Finance Trends Letter

Investor Lauren Templeton shares some life wisdom and investing lessons from her great-uncle, Sir John Templeton in this VIC 2012 video.  By way of background, John Templeton was a pioneer of global share investing who founded the Templeton Growth fund in 1954. As his wealth increased, he also became known for his philanthropic efforts and writings. In the 1960s, he renounced his U.S. citizenship (an increasingly popular move among the rich of late) and continued to live in the Bahamas as a Bahamian citizen. In her talk at the Ben Graham Centre for Value Investing, Lauren Templeton shares some insights on Sir John's investment philosophy and his life. A few notable lessons and quotes :  1 . Born in Tennessee, Templeton was an excellent student who attended Yale and Oxford. While at Yale, young John found he had to work to pay for a large part of his schooling. His skill with probabilities helped him earn a good part of the money playing poker.  2 . After stu...

"It's always been my idea to make a few thousands early in the game, and then quit for as long as they last..." - Cary Grant , Holiday (1938).

Bank fees and ultra low interest rates continue to hit US savers hard. Bloomberg has the story in, "Savers Pay Banks to Keep Cash as Rates Dip, Fees Rise" : " It’s getting tougher for U.S. savers to find a bank where they won’t end up paying to keep their money safe. The average interest paid on savings, checking, money-market and certificate of deposit accounts fell to 0.99 percent in July, the first dip below 1 percent in a decade, according to researcher Market Rates Insight. Banks also have been raising fees and adding new ones, most recently in response to the financial-services overhaul bill that became law July 21. The result is that an increasing number of savers are seeing their deposit earnings eaten up by charges. That’s frustrating people like Ken Ward, who recently passed on a savings account with a 0.01 percent interest rate at the Chase bank branch near his home in Wantagh, New York..." As if years of hyper-spending and livin...

Dr. Brett Steenbarger at TraderFeed sparked some interesting discussion this weekend with his post on, "Breaching the Social Contract" . Dr. Brett offers up some examples of this breach of trust here: " Consider the following situations that I have encountered in recent weeks: * A young lady in college is suddenly told by her parents that they no longer have the funds for her education. She will have to go to work to come up with the tuition. She cannot find work and doesn't know how she will graduate; * A long-time employee of a large company is downsized to a part-time job and will be losing his benefits. He doesn't know how he will afford health care for his family. He heard about the earnings possible to traders and is considering applying for a training program that will tap him of much of his savings; * A retired couple learns that their investment adviser has put them in volatile, high load funds that were initially described as conservative. They are stun...

Bernard Madoff has been sentenced to 150 years in prison for defrauding investors of at least $13 billion. We all pretty much know the details of his crime by now, given the months-long media coverage devoted to Madoff's decades-long ponzi scheme (which many refer to as the biggest ponzi scheme in history). We won't rehash all the details here. Instead, let's focus on how this giant fraud against investors was uncovered. Madoff confessed to his crime back in December when adverse market conditions led to a wave of redemption requests from investors. In spite of one whistleblower's attempts to shed light on Madoff's fraudulent scheme (essentially handing the agency an investigative case file), and repeated examinations into Madoff's business by the SEC and other regulatory agencies, the fraud was never revealed. That is, until Madoff was forced to reveal it. So what does the SEC concern itself with if it's not actively pursuing cases against the largest, ...

I was participating in Stocktwits' MacroTwits discussion last night, when someone brought up the idea that inflationary policies by the Fed were a necessary "cure" for a looming deflation. Although I've tuned out most of the mainstream discussion on "inflation vs. deflation" and related debates, I have heard and learned enough in the past to know that the fear of deflation is a widespread phenomenon in modern America (and probably throughout the developed world). Considering the high amounts of debt carried at all levels of our society (personal, government, corporate), this fear is very understandable. Deflation , a decrease in the supply of money and credit, results in an increase in the value of money in circulation. In a deflation, debtors must pay back loans to their creditors with money that is steadily increasing in purchasing power. The onus is on the debtor to pay back his loan with money that is more valuable than the principle he was origi...

The Rolling Stones had an Exile on Main Street while dodging out on the high-tax environment of their home country (the UK) in the early 1970s. Their time in the South of France was (sometimes) well spent; the group's musical work at Keith Richards' villa in Nice resulted in a good deal of material for the aforementioned Exile , one of the best records the Stones ever made. Unfortunately, for many middle-class Americans, that type of creative holiday in the sun may never come. High taxes, inflation eroding away the value of retirement benefit payments, and a negative "wealth effect" from falling house and stock prices may combine to level this facet of the American Dream. If we can shift gears from the Côte d'Azur and back to middle America, we'll let Gary North explain why Elkhart, Indiana, the RV capital of the world, is a metaphor for the "lost lifestyle" of American retirees : "Over the last 18 months, Americans over age 55 have suffered a ...

I don't want to start off this week's posts with the usual comparisons of our current economic climate to the Great Depression, but we do have some news out acknowledging the onset of a notable US recession. From FT, "US faces worst recession in 26 years" : "The US economy appears to be plunging into what many experts believe will be its worst recession since 1982. Senior officials at the Treasury and Federal Reserve are confident that the rescue plan for US banks will succeed in preventing a financial system meltdown and ensure there will not be a repeat of the Great Depression. But they know that a sharp economic downturn is already baked in the cake. They do not,however, know how deep or protracted it will be. The focus of concern is shifting from the markets – although these remain dangerously stressed – to the wider economy, where the consumer finally appears to be cracking. The Fed and Treasury were expecting the economy to weaken but not as rapidly as it h...

Warren Buffett goes to Europe, private equity jaunts through Africa, and investors venture into Cambodia. All this and much more in our, "Features of the week" . 1. Government's "numbers racket" is about to blow up in our faces. 2. If inflation is low, then why are bond prices falling and yields rising? 3. The market is beginning to think that the Fed will raise interest rates . 4. Africa investment pioneers in private equity initiative. 5. Jim Rogers and Marc Faber advise private-equity investors in Cambodia . 6. The oil market's historic swing to contango : has peak oil "tipped"? 7. Running on empty? Fears over world oil supply move into the mainstream. 8. Gasoline near $4 shortens Memorial Day trips. 9. Backlog of unsold US homes hits record. 10. "Inside the Middle Class: Bad Times Hit the Good Life" (Pew Research). 11. FT Video: Chad Hurley on the future of YouTube and online video. 12. David Gordon on the so-called "Libe...

Today we complete our series on retirement planning with a look at the final segments in Financial Sense Newshour's recent "Planning for Retirement" broadcasts. Part 1 of our post series gave an overview of the current global Boomer retirement wave, and an intro to the first part of FSN's "Retirement" programs. Part 2 focused on the the second part of the FSN broadcasts, and the lessons given on sound retirement budgeting and management of expectations. Now in Part 3, we'll look at the final segments in FSN's "Planning for Retirement" special and wrap up all the program links and transcripts in one easy to reach place. Plus, we'll add a little bit of wisdom to our discussion of retirement, courtesy of The Financial Philosopher . Everything you hear and read in these programs, transcripts, and posts is derived from the personal experience and wisdom of the authors and program hosts. My knowledge in this area of personal finance is ...

In Part 1 of our "Planning for Retirement" post series, we started with a brief overview of the Baby Boomber retirement schedule and the problems and changes that could arise out of this huge demographic shift. We also looked to the retirement wisdom imparted by investment manager and Financial Sense Newshour host Jim Puplava, and his co-host John Loeffler, in their recent FSN radio broadcast, "Planning for Retirement - Part 1" . Today we'll continue with part two of the FSN radio broadcasts . In this segment, Jim and John continue their discussion of mass Boomer retirement, while emphasizing the need for sound budgeting and planning. An important part of retirement planning would come under the heading of "expectations management." According to Puplava, many retirees are already starting to see some shocks from the falling values of their homes and investment portfolios. As a result of this, some current and future retirees may feel the urge to take ...

Back in April, the Financial Sense Newshour produced a series of program segments devoted to the issue of retirement planning. Today we're going to look at the first installment of FSN's retirement special, and guide you to the archived broadcast link and a written transcript of this program. But first, a quick overview. Why is retirement such an important topic? Retirement is currently a very big issue not only in America, but in other developed nations as well. These countries face a demographic overhang of "baby boomers" facing retirement, and there is no shortage of news stories and articles covering this trend. How will these nations deal with the structural changes taking place as a result of this mass retirement? Are individuals in North America, Europe, and Japan ready for this shift? Are Americans better prepared or less prepared for retirement than their counterparts in other nations? A recent Financial Post article entitled, "Ill-prepared spendthrift...

What are you investing in? That's the current topic of discussion over at the Mises Institute blog. Lots of responses so far, too, especially for such a personal question. It seems that a lot of people are willing to discuss their money and personal finances with openness these days, at least that's what I've noticed on the internet. And it's not the usual cocktail party chatter of, "I just got a tip on this great stock". I mean, people are talking full asset allocation here, which must account for a large chunk of their personal savings and investments. Interesting to note how willing some people are to discuss personal matters these days. Maybe some of you would like to share some personal investment strategies here as well. I'm all for it; be as detailed or as nonspecific with the information as you like. Some of our readers might have some interesting ideas or valuable wisdom to share.

Microsoft makes an unsolicited offer for Yahoo!, dealing with recession, and a few words with famous investors Jim Rogers and Julian Robertson. Coming up in our, "Features of the week" . 1. Microsoft makes an unsolicited $44.6 billion offer for Yahoo! in an attempt to challenge Google's search dominance. 2. Jim Rogers speaks with Bloomberg about commodities and the reckless Fed, who are "debasing the currency" and making the same mistakes that the Japanese have made. 3. Ahh...politics. After bickering back and forth for weeks, Obama and Clinton say, "let's be friends" . The Democratic candidates have plotted a change in strategy and now wish to highlight the incessant bickering between Republican frontrunners. 4. Tiger's Julian Robertson roars again . Fortune profiles the retired hedge fund star and his recent success out of the limelight. 5. Two billionaires describe our outlook . Lamont Trading Advisors match up with George Soros and Julian...

Warren Buffett, that enlightened king of billionaire investors, has voiced his approval for the estate tax (or "death tax" as it's commonly known) and is calling on Congress to maintain the tax, claiming its repeal would be wrong. From, "Buffett says Estate-Tax Repeal Would Benefit Richest" . Warren Buffett called on Congress to maintain the estate tax, saying that plans to repeal the levy would benefit a handful of the richest American families and widen U.S. income disparity. Buffett, the billionaire chairman of Omaha, Nebraska-based Berkshire Hathaway Inc., told the Senate Finance Committee that advocates of repeal were ``dead wrong'' to call the levy a ``death tax.'' It would be more appropriate to call it a ``death present,'' said Buffett, 77, who is the third-richest person in the world, according to Forbes Magazine. ``A meaningful estate tax is needed to prevent our democracy from becoming a dynastic plutocracy.'' And now,...

Commodity index investment products are helping mainstream investors ride the bull market in commodities. And as Bloomberg reports, this year the indexes have outperformed the leading commodity focused hedge funds. Excerpt from, "Calpers beats Pickens as Commodity Indexes Clobber Hedge Funds" . T. Boone Pickens, the billionaire oil trader who predicted crude's rise to $100 a barrel, is lagging behind commodity-index investors for the first time since 2003. Even California Public Employees' Retirement System, the 75-year-old pension fund that ignored commodities until eight months ago, is beating Pickens. Calpers invested in the Standard & Poor's GSCI Index, up 32 percent this year, while Pickens's BP Capital fund rose 22 percent. From Dwight Anderson's Ospraie Management LLC to Global Advisors LP, commodities hedge funds failed to anticipate the 58 percent advance in oil and 31 percent gain in gold that powered indexes to their highest levels in two de...

This is something I wanted to post ahead of tomorrow's "Features of the week" update. If you're interested in understanding the true nature of inflation and how it originates, read on. Over the past few weeks, Jim Puplava and the rest of the Financial Sense Newshour team have devoted an hour long segment of their program to a discussion of the causes and effects of inflation. In a multi-part program segment called "Dying of Money" (a nod to the Jens O. Parsson book of the same title), Jim and his co-host, John Loeffler, take a look at the current global inflation and try to put things into perspective by examining the historical patterns of past inflationary eras. What is the cause of inflation? Throughout history, we've seen that inflation has been brought about as a result of undisciplined money creation. No matter what excuse or rationalization lies behind the running of the money printing press, experience shows us that the results are almost alway...

Article from todays Wall St. Journal on choosing a financial planner. Plus, what to do in the event that your current financial planner retires or sells his business to a larger company. From , "Advisor turnover roils investors". When Jerry Roberts got news that his longtime financial planner was retiring and selling his practice to a larger company, "it was very unnerving." "I very carefully chose my original planner," a sole practitioner in the Robertses' hometown of Indianapolis. "I was cognizant of his investment philosophy, his range of capabilities, and his past experience. I didn't know anything about the new firm coming on," says Mr. Roberts, a 64-year-old retired bank officer. Like the Robertses, a growing number of people who have spent years building a relationship with a trusted financial adviser are having to start over again with someone new. Planners are getting older -- the average age is 55, and nearly a third are over 6...

I'm sure by now you've seen or heard Ben Bernanke's latest references to the global "savings glut" , the phenomenon that is supposedly responsible for the fabulous demand for U.S. debt and low interest rates. For those who are in the dark, here's a quick refresher, courtesy of Bloomberg: Federal Reserve Chairman Ben S. Bernanke said the ``global saving glut'' is still helping to keep interest rates low, and they may not rise much in the event that the pool of excess capital dwindles in coming decades. While theory suggests that yields, adjusted for inflation, would rise as saving diminishes, ``factors other than the saving- investment balance affect long-term interest rates,'' Bernanke said in a speech in Berlin. ``We are again reminded of the need to maintain appropriate humility in forecasting.'' Nations such as China have invested the proceeds of trade surpluses in U.S. Treasuries, driving yields lower. China has a record $1.3 tril...