic response in 2020… in which JEROME POWELL again LOWERED rates to ZERO and dumped $5 trillion in “LIQUIDITY” into the capital markets. We know how that ended. Years later, we are still dealing with “INFLATION”. 

DO YOU DETECT A PATTERN HERE???

The FED overreacts to a “PERCEIVED” problem… giving us a “SOLUTION” that sows the seeds for the next “CRISIS”… which will require the FED to step in yet again. 

Is it any wonder that investors are looking for DOLLAR “HEDGES” elsewhere???

If these people are “SAFEGUARDING” the DOLLAR, as I said, YOU, ME, WE the ATWWI FAMILY have to be “DELUSIONAL”, “CERTIFIABLY INSANE” and/or “STARK RAVING MAD” to keep ALL of our savings in U.S. banks.

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

 

A “CLEVER” Way To Invest Like “PRIVATE EQUITY”

Monday, March 25th, 2024

A “CLEVER” Way To Invest Like “PRIVATE EQUITY”

THIS is how WEALTHY people invest—and collect yields up to 12.5%...

PRIVATE EQUITY (PE) is usually reserved for the WEALTHY. It’s the time-honored practice of “MILKING” CASH from perfectly good businesses!!!

BLEED’EM DRY AND KEEP THOSE DIVIDENDS COMING!!!

The minimum buy-in for most PE funds???

From $500,000 to a cool million bucks or more. This lucrative pastime isn’t meant for the “EVERYDAY” man/woman.

In this ATWWI “WIZ” DAILY JOURNAL, I am going to present to you a “CLEVER” wayto invest like “PRIVATE EQUITY”…

BUSINESS DEVELOPMENT COMPANIES (BDCs) are PE-esque companies. Many trade publicly and YOU, ME, WE the ATWWI FAMILY can buy them just like regular stocks. For what it’s worth, many BDCs trade for reasonable share prices, between $20 and $30 or so.

They tend to pay “BIG” DIVIDENDS… the three (3) BDC’s I am present to you in this ATWWI “WIZ” DAILY JOURNAL yield between 10.7% and 12.5%.

PLUS, they trade at a DISCOUNT to their BOOK VALUES. “FREE LUNCH” valuations, in other words.

Congress created BDCs in 1980 to increase small business lending. If you have never tried to get a bank loan for a small business—well, it’s nearly impossible. Enter BDCs, who receive a TAX BREAK from Uncle Sam provided they pay 90% of their TAXABLE INCOME as DIVIDENDS to shareholders.

BDCs are not quite the piranhas that their PRIVATE EQUITY (PE) cousins are. BDCs offer DEBT, EQUITY, and other FINANCING OPTIONS to burgeoning businesses. And given that BDCs tend to invest in dozens if not hundreds of these companies at a time, they effectively become “DE FACTO” PRIVATE EQUITY FUNDS!!!

The “CATCH”, of course, is that EXTREMELY HIGH YIELD” tend to be fraught with “RISK”. BDCs are a difficult business even in accommodative times, which means we can’t just “GREEDILY” lap up every BDC yield there is. We have to be even more “DISCRIMINATING” than usual and only pick the “SAFEST”, “SUREST” names in the bunch.

Below, I present to you three (3) BDCs yielding an “OUTSTANDING” 10.7% to 12.5% to demonstrate how some BDCs can ANCHOR our portfolios, while others will simply drag us down.

Bain Capital Specialty Finance (BCSF)
Dividend Yield: 10.7%

Bain Capital Specialty Finance (BCSF) is a diversified BDC that provides a variety of financing solutions to 137 portfolio companies across 31 different industries. Unlike many BDCs, BCSF also offers some INTERNATIONAL exposure—while it’s predominantly invested in U.S. companies, it also includes EUROPEAN and AUSTRALIAN companies in its portfolio.

The lion’s share of BCSF’s investments are “FIRST-LIEN” in nature—in addition to 64% exposure directly through “PORTFOLIO” companies, it has another 14% or so exposure to “FIRST-LIEN” DEBT through other investment vehicles. The rest of its assets are sprinkled among SECOND-LIEN” DEBT, SUBORDINATED DEBT, EQUITY, and other FINANCING OPTIONS.

BCSF has a sturdy financial base. While it does have some $1.6 billion in “DEBT”, none of that is set to mature until 2026. It also has INVESTMENT-GRADE RATINGS from MOODY’s, FITCH and, KBRA.

DIVIDEND coverage has IMPROVED as of late, also. Even after CUTTING its PAYOUT from 41 cents per share to 34 cents in 2020, its coverage was stuck around breakeven for most of the time between 2019 and 2020.

BUT, BSCF has since INCREASED its DIVIDEND three (3) times, to 42 cents per share—eclipsing 2020 levels—and coverage has “ROCKETED” to the 120%-130% range over the past two (2) years.

That would make its 11% DISCOUNT to NAV all the tastier if it were not for “LACKLUSTER” portfolio performance. As of the end of 2023, three (3) investments were on “NON-ACCRUAL”, representing about 1.2% of the portfolio at fair value. And the company has for years underperformed BDCs as a whole—not exactly a high bar to clear in the first place.



CION Investment (CION)
Dividend Yield: 12.5%

CION Investment (CION) is one of the cheapest BDCs on the market, at a price-to-NAV of just 0.68x. In other words, YOU, ME, WE the ATWWI FAMILY are able to “BUY” its “NET ASSETS” for roughly a third LESS than what they are worth.

It’s also one of the newest BDCs—it went public by direct listing in October 2021—so it’s possible that we are getting a great DISCOUNT on a company Wall Street has yet to figure out.

CION is an EXTERNALLY managed BDC that typically invests around $30 million in companies with $25 million to $75 million in EBITDA. This capital can be used for any number of reasons—GROWTH, ACQUISITIONS, REFINANCING, MARKET EXPANSION, and so on.

Currently, CION has roughly $2 billion in assets invested across 109 portfolio companies. Most of those investments are in “FIRST-LIEN” SENIOR SECURED DEBT (86%), with another 11% in “EQUITY” and, the rest peppered across “SECOND-LIEN” and UNSECURED DEBT, as well as COLLATERALIZED SECURITIES and other products.

A good 80% of the portfolio is “FLOATING RATE” in nature. While its companies are spread out across a few dozen industries, BUSINESS SERVICES and HEALTHCARE are its only DOUBLE-DIGIT exposures.

CION has INCREASED its DIVIDEND at a decent pace since going public, AND it also pays out size “SPECIAL DISTRIBUTIONS” as well. That results in a “FANTASTIC” HEADLINE YIELD of 12.5% that improves to 14.3% when you account for the past year’s worth of “SPECIALS”.

BUT, CION is putting its CASH to work in another interesting way (for BDCs):BUYING BACK SHARES.

And why not???

Given how CHEAP the stock is, it makes far more sense/cents to REPURCHASE SHARES than it does to ISSUE MORE SHARES TO RAISE CAPITAL—a tactic many overvalued BDCs employ.

So far, the results say a lot of “POSITIVE” things about how CION does business.

It’s hardly perfect. EXTERNAL MANAGEMENT means CION investors are absorbing STEEPER FEES than with INTERNALLY MANAGED BDCs. Three (3) years doesn’t make for much of a track record. BUT, CION is giving a lot for investors to “MARINATE” on after less than three (3) years as a publicly traded stock.

 

 

SLR Investment (SLRC)
Dividend Yield: 10.7%

SLR Investment (SLRC) is a self-described “YIELD-ORIENTED” BDC that invests predominantly in “SENIOR SECURED” LOANS of PRIVATE MIDDLE MARKET companies.

Its overall portfolio can be broken down into four (4) parts: ASSET-BASED LOANS (32% of assets), EQUIPMENT FINANCING (32%), CASH-FLOW LOANS (dubbed “SPONSOR FINANCE”,” 24%), and, LIFE SCIENCE LOANS (12%). These are spread across some 790 different issuers across 110 industries—as SLR points out, that results in an average exposure of just 0.1% per issuer.

The CONSERVATIVE management style could be appealing to investors looking to tamp down “RISK”. Also an upside in the present moment is its sensitivity to RATES—roughly a third of its portfolio is FIXED-RATE in nature (most of that coming from EQUIPMENT FINANCING), meaning that SLR investments will be less vulnerable to the FED’s inevitable “EASING” than many other BDCs.

ALSO, providing some “SAFETY” is SLRC’s “VALUE PROPOSITION”—shares currently trade at a LARGE 16% DISCOUNT to NAV.

BUT it’s difficult to tell whether SLRC is a “BARGAIN”, or just “CHEAP”.

For one, SLR Investment is EXTERNALLY MANAGED (by SLR Capital Partners); often, EXTERNAL MANAGEMENT means HIGHER MANAGEMENT and INCENTIVE FEES, which ultimately place a “DRAG” on investors’ returns. That’s somewhat easy to swallow when management is OUTPERFORMING; not so much when it’s not.

HOWEVER, while GENEROUS, SLRC’s PAYOUT deserves a word of “CAUTION”. The company struggled to cover its DIVIDEND for much of a three (3) year period between late 2019 and late 2022. It has successfully covered its payout for each of the past five (5) quarters, but still at a much thinner margin (just a few percentage points) than the rest of the BDC space.

Less worrisome BUT still worth mentioning: SLRC actually “FLIRTED” with a MONTHLY PAYOUT for a little more than a year, between 2022 and 2023, BUT REVERTED BACK to QUARTERLY DIVIDENDS right before the start of 2024.

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

“CRITICAL” Factors About ANNUITIES

Friday, March 22nd, 2024

“CRITICAL” Factors About ANNUITIES

When investors want higher yields than CASH and “FEAR” what RISING rates will do to BONDS, they often consider putting the “SAFE” or “FIXED-INCOME portion of their portfolio in certain types of ANNUITIES.

Many critics of ANNUITIES shorten their advice to, “Don’t buy annuities.”

In this “WIZ” DAILY JOURNAL, I will focus on three (3) types of ANNUITIES.

DEFERRED “FIXED” ANNUITIES: These are a ”PLAIN VANILLA” ANNUITY. You make a deposit with an insurer, usually a lump sum but periodic deposits also are possible. Each year the insurer credits a return or yield to your account.

Typically, the yield is determined by the insurer based on its expected investment returns, expenses, and other factors. Yields on deferred fixed annuities usually are just about the yield on intermediate investment-grade or mortgage bonds. There usually is a modest “GURANTEED” minimum yield. The interest credited to your account COMPOUNDS tax-deferred until you withdraw it.

You are likely to have ”LIMITED” access to the money in the ANNUITY. Most insurers “LIMIT” withdrawals to 10% of the principal per year without penalty for at least a period of time. You probably won’t be able to take your money back or switch it to another insurer’s annuity without “PENALTY” for at least seven (7) years.

Insurers offer optional features on DEFERRED FIXED ANNUITIES, including having more access to your money. BUT, those features generate HIGHER FEES and REDUCE YOUR RETURNS.

The ADVANTAGES of a DEFERRED FIXED ANNUITY are a HEALTHY YIELD that INCREASES over time IF MARKET RATES RISE, TAX DEFERRED COMPOUNDING and PRINCIPAL SAFETY. Of course, your account’s value will NOT DECLINE as interest rates RISE. The main DISADVANTAGE is RESTRICTED ACCESS TO YOUR MONEY!!!

DEFERRED “INDEXED” ANNUITIES: In “CONCEPT” these are similar to DEFERRED FIXED ANNUITIES. The main DIFFERENCE is that with an “INDEXED” ANNUITY the return on your account is determined by reference to an “EXTERNAL INDEX”, such as a STOCK MARKET INDEX. With a”FIXED” ANNUITY, the INSURANCE COMPANY sets your yield each year.

With an “INDEXED” ANNUITY, you DO NOT earn the full return of the index. Instead, a “FORMULA” determines the amount credited to your account based on the ”PERFORMANCE” of one or more “INDICES”.

There are four (4) main “FORMULAS” and “VARIATIONS” for each “FORMULA”, but we don’t need to go into details here. On top of that there might be a “LIMIT” to the amount of the index return you receive, known as the “PARTICIPATION RATE”.

For example, your account might be credited 70% of the return calculated by the “FORMULA”. Plus, there’s usually an “ABSOLUTE LIMIT” on your annual return, known as a “CAP”, that usually is 8% to 10%.

There are a lot of differences between different FIXED INDEXED ANNUITIES (FIAs) on all these details. The result is that when the “INDEX” RISES 12%, some FIAs are credited with a 5% return while others receive 10% and a many receive something in between.

An FIA has a “GUARANTEED” minimum return, which is 0% for most these days. So, you are “GUARANTEED” not to lose your “PRINICIPAL” even if the index does. Then, you have the potential of earning MORE than a DEFERRED FIXED ANNUITY if the “INDEX” does well, though you could earn LESS than a DEFERRED FIXED ANNUITY if the “INDEX” does not do well.

There are literally hundreds of different ”FORMULAS” for crediting interest to FIAs. Visit this link for a comprehensive list of FIAs and the rates that they currently offer.

As with a DEFERRED FIXED ANNUITY, there are “RESTRICTIONS” on ACCESS to your money. If you want to withdraw all your money or transfer it to another insurer’s annuity within seven (7) years, you will pay a “PENALTY”. You might have access to up to 10% of your account each year without “PENALTY”.

The FIAs also can have a number of optional provisions that offer more access to your money and other features such as; LIFETIME INCOME PAYMENTS and DEALTH BENEFITS.

IMMEDIATE ANNUITIES: The DEFERRED FIXED ANNUITY and DEFERRED INDEX ANNUITY generally are for money you are not planning to spend in the next seven (7) years or longer. When you already are retired and drawing income from your BOND investments, these might NOT be the best replacements for BOND. Instead, you should consider an IMMEDIATE ANNUITY.

These are the “CLASSIC” ANNUITIES. You deposit money with an insurer, and it begins making “GUARANTEED” regular payments to you. The payments last for the rest of your life, the joint life of you and your spouse, or a guaranteed term of years, whichever you select. The payments are NOT purely income. They are both INCOME and a return of your PRINCIPAL. Once you pass life expectancy, payments are all INCOME.

The best multi-year guaranteed annuity (MYGA) rate is 5.60% for a 10-year surrender period, 5.80% for a seven-year surrender period, 5.75% for a five-year surrender period, 6.00% for a three-year surrender period, and 5.25% for a two-year surrender period.

You have “LIMITED” or “NO” access to money beyond the “GUARANTEED” annual payments, depending on the annuity you select, so you should have other assets or income to tap in case of unexpected spending. The payments VARY considerably from insurer to insurer. Shop CAREFULY!!!

All ANNUITIES are a “TRADE OFF”. You transfer to the insurer the “RISKS” of low (or negative) investment returns, unexpected expenses, and, in the case of an IMMEDIATE ANNUITY, a long life. In return, you have “LIMITED” access to the money on deposit with the insurer and give up the potential of earning a HIGHER return with that money. In today’s investment world, you also transfer to the insurer the “RISK” that rising interest rates will reduce the value of BONDS.

Because of the “TRADE OFFS”, there are few people who should put ALL or MOST of their money in ANNUITIES. But the right annuities can be a valuable addition to the nest eggs of some people.

PEACE & BLESSINGS
Kenneth Reaves, Ph.D.

The Only Defense Against the Investing “LIES” You Have Been Told

Thursday, March 21st, 2024

The Only Defense Against the Investing “LIES” You Have Been Told

I am a enjoy studying “PHILOSOPHY”…

I think it should be taught at the high school level, not to push one belief set over another, BUT to teach the ART of “THINKING”!!!

Don’t get me wrong…I am not a “LEARNED” scholar who writes “DEEP”, “COMPLICATED” papers on the topic and can lecture at length on the lives of the ancient Greeks, both “MAJOR” and “MINOR”.

I am just a “STUDENT” of READING and THINKING about the meaning of it “ALL” and how it “WORKS”. I am not the only investor who is enthralled by “PHILOSOPHY”.

It has helped some of the greatest minds in investing, and me as well, to avoid the “STORIES” and “LIES” we are told about INVESTING and the MARKETS…

For instances, BILL MILLER majored in “PHILOSOPHY” at Johns Hopkins University and donated $75 million to the Johns Hopkins University Department of Philosophy in 2018.

While MILLER studied “ECONOMICS” and “FINANCE” as an undergraduate at Washington and Lee University, he took graduate courses in “PHILOSOPHY” in the Ph.D. Program at Hopkins.

GEORGE SOROS, whether you love him or you hate him, is one of the “GREATEST” investors and traders of “ALL TIME” studied “PHILOSOPHY” as part of his degree at the London School of Economics.

He has often cited the work of Austrian philosopher KARL POPPER as one of the “ARCHITECTS” of his successful career.

CARL ICAHN has a “PHILOSOPHY” degree from Princeton.

BOAZ WEINSTEIN of Saba Capital, one of the best fixed-income investors of our time, graduated with a “PHILOSOPHY” degree from the University of Michigan.

I have read many of the “PHILOSOPHERS” considered to be the “GREATEST OF THE AGES”. I have read more than a few of the MINOR “PHILOSOPHICAL” GREATS.

It may come as a surprise to you that one of my favorite “PHILOSOPHER’s”philosopher is a “PHYSICIST”…

RICHARD FEYNMAN worked on everything from the Manhattan Project to the Challenger explosion inquiry. He received a Nobel Prize for his work in “QUANTUM ELECTRODYNAMICS”, which I am told altered how scientists OVERSTAND/UNDERSTAND the nature of WAVES and PARTICLES.

His class lessons at Caltech were published as the “FEYNMAN LECTURES on PHYSICS” and are considered a “CLASSIC” by PHYSICISTS and MATHEMATICIANS.

I confess to OVERSTANDING/UNDERSTANDING only a small portion of his PHYSICS work. It is his thoughts on LIFE, SCIENCE and the meaning of it “ALL” that resonate with me. His core beliefs were wrapped around the general concepts of TESTING EVERYTHING and not worrying about what other people think.

Many of you right now are wondering why you should care what I think about “PHILOSOPHY”, “SCIENCE” or, anything else not directly related to getting “P.A.I.D.”

The answer is simple but challenging…

Let’s start with the fact you are being “MISLED”…CONSTANTLY!!!

Wall Street has one set of “LIES” it wants you to believe. Most of the “ACADEMICS” that research markets have another. The “MEDIA” has yet another story to tell.

Much of it is designed, consciously or not, to separate you from as much of your money as possible as painlessly as possible.

All of it is designed to preserve the careers, paycheck, and wealth of those spinning the yarn.

Your only protection against these stories, well told and carefully defended, is a “PHILOSOPHY” derived from empirical testing ideas and systems.

You need to know what works and what does not work in the world of investing. You need core, unshakeable beliefs about investing that accomplish two (2) objectives.

First, these beliefs allow you to ignore the cons, grifts, and fairy tales that will be used to empty your wallet.

Second, they deliver the results you need to provide the amount of cash you need to live the life you want to have.

This is where FEYNMAN’ advice to be wrong as quickly as possible because that is the only way to uncover that small handful of ideas that can accomplish those two objectives.

You have to ELIMINATE all the wonderful-sounding concepts that simply DO NOT WORK!!!. The path to investment success is not as complex as Wall Street, and the collected “PUNDITS” and “PREACHERS”, might have you believe.

It is not, however, an easy path at all times. You have to hold more than one idea in your head at once and OVERSTAND/UNDERSTAND the concept of ever-changing cycles and how it applies to your core beliefs and philosophy.

I have spent the last 27+ (twenty seven) years developing the core philosophy of investing that drives my work today and my OVERSTANDING/UNDERSTANDING of the law of “EVER-CHANGING CYCLE”.

That experience, and the fact that I don’t care about what I’m “SUPPOSED” to THINK, brings me to the conclusion that the two (2) best paths to building the WEALTH needed to get you where you want to go are SMALL-CAP STOCKS and HIGHER/YIELDING income-producing investments.

BOTH paths have rigid rules for “SUCCESS”. BOTH contradict almost everything you hear from Wall Street and the financial media.

PEACE & BLESSINGS

Kenneth Reaves, Ph.D.

The Ask The Wiz Wealth Institute is not an investment advisor. We strive to be educational and informative community servants.
 

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