An Investment Experience

I have been listening to Bob Brinker on KABC radio for years. His program is called Moneytalk. He says he started his weekend investment show about 20 years ago. It is a listener call in show where he answers questions about investing in stocks, bonds, and other kinds of investments from real estate to whole life insurance policies.

I became so impressed with his advice that I started subscribing to his newsletter two years ago. I tracked his recommendations (that are not discussed on the radio but are provided in his newsletter) compared to my own investment ideas. However I never actually acted on most of his recommendations until this past July 2007. I decided to do that because I was not happy with my progress in investing. My decision was a serious error.

In his July 2007 newsletter he wrote “In summary, The Marketimer stock market model remains in positive territory as the second half of 2007 commences. We expect the S&P 500 Index to achieve new record highs, and we believe a strong case can be made for a move into S&P 500 Index 1600’s range as we move foreward… into 2008.” Mr. Brinker followed up on that statement on August 17, 2008 with this alert that he emails to his subscribers, “…the current S&P 500 Index level, is regarded as an additional buying opportunity for subscribers looking to add to stock market holdings.

Marketimer © expects the S&P 500 Index to register new historic record highs as we move forward into next year.”

After dropping to 1270 now Mr. Brinker is forecasting S&P 500 Index in the 1400’s range in the coming year. I have dropped my subscription.

To add to my dismay the GABELLI ASSET FUND (GABAX), one of his recommendations has tracked the fall of the S&P 500 Index and in fact has performed even worse. Mr. Gabelli’s income as the manager last year was over $9 million (as reported in the shareholder’s report).

Mr. Brinker offers no apologies!

Mr. Brinker did teach me something. Listen to everyone but trust no one. Do lots of homework before you make any investments.

It’s All About Subsidies

The question is should our government be giving subsidies to anyone or any group? This is a problem at all levels of government. It exists at the smallest local level up to the Federal government. Some examples are listed below.

My neighborhood beautification group (West Park Neighborhood) asked the neighborhood council for $300.00 to subsidize our block party. It was granted and we had 150 to 200 people in attendance. We did not earn enough money to repay the council. The council did not ask us to repay them.

The state of California was contemplating a subsidy to build a new football stadium in the Los Angeles area but this idea was blocked by county supervisors. The city of Industry had asked for power to divert $829 million in county property tax revenue from basic government services < http://www.latimes.com/news/local/la-me-indust17apr17,0,867083,full.story >. This was a wise action by the supervisors considering that the county lacks sufficient funds for those basic services.

The Federal government subsidies for ethanol amounted to $7.0 billion in 2006. There was and $18.0 billion subsidy for oil companies that that was created in 1986 and eliminated in 2008 (H.R. 5351: Renewable Energy and Energy Conservation Tax Act of 2008). $16 billion in subsidies were given to farmers every year between 2002 and 2005. Wind turbine investments are subsidized through the use of shortened depreciation schedules.

Think about it! No more subsidies from government for anything. Perhaps such policies would enable government to balance its budgets.

Lobbyists Are Everywhere

ABC’s 20/20 on its May 9, 2008 edition had a piece on the lack of information about auto tire aging। The gist of the piece was that tires over six years old should be discarded। Car manufacturers recommend this procedure but tires manufacturers were represnted by a spokesman who insisted that there is no evidence to support that idea. Even when confronted with the fact that the British tire manufacturers have established that standard he stood by his position.

Brian Ross, the ABC reporter, informed viewers that American tire manufacturers have prevented aging information from becoming public or passing laws to protect the public through the use of lobbyists. Consumer Reports web site advises that Strategic Safety LLC, a safety research firm, submitted comments to NHTSA in September 2003, saying it has identified 20 cases in which tires six or more years old failed, resulting in nine deaths. NHTSA says it is still working on a proposal but why? Are the lobbyists preventing new regulations? Apparently Brian Ross would say yes.

In most cases, a visual inspection or check of tread depth will not reveal the problem, the experts say.

The Ford Motor Company has urged the federal government to adopt a six-year expiration date, citing "comprehensive research" and "defendable data driven by analysis."

Ford, BMW, Chrysler, Toyota and VW/Audi now carry warnings about aged tires in manuals given to car owners. Even some tire companies have begun to issue warnings. Bridgestone/Firestone, Michelin and Continental now recommend that tires older than 10 years should not be used, even if they appear safe by visual inspection.
I will be checking my new Toyota tires in the morning. The 2001 Nissan has its original tires. I will be replacing all four tires.

No on California Propositions 98 and 99

Propositions 98 and 99 on the June 3, 2008 ballot will harm all Californians. The titles of these two proposals are totally misleading.

First both of these propositions will essentially end community redevelopment and will allow slums could go on existing indefinitely. These laws will allow slum owners to perpetuate the unacceptable living conditions for the poor. The CRA in Los Angeles has removed slums and replaced them with decent housing. These laws will effectively put the CRA out of business.

Proposition 98 is even worse because it would eliminate rent control for all California renters. Over one million Californians depend on rent control to survive, so abolishing it will have a tremendous impact. As scary as those numbers are, Prop. 98 would also jeopardize numerous laws that protect all 14 million California renters, including the fair return of rental deposits and laws protecting tenants from unfair and unjust evictions.

It’s no surprise then that more than 85% of funding to put Prop. 98 on the ballot came from wealthy landlords and organizations representing them. They only care about abolishing rent control and renter protections so they can make more money at the expense of seniors, veterans, single moms, students and working families.

Voters should vote a resounding ‘NO’ on Election Day on both Propositions 98 and 99.